A FINANCIAL EMPIRE UNDER SCRUTINY

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In a painstaking investigation based on the examination of statutory filings and public disclosures, Cobrapost exposes a worrying pattern of large-value cash transactions, questionable related party arrangements, shocking statutory disclosure and compliance gaps involving Cholamandalam Investment & Finance Company Ltd, one of India’s largest listed non-banking financial companies. For close to a decade, more than Rs. 10,000 crore has moved through a web of related parties involving the flagship of the 125-year-old Murugappa Group and other entities. Additionally, cash deposits of around Rs. 25,000 crore were made across more than a dozen banks over the past six years. The scale of these transactions raises fundamental questions about corporate governance, transparency, and gaps in regulatory oversight in entities that handle vast sums of public, institutional, and borrowed capital. For shareholders, lenders, regulators, and the public at large, the issues examined in this investigation go to the heart of how related party relationships were structured and remained largely undisclosed and unscrutinised casting a serious shadow over the integrity of India’s financial system.

COBRAPOST INVESTIGATION LOOTWALLAHS: QUESTIONS ABOUT CORPORATE GOVERNANCE IN INDIA Part – II

New Delhi (Tuesday: December 23, 2025): A Cobrapost investigation, based on a detailed examination of statutory filings and corporate and financial disclosures, has identified transactions aggregating approximately Rs. 10,262 crore involving Cholamandalam Investment & Finance Company Ltd. and a network of related parties, including Murugappa Group entities, family members, and key management personnel. Our investigation further indicates that portions of these funds were routed onward through additional transactions, the nature and purpose of which merit closer regulatory scrutiny.

The investigation also notes that the flagship company of the 125-year-old Murugappa Group reported cash deposits totalling around Rs. 25,089 crore across more than a dozen banks over the past six years. The figures cited are approximations derived from disclosed records and may vary if officially examined by a competent statutory authority vested with full investigatory powers.

Still in aggregate, the scale and structure of these transactions raise significant questions regarding related party disclosures, corporate governance practices, and the sourcing and deployment of funds in a listed financial institution handling large volumes of public and institutional capital. These transactions raise serious questions under the Companies Act, 2013, the Bharatiya Nyaya Sanhita (BNS), and SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations, particularly with respect to related-party arrangements, corporate governance, and end-use of funds.

While publishing this story, Cobrapost has anonymised and redacted the sensitive data in keeping with privacy and commercial confidentiality considerations, especially of those third parties.

The principal recipient entities identified in this analysis include Chola Business Services Ltd. (CBSL) and Murugappa Management Services. CBSL is a privately held company owned and controlled by promoters of the Murugappa Group. Our  analysis indicates that transactions aggregating approximately Rs. 4103 crore were undertaken by Cholamandalam Investment & Finance Company Ltd. (CIFCL) with Chola Business Services Ltd. (CBSL), while transactions amounting to around Rs. 3040 crore were undertaken by Cholamandalam MS General Insurance Company Limited (CMGICL) which were essentially related party transactions (RPTs).

The analysis further shows that transactions totalling approximately Rs. 675 crore were recorded across 17 Murugappa Group companies—both listed and unlisted—and routed to Murugappa Management Services, based on a review of filings and disclosures. Of this amount, Rs. 103.77 crore originated from CIFCL. The examination of subsequent transactions indicates that portions of these amounts were transferred onward to Murugappa Group family members and senior management personnel through CBSL and Murugappa Management Services.

Taken together, the RPTs identified in this analysis aggregate to approximately Rs. 10,134.76 crore.

In addition to group entities including related parties, the analysis identifies rating agencies, auditing firms, non-profit organisations such as Isha Foundation, sports bodies, and trade associations among the recipients of funds paid by CIFCL and other Murugappa Group companies. Based on filings and related records reviewed by Cobrapost, these entities together received approximately Rs. 127.98 crore during the period under examination.

The transactions examined in this report aggregate to around Rs. 10,262 crore across CIFCL and CMGICL. However, disclosures amounting to only about Rs. 2161 crore appear to have been made by the companies involved as RPTs, based on available records.

Our review further indicates that CBSL made payments to certain individuals following its receipt of these funds. One such recipient identified in the records is Venkatachalam A, a member of the promoter group, who was paid salary totalling approximately Rs. 16.50 crore by CBSL between 2023 and 2025. In addition, transactions reviewed by us show that Venkatachalam A received compensation amounting to about Rs. 18.60 crore from Murugappa Management Services during the same broader period, as detailed later in this report.

