Muthoot Finance clarifies that the Enforcement Directorate (ED) questioned its Managing Director regarding the Srei Group’s Non-Convertible Debentures (NCDs). Muthoot Securities Limited (MSTL), a subsidiary, acted as one of many brokers distributing these NCDs. The company asserts that it followed all regulations and that investors independently applied for the NCDs. Muthoot Finance denies any wrongdoing or misrepresentation, stating it has no affiliation with the Srei Group.
Clarification on ED Inquiry
Muthoot Finance addresses recent media reports regarding an Enforcement Directorate (ED) inquiry involving its Managing Director. The inquiry pertains to the Public Issue of Secured Non-Convertible Debentures (NCDs) by Srei Infrastructure Finance Limited and Srei Equipment Finance Ltd in 2018.
Role of Muthoot Securities Limited (MSTL)
Muthoot Securities Limited (MSTL), a SEBI-registered stock broking company with promoter family ties to Muthoot Finance, acted as one of several brokers for the Srei Cos’ NCD distribution. MSTL facilitated the application process for investors interested in these NCDs.
Investor Applications and Fund Handling
Investors independently applied for the NCDs through MSTL’s broking network, submitting applications directly to Srei Cos with payments made via account payee cheques. These cheques were drawn in favor of an escrow account managed by the Lead Managers, Registrar, NCD Issuing Company, and Collection Bank. Muthoot Finance states that it did not handle or route any funds related to these NCDs.
Srei Cos’ NCD Repayments and Insolvency
Srei Cos initially honored their obligations on the NCDs until December 30, 2020. Subsequently, the National Company Law Tribunal (NCLT) imposed a moratorium, and the Reserve Bank of India (RBI) superseded the Board of Directors. The National Asset Reconstruction Company Limited (NARCL) resolution plan, approved by NCLT, has initiated partial payments to NCD holders, with the most recent receipt on September 23, 2025.
Cooperation with Authorities
Muthoot Finance Limited confirms that its Managing Director was called upon by the Enforcement Directorate to provide factual information. The company maintains that it is fully cooperating with the authorities.
Denial of Misleading Claims
Muthoot Finance denies allegations of money laundering, investor fraud, and misrepresentation of Srei Cos as a sister concern. The company affirms that investors signed applications containing all relevant details and that funds were directed to specified escrow accounts.
No Association with Srei Cos
Muthoot Finance Limited and its Board of Directors assert they have no association, affiliation, or commercial relationship with Srei Cos.
Source: BSE
