Manappuram Finance

Hi Guys,
Let me explain you the entire case and then analyst meet notes and then my take

1. Magro used to accept deposits from public and as on 1st of February 2012 they had outstanding deposits of 144cr. Please note Magro is a proprietorship Firm and in a proprietorship the liability is unlimited.

2. RBI said that they cannot accept deposit and it has to be returned. Mangro returned all the money ( As per proprietor). Now I have a question here that wouldn’t RBI do their independent review weather the money has been returned or not?

3. Magro used those depositors money to purchase agri land, that is the business ( ED has said that they used that depositors money to buy immovable property)

I have a question here can a SOLE proprietor use money form his firm for personal use?? I have seen small proprietor buying monthly grocery from their account.

4. . In March 2012 VP raised an amount of INR 159,45,62,582 through sale of shares. So the total deposit was 144cr and 10% was the interest and he transferred all this money to an an escrow account with Punjab National Bank
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5. Now close to 50cr of deposits were returned through cash this is because these depositors had deposits less than 20000 hence Magro returned them via cash and this cash was withdrawn from the escrow account and paid to them. Mr Nandakumar is saying that they have the name, address, door number of all these people to whom money was returned by cash.

So they are saying that all these deposits were accepted prior to 2010 and since it was an proprietorship firm they used to comply with the INCOME TAX department and hence they dont have proper KYC detail of all of them but they have all other details as I mentioned above.

6. Rest all the money have been returned via cheques close to 100cr as they were above 20000 and as on date they have close to 9 lakh pending.

7. To enable the repayment of all deposits, permission was sought from RBI for the Company to allow Magro to maintain a small presence at the manappuram branches for 90 days from February 10, 2012 for the sole purpose of repaying the deposits

8. They are saying that the person who did FIR in 2012 has again done the FIR for the same matter after 10years and he has a long-standing grouse against VP family and VP.

9. All those Land which they purchased for the depositors money are still there but in the name of some other company.

10. Manappuram is in the business of lending and they said that their customers are at the bottom of the prymad so they are least interested in these cases the only thing which matters to them is money and services so the entire case is not related to manappuram and their business will not be effected. Trust factor

11. RBI has sought clarification form them which is routine checkup as per them and they have proactively communicated with their lenders and stakeholders. As per them Manappuram borrowing ability should not be effected.

12. All the returning of money was regularly shared with RBI of repayment and they have acknowledgement of depositors of money being received ( I think this is for that 100cr via cheque only)

13. Manappuram never had any related party transaction with Magro.

14. On monday they are going to approach high court and they are very confident that they will be able to put a stay order on it and their assets will be unfreezed. Please note that their Assets have been freezed and not seized.

So if this is money laundering like I am just estimating that the total depositors should be more than 25000 thousand ( 50cr/20000) so I just want to ask does this look like money laundering. Taking all your black money giving to more than 25000 people they then depositing after that you selling your shares and returning money. Looks too much. Might be wrong

My intuition is promoter is not 100% clean but the quantum mentioned here of 143cr is absolutely rubbish. My take might be wrong

If they post good Q4 numbers then anyway things will come back to normalcy. The only concern here is the money they have returned by cash which is 50cr. It is a 10yrs old case and the FIR has been done by the same person so looks like judgement should be in their favour but at the end of the day weather they win or loose on a NET NET basis they are on the loosing side.

Disclosure: I have excited 50% of my Qty with 6% loss. When ever there is a legal battle it always is a drag hance not comfortable holding entire Qty. Might be wrong