Murugappa Management Services, a privately held company within the Murugappa Group, is identified in the filings reviewed by Cobrapost as a recipient of transactions aggregating approximately Rs. 675 crore from 17 Murugappa Group companies. The analysis further indicates that, following receipt of these amounts, Murugappa Management Services made payments to various individuals, including members of the Murugappa family and key management personnel (KMP).

Based on records examined by us, payments made by Murugappa Management Services to family members and senior executives together amount to approximately Rs. 353 crore over the period under review. One of the recipients identified in the filings is Ravichandran Venkatachalam (Ravichandran V), a member of the Murugappa family and head of Coromandel International Ltd., who received payments exceeding Rs. 55 crore.

The review also identifies multiple other family members who received payments running into several crores of rupees, recorded as salary, professional fees, or a combination of both. Among senior management personnel, Ramesh K.B. Menon, the Group’s human resources head, is reflected as having received payments totalling approximately Rs. 54 crore between FY 2017–18 and FY 2021–22.

Examination of available records indicates that these payments do not appear to have been reported as RPTs in the filings reviewed, an issue discussed in greater detail later in the story.

Analysis of the companies’ financial statements reviewed by Cobrapost indicates that a number of these transactions were recorded under heads such as commission, professional fees, and work contracts. The manner in which these payments have been classified and disclosed raises questions regarding their commercial rationale, related-party disclosure, and accounting treatment.

The main findings, based on statutory filings and related disclosures, can be summed up as follows:

• CIFCL has made cash deposits of around Rs. 25,089 crore across 14 banks varying between 2019-20 and 2024-25. These figures are approximations derived from accessed data and may vary upon examination by a competent authority.    

• The NBFC also operates in insurance and has reportedly earned a commission of Rs. 942 crore between 2024 and 2025. Its revenue from commission earned has increased by leaps and bounds. Since a substantial part of CIFCL’s revenues come from financing vehicles and homes, the question arises whether the company is indulging in bundling insurance with vehicle loans, a practice prohibited by regulatory agencies like IRDAI.        
• One of the many insurance companies CIFCL works for is Cholamandalam MS General Insurance, a related company. CMGICL has diverted funds worth Rs. 3040 crore to nine Murugappa Group companies.

1. An examination of CMGICL’s disclosures shows that these transactions were recorded under heads such as insurance commission, work contracts, and professional fees. The structure, classification, and disclosure of these transactions form a central part of the governance and compliance issues analysed in this report.
2. Based on the records examined, transactions aggregating approximately Rs. 1,578 crore were reported with several Murugappa Group entities, including around Rs. 1,036 crore recorded as professional fees paid to nine related companies.
3. The concentration and disclosure of these transactions raise questions regarding their impact on stakeholders, including minority shareholders and joint venture partners, an issue discussed in detail later in this report.
4. Filings reviewed by Cobrapost indicate that CMGICL disclosed related-party transactions amounting to approximately Rs. 116 crore, while additional transactions identified in this analysis do not appear to have been reflected as RPT disclosures in the filings examined.
5. Cobrapost’s review of CIFCL’s available disclosures similarly indicates that several transactions identified in this analysis do not appear to have been reported as related-party transactions (RPTs), an issue examined in subsequent sections of this investigation.

• Filings reviewed indicate that CIFCL reported payments aggregating more than Rs. 1,654 crore in the form of work contracts with over a dozen Murugappa Group entities. Based on the disclosures examined, these transactions do not appear to have been reflected as RPTs in the company’s filings for the relevant periods.

            The recipient entities identified in the records include:

• EID Parry India Ltd.
• Parry Enterprises India Ltd.
• Murugappa Management Services Pvt. Ltd.
• Coromandel Engineering Co. Ltd.
• Cholamandalam Distribution Services
• Cholamandalam Home Finance Ltd.
• Cholamandalam Securities Ltd.
• Cholamandalam MS Risk Services Ltd.
• Cholamandalam MS General Insurance Company Limited
• Net Access India Ltd.
• Chola Business Services Ltd.

• Chola Business Services Ltd. (CBSL), a privately held Murugappa Group entity, is reflected as the principal recipient of work-contract payments recorded by CIFCL. Of the work-contract transactions aggregating approximately Rs. 1,654 crore identified in this analysis, payments amounting to about Rs. 1,628.36 crore were recorded in favour of CBSL.
• The review further indicates that CIFCL recorded professional-fee payments totalling approximately Rs. 642.95 crore to five Murugappa Group companies. In addition, filings examined by Cobrapost reflect payments aggregating about Rs. 19.70 crore to 12 senior Murugappa family members, recorded as professional fees and salary. Taken together, these payments amount to approximately Rs. 662.65 crore, as per the records reviewed.
• CBSL recorded payments aggregating approximately Rs. 4,103 crore from CIFCL over multiple years. These payments are reflected in the records as consideration for staffing and related services, including transactions dating back to periods prior to FY 2015.Following receipt of these amounts, CBSL recorded payments to other entities and individuals through subsequent transactions, as detailed later in this report.

• CBSL claimed additional deductions aggregating approximately Rs. 180 crore under Section 80JJAA of the Income Tax Act in connection with staffing deployed at CIFCL.
• CIFCL has reported related-party transactions amounting to approximately Rs. 2,045 crore in its filings for the relevant periods.
• The records reviewed further reflect payments made by CBSL to certain entities and individuals, including Mysore Club, Murugappa Management Services Pvt. Ltd., and Venkatachalam A, following the receipt of funds from CIFCL.
• Venkatachalam A received salary payments totalling approximately Rs. 16.50 crore between FY 2023–24 and FY 2024–25..

• Murugappa Management Services Pvt. Ltd., a promoter-controlled Murugappa Group company, received transactions aggregating approximately Rs. 675 crore from 17 group companies over the period FY 2017–18 to FY 2024–25. Of this amount, approximately Rs. 103.77 crore originated from CIFCL, based on the records examined.

            The review further indicates that, following receipt of these amounts, Murugappa             Management Services recorded payments to various entities and individuals             through subsequent transactions, the details of which are examined in the sections             that follow:

• Murugappa Management Services paid an estimated Rs. 365 crore to dozens of individuals, a slew of entities including related companies, rating agencies, insurance companies, sports bodies like BCCI, among others.
• Out of the Rs. 365 crore, the Murugappa family members and their close associates have together received Rs. 353.04 crore. The top beneficiaries, among a dozen prominent family members, who have benefitted out of these diversions, are:
  • Ravichandran V, who received more than Rs. 55 crore.
  • MM Venkatachalam, who received more than Rs. 44 crore.   
  • MM Murugappan, who received about Rs. 42.53 crore.
  • Murugappa Vellayan Subbiah, who received Rs. 34.84 crore.
  • Murugappan Arunachalam Alagappan, who received Rs. 35.47 crore.

• Ramesh KB Menon and Srinivasan N, two of the eight Murugappa Group top management officials identified, have also received Rs. 54 crore and Rs. 21 crore, respectively.
• In addition, Muruguppa Management Services has paid sums worth Rs. 5.70 crore to four of the dozens of Muruguppa Group companies, including Ambadi Investments Ltd., the Murugappa family’s holding company.
• There doesn’t seem to have been required regulatory compliance with regard to these RPTs.

• Except partial disclosures by CMGICL and CIFCL, there has been no adequate disclosure with regard to all the RPTs examined by Cobrapost. Companies have to comply with RPT disclosure requirements mandated by the  Companies Act 2013, SEBI’s LODR Regulations, and the Indian Accounting Standards.

• CIFCL has paid four credit rating agencies and five auditing firms more than Rs. 103 crore in professional fee which varies wildly and is arguably quite excessive. There is some element of conflict of interest in these transactions.
• CIFCL has paid Rs. 20.94 crore to 21 non-profit trade bodies and religious organizations in what was part of diverted funds. Isha Foundation and Isha Leadership Academy, for instance, have together received around Rs. 1.99 crore from CIFCL. Curiously, these payments have been made in work contracts. Though these payments look like donations in nature, the company has shown them as expenses to perhaps circumvent CSR guidelines.
• Cobrapost has sample catalogued 38 borrower entities which have paid CIFCL an upward of Rs. 80 crores in interest against the loans. However, only a few of them have filed charge registers declaring their outstanding debts which makes the NBFC’s lending practices questionable.   

In compliance with best journalistic practices, Cobrapost has sent questionnaires to relevant companies and individuals, and we received the following response from the Chola Secretariat which is reproduced verbatim as follows:

We are in receipt of your email dated 22nd December 2025 (claiming to publish report/have press conference within 24 hours) sent to multiple email ids of the employees/companies in the Group seeking several information/clarifications on the individual employees/ business operations of the entities that are duly audited and submitted with the relevant regulatory bodies.

We confirm that all transactions of the businesses are carried out as per the laws of land in due compliance with the applicable regulatory guidelines. The individuals/businesses will respond to appropriate authorities whenever required.

 

Any further emails/publication/press meet on the above with an inherent criminal intention to blackmail or tarnish the image of our businesses/group/family members, will face the full force of the law at your own costs and consequences.

Authorised signatory

The above email had no signatures of the authorised signatory or his/her name. The response carries no answers to any of our multiple questions regarding the findings of our investigation. Cobrapost denies that any criminal intention to blackmail or tarnish the image of the Murugappa Group or their family members. Cobrapost also denounces this blatant attempt to intimidate journalists and media.

Before we analyze and discuss in detail how the funds were primarily moved between CIFCL and other entities, it will be in order to explain the corporate structure of the Murugappa Group.

Background of the Murugappa Group: The Murugappa Group’s origin traces back to 1900, the year when its founder Dewan Bahdur AM Murugappa Chettiar made his foray into money lending business in the then Burma, now Myanmar. Over a period of 125 years, the group has grown by leaps and bounds to graduate into a conglomerate of 29 business entities – 10 among them are listed – and numerous subsidiaries, spread across sectors as diverse as finance, engineering, manufacturing, agriculture, and insurance, among others. In fact, there are more than 100 companies/subsidiaries both inland and offshore in the umbrella group. The BSA and Hercules bicycles manufactured by TI Cycles, which was set up in 1949 in collaboration with Tube Investments of UK, are considered marquee brands of the group so is Parry in sugar. The net worth of the group was estimated at US$ 9.8 billion in 2024, according to the Forbes magazine.  

After the death of the family patriarch, the baton passed on to two of his sons – AMM Murugappa Chettiar and AMM Arunachalam – as his middle son AMM Vellayan Chettiar died four years before in 1945. As gleaned from the family tree available in public domain and reproduced here, among the third generation who together drove the legacy further were MM Muthuiah, the only son of AMM Murugappa Chettiar; MV Aurnachalam, MV Murugappan, MV Subbiah, the three sons of AMM Vellayan Chettiar; and MA Murugappan and MA Alagappan, the two sons of AMM Arunachalam. The fourth generation consists of MM Murugappan, who is at the top of the Murugappa family hierarchy and chairman of the group, and his sibling MM Venkatachalam, his cousins A Vellayan and A Venkatachalam, both sons of MV Arunachalam; S Vallayan, son of MV Subbiah; Arun Murugappan, son of MA Murugappan; and finally, Arun Alagappan, son of the third-generation member of the Murugappa family, MA Alagappan. A Vellayan, chairman emeritus of Coromandel International and former chairman of the Murugappa Group, died on November 17, 2025.   

These details, where the fifth generation has been left out, are necessary to understand how and who among all these family members run which Murugappa Group companies, as some of them have been involved in the transactions that Cobrapost is going to unravel in the story here. One of the most interesting facts that has emerged from our analysis is that the rise in the Murugappa Group’s  fortune coincided with the rise of Cholamandalam Investment & Finance Company Ltd. as the main pivot driving the growth of the group. CIFCL has, in fact, seen an unprecedented growth in the recent decade.

Although the Murugappa Group operates through a large number of companies and subsidiaries, Cobrapost’s review of statutory filings and disclosures has identified the following 14 companies—apart from Cholamandalam Investment & Finance Co. Ltd., Chola Business Services Ltd., and Murugappa Management Services Pvt. Ltd.—that feature in the transactions examined in this report and form part of the broader web of transaction flows analysed below:

• Coromandel International Limited,
• CG Power & Industrial Solutions Ltd.,
• EID Parry India,
• Tube Investments of India Ltd.,
• Cholamandalam Ms General Insurance Company Limited,
• Carborundum Universal,
• Cholamandalam Financial Holdings Ltd.,
• Ambadi Enterprises Ltd.,
• New Ambadi Estates Pvt. Ltd.
• Parry Enterprises India Limited,
• Parry Agro Industries Ltd.
• Shanthi Gears Ltd.
• Southern Energy Development
• Chola Insurance Distribution
• Ambadi Investments Ltd.

Set up by the Murugappa family in 1972, Cholamandalam Investment & Finance Co. Ltd. (CIFCL) is the flagship of the Murugappa Group, initially headed by AMM Arunachalam. Vellayan Subbiah, alias Vellayan S or aka S Vellayan, the fourth-gen member of the Murugappas clan, heads the non-banking finance company (NBFC) as chairman and non-executive director. Ravindra Kumar Kundu is its Managing Director.

The lending arm of the group is in the business of financing vehicles, homes, home equity, and SME; providing investment advisory services, a variety of other financial services, and stock broking. As of June 2025, 49.90 per cent of the total CIFCL stake is held by Murugappa family members who are promoters of the company, while foreign institutional investors (FIIs), domestic institutional investors (DIIs), and retail investors hold, respectively, 27.96 percent, 16.05 percent, and 6.07 percent stake.

A detailed breakdown of CIFCL’s shareholding pattern since 2020 is as follows: 

     Source: https://www.screener.in/company/CHOLAFIN/#shareholding Annexure 1.

The details of the promoters’ shareholding are provided here:

Here’s the data formatted into a clear table:

However, the entire business line of CIFCL sustains on monies borrowed from banks, financial institutions, and general public. According to the information available in public domain, the total outstanding loan – euphemistically called assets under management (AUM) – is anything between Rs. 1,99,867 crore and Rs. 2,07,875 crore. To be precise, CIFCL’s outstanding liabilities stood at Rs. 2,01,647 crore as on March 31, 2025. As the table below shows, the borrowings by CIFCL have in the recent years risen exponentially. From Rs. 50,567 crore in 2019, the borrowings have increased more than threefold to Rs. 1,74,946 crore.  

According to the annual report filed by CIFCL for the 2024–25 fiscal year, its liabilities include Rs. 1,74,946 crore in borrowings and Rs. 3074 crore in other liabilities, an amount so enormous that it cannot be wished away by any yardstick when we consider its worth. The net worth of CIFCL is estimated at Rs. 8171.84 crore, way below its total exposure in terms of outstanding liabilities. Even if measured on the basis of the current market capitalization, it’s worth estimated at around Rs. 1,24,000 crore falls short of its liabilities by a mile.

A detailed account of the liabilities and assets for the past six years is provided in the table here:

Here’s the data formatted into a clean, structured table (Amount in ₹ crore):

Note: Refer Page 44–45 of Annual Report 2024–25 attached as Annexure 2.

Of these outstanding liabilities, borrowings comprise approximately Rs. 30,134 crore in debentures, Rs. 76,466 crore in bank term loans, Rs. 12,349 crore in external commercial borrowings, and Rs. 44,976 crore in rupee term loans from financial institutions. These figures are based on disclosures reviewed by Cobrapost.

Our analysis of related filings and transaction records further examines transactions aggregating approximately Rs. 10,262 crore involving various entities and individuals, including Murugappa family members and KMP. The structure, disclosure, and commercial rationale of these transactions form a central part of the issues analysed in this report, particularly in the context of the stated purposes of the underlying borrowings.

We have identified the following serious issues:

• • Massive cash deposits made in 14 banks.
  • Diversion of funds to promoters’ entities.
  • Huge related party transactions by CIFCL over a decade.
  • Non-disclosure of all RPTs in violation of the disclosure requirements mandated under the Companies Act of 2013, SEBI’s LODR Regulations, and the Indian Accounting Standards.    
  • Transfer of funds to related entities by CMGICL at the expense of its Japanese joint venture partner.
  • Huge of payouts to individuals and entities, including charities, in the name of professional fee, commission/brokerage, and work contracts.
  • Questionable practices in disbursal of loans where borrower entities have not filed charge register.       

 

One aspect that warrants closer examination is the scale of cash deposits reported by CIFCL across 14 banks. The volume and frequency of these cash transactions are significant and raise questions regarding monitoring, reporting, and oversight mechanisms applicable to such transactions within the banking system.

Here is a detailed analysis of what we found. 

I. Unexplained Massive Cash Deposits with Over a dozen Banks

Analysis of statutory filings and other documents reveals that CIFCL has made cash deposits with over a dozen banks in the past seven years or so on a scale which is enormous. It has deposited around Rs. 25,089 crore in 14 banks between 2019 and 2025. Of these banks, eight are private entities and six are public sector banks. The names of the banks involved are here:

Here’s the information formatted into a clear, side-by-side table:

While Cobrapost has reviewed relevant statutory filings and other documents to collate and analyze the data, there may be mismatch between different filings. The reasons could be software glitches, human error and unknown variables. Though the data produced here are approximations, they can vary significantly on the upper side if an audit is conducted by competent authorities.  

As the table given next illustrates, ICICI Bank Ltd tops the list of all the recipients of cash deposits. Around Rs. 13,360 crore were deposited in a period of seven years. State Bank India follows with deposits of Rs. 4607.45 crore. Punjab National Bank, another public sector bank, is the fourth highest recipient of cash deposits with an upward of Rs. 561 crore. IndusInd Bank, another private bank which is owned by the Hinduja Group, has also received around Rs. 256 crore in cash deposits in a period of two years between 2019–2020. A small finance company like Fino Fintech has received more than Rs. 1329 crore in cash deposits that too in a single year.

Relevant statutory filings have been reviewed by Cobrapost and this table represents the conclusions derived thereof. Cobrapost has taken due care to anonymize and redact the data thus previewed because of privacy concerns. The data provided are approximations and may vary significantly.   

The scale and pattern of cash deposits reported by a non-banking finance company such as CIFCL raise important questions regarding the operation of regulatory monitoring and reporting frameworks applicable to such transactions.

Under the Prevention of Money Laundering Act (PMLA) and related rules, banks are required to file Suspicious Transaction Reports (STRs) with the Financial Intelligence Unit–India (FIU-IND) in respect of transactions that meet prescribed thresholds or indicators. FIU-IND, established following the enactment of the PMLA in 2002, functions as the central agency for receiving, processing, and analysing such reports. The manner in which large-value cash transactions of the kind examined in this report are monitored, reported, and reviewed by banks and regulators—including the Reserve Bank of India (RBI) as the banking sector’s statutory regulator—forms a key area of regulatory oversight that merits closer examination.

We have accessed the annual statements of Axis Bank and IndusInd Bank as case studies to analyze in what manner the cash deposits were made. Interestingly, cash transactions/deposits made with these banks differ from what CIFCL’s book would have one believe. The details of cash deposits in the past seven financial years are provided in the next two successive tables.

A. Cash Deposits Made by CIFCL with Axis Bank

As the table here shows, cash deposits were made in the CIFCL account with Axis Bank using three modes: cash management services (CMS), cash deposits by individuals, and cash deposits directly with the branch of the bank. These deposits were made through hundreds of transactions with CMS registering highest number of entries.

Here’s the data formatted into a clean, structured table with amounts in ₹ crore:

 Note: These figures are base on the review of statements. The number presented here is for the period starting FY 2019 to FY 2025 and differs from the value mentioned in the table before which is for the period FY 2022 to FY 2025.

The cash deposits made by CIFCL through CMS in its account saw steady volumes for two consecutive years – Rs. 929.04 crore in 2019–20 and Rs. 702.53 crore in 2020–21. Then, they gradually reduced but not diminished. Similarly, cash deposits received by bank branches saw steady volumes for three consecutive years – Rs. 1539.11 crore in 2019–20, Rs. 1421.97 crore in 2020–21, and Rs. 788.83 crore in 2021–22. Though cash deposits made by individuals was not substantial, it saw a steady increase except in 2024–25. The total cash deposits CIFCL made with Axis Bank stood at Rs. 7297.14 crore for FY 2019-20 to 2024–25.

B. Cash Deposits Made by CIFCL with IndusInd Bank

Here’s the data formatted into a clear, structured table (Amount in ₹ crore):

For making cash deposits with IndusInd Bank, however, CIFCL used only CMS as the table illustrates, totalling Rs. 200.72 crore between 2019–20 and 2024–25.

The pattern of cash deposits examined in this report has following implications for how credit risk and loan servicing practices are assessed within the lending framework applicable to non-banking finance companies (NBFCs):

• Questionable Credit Quality of Customers: As it is evident from the tables above, a large portion of loan servicing by customers is in the form of cash, which is deposited to the bank account of CIFCL. It is a standard practice that the debt servicing is conducted by all banking and lending institutions through structured equated monthly installments (EMIs) debited straightaway from a borrower’s account. An Electronic Clearing System (ECS) mandate is obtained from the borrower before a loan agreement is executed and the loan is disbursed. The borrower is informed of the duration of the loan, his monthly liability and due date of EMIs through ECS, again a standard procedure. Then there are digital forms of payment as well.

It is only when a customer defaults on the payment of EMIs through this procedure or fails digital servicing, the lenders seek remittances against defaulted payments/EMIs in cash through their staff members or collection agents. Cash receipts are provided to the borrower then and there.

The cash deposits made in this manner also bring into question the credit risk they involve.

Cash collection is never envisaged by financial/lending institutions when they assess the credit risk. The current instance of large cash collection and deposits to bank accounts only gives an impression that quality of borrowers is poor. They are not regular in discharging their liabilities by not servicing the loan properly and regularly.

 

• Non-compliance of Income Tax Law and KYC Obligations: Section 269T of the Income Tax Act, 1961 makes it mandatory for each entity to disclose in their tax audit report the identity of each person and PAN details if receipts in excess of Rs. 20,000 in cash are made by the person in any financial year. While making cash deposits worth thousands of crores of rupees with several banks, CIFCL has failed in this mandatory compliance.

According to sources, the company has not filed the identity of a large number of customers while making cash deposits. This is seemingly in contravention of the Income Tax Act and RBI guidelines, too, which put the onus of strict KYC compliance on an NBFC for individuals making deposits on its behalf, including authorized agents and brokers. The objective of the guidelines issued vide RBI Master Circular dated July 1, 2010 is to prevent money laundering activities by NBFCs (Master Circular ‘Know Your Customer’ (KYC) Guidelines – Anti Money Laundering Standards (AML) -‘Prevention of Money Laundering Act, 2002 – Obligations of NBFCs in terms of Rules notified thereunder’ enclosed as Annexure 3). Rule 3 of the guidelines states in unambiguous terms:

As regards deposits collected by persons authorised by NBFCs including brokers/agents etc. inasmuch as such persons are collecting the deposits on behalf of the NBFC, it shall be the sole responsibility of the NBFC to ensure full compliance with the KYC guidelines by such persons. The NBFC should make available all information to the Bank to verify the compliance with the KYC guidelines and accept full consequences of any violation by the persons authorised by NBFCs including brokers/agents etc. who are operating on its behalf.

 

Given the scale of cash deposits and the information available in public disclosures regarding the source and aggregation of remittances, the transaction patterns identified in this report raise questions that may warrant scrutiny within the regulatory framework of the PMLA. Such patterns are typically examined by enforcement and supervisory authorities like Enforcement Directorate under applicable PMLA provisions, including those relating to the identification, reporting, and scrutiny of high-value cash transactions.

• Concealment of Actual Non-performing Assets: As mentioned above, when the borrowers who have missed their payment obligations through regular banking channels using standard procedures, the lenders receive cash collections from them. This time lag may breach the prudential norms window of non-performing asset provisioning requirement. It is apparent that substantial of CIFCL’s turnover over the last 5 years is in the form of cash. This, therefore, leads us to believe that GNPA disclosed by CIFCL may be an understatement hiding the true picture. 
• Credit Rating Agency and Conflict of Interest: A credit rating of AA+ that Crisil Ratings Limited assigned to CIFCL may have taken into account the excellent asset quality of CIFCL. However, the rating agency may not have factored in the large cash collections which carry certain inherent risks and delinquencies.

As is mentioned elsewhere in the story, the independence of rating agencies is questionable as there are conflict of interest issues.

Cobrapost’s review of audit reports and financial disclosures raises questions regarding the treatment and disclosure of certain revenue streams, including cash-based collections reflected in the segmental information examined in this report.

The analysis also notes that CIFCL made substantial payments towards audit and professional services to statutory auditors and, in certain instances, to related or affiliated entities of those audit firms. The scale and variation of these payments, when viewed alongside the auditors’ independence obligations under applicable auditing standards and professional codes, highlight potential issues of independence and conflict of interest that merit closer examination.

These aspects—relating to audit scope, disclosure, and fee structures—are examined in greater detail later in this report, with reference to applicable accounting standards, regulatory guidelines, and publicly available records.

 

II. How Murugappa Group’s Insurance Arm Funded Nine In-House Companies

Apart from financing homes, vehicles, and small businesses, among others, Cholamandalam Investment & Finance Co. Ltd. is also engaged in the distribution of insurance products. Although the Insurance Regulatory and Development Authority of India (IRDAI) regulates a finance company from operating as an insurer simultaneously, a company can sell insurance products as a corporate agent of any licensed insurance operator. CIFCL is registered as a corporate agent (Registration No. CA0874) with IRDAI authorized to act as a life/non-life (composite) agent (see the IRDAI List of Corporate Agents enclosed as Annexure 4).

Our analysis shows that Cholamandalam MS General Insurance Company Limited, the insurance arm of the Murugappa Group, recorded payments amounting to approximately Rs. 331.53 crore as commission to Cholamandalam Investment & Finance Company Ltd. (CIFCL) between FY 2024 and FY 2025. Based on the disclosures examined, these payments do not appear to have duly reflected as related-party transactions in the filings reviewed.

We further identified transactions aggregating approximately Rs. 3040 crore reported by CMGICL with nine Murugappa Group entities during the period under review, the structure and disclosure of which form a central part of the issues flagged in this report.

While analyzing hundreds of transactions that CIFCL has conducted over a decade or so, Cobrapost came across receipts of an upward of Rs. 942 crore the finance company has earned in commission by selling insurance between 2024 and 2025. The star performer of the 125-year-old Murugappa Group must have sold thousands of policies and insurance products to earn Rs. 287.56 crore in 2024 in commission, which more than doubled to Rs. 654.52 crore a year later. Curiously enough, one of the three insurance companies CIFCL works for as a corporate agent is from the Murugappa Group’s own stable, CMGICL. As illustrated in the table here, of Rs. 942 crore CIFCL received in commission from all three insurers in the past two years, Rs. 331.53 crore came from CMGICL.

Here’s the data formatted into a clean, structured table (Commission Received in ₹ crore):

The commissions which CMGICL paid CIFCL are legally speaking RPTs. But CMGICL failed to make full disclosures of all RPTs it entered with not only with CIFCL but also other Murugappa Group entities.

The insurer appears to have disclosed approximately half of the related-party transactions identified in this analysis. The extent and completeness of these disclosures raise questions when assessed against the disclosure requirements prescribed under the Companies Act, 2013, the Indian Accounting Standards, and SEBI’s Listing Obligations and Disclosure Requirements (LODR) Regulations.

Interestingly, CIFCL has its own policy on RPTs which was formulated in April 2022 in line with the LODR Regulations. The policy aims to put in place a structured oversight mechanism for identification/monitoring, approval, and disclosure of RPTs (CIFCL’s Policy on Related Party Transactions enclosed as Annexure 5, available online at https://share.google/QQKPFqpRM9e2y8bYR).

It is important to mention here the three significant clauses of the policy. Clause 7 of the policy outlines the guidelines for determining the arm’s length basis of transactions. These guidelines involve determining, to quote the clause, whether the terms of the transaction are fair and would apply on the same basis if the transaction did not involve a Related Party; whether there are any compelling business reasons to enter into the transaction and the nature of alternative transactions, if any; where the transaction would affect the independence of an Independent Director; whether the transaction poses any consequential potential reputational risk issues; whether the transaction would present an improper conflict of interest for any Director or KMP, taking into account the size of the transaction, the overall financial position of the Director/KMP or other Related Party, the direct or indirect nature of the Directors, ‘KMPs’ or other Related Party’s interest in the transaction and the ongoing nature of any proposed relationship.”

Clause 9 lays down the review procedure when an unapproved RPT has taken place. To quote the clause:

In the event the Company becomes aware of a Related Party Transaction with a Related Party that has not been approved under this Policy prior to its consummation, the matter shall be reviewed by the Audit Committee. The Audit Committee shall consider all the relevant facts and circumstances pertaining to the failure of reporting such Related Party Transaction to the Audit Committee under this Policy, and shall take any such action it deems appropriate.

In any case, where the Audit Committee determines not to ratify a Related Party Transaction that has been commenced without its approval, the Audit Committee, as appropriate, may direct additional actions including, but not limited to, immediate discontinuation or rescission of the transaction. In connection with any review of a Related Party Transaction, the Audit Committee has authority to modify or waive any procedural requirements of this Policy.

In cases where the Board and/or shareholders’ approval is required for a Related Party Transaction but such approval has not be obtained, and if it is not ratified by the Board or, as the case may be, by the shareholders at a meeting within three months from the date on which such Related Party Transaction was entered into, such Related Party Transaction shall be voidable at the option of the Board or, as the case may be, of the shareholders.                         

 

Clause 10 is about the need of making mandatory disclosures about RPTs. “The company shall make necessary disclosures as per the requirements under the Companies Act, SEBI  LODR Regulations and Indian Accounting Standards, as the case may be within the prescribed timelines.”

In spite of these policy formulations, the company has been spectacular in its lackadaisical performance in following up its own policy. Other companies exposed in this story too have failed to make proper RPT disclosures. The only exceptions are CBSL and CMGICL but they too have made part disclosures. 

For a detailed analysis on how the related parties play out is provided in Box I (HOW THE MURUGAPPAS EXERCISE CONTROL THROUGH AMBADI INVESTMENTS LTD).                              

A substantial portion of CIFCL’s revenues is derived from vehicle financing. In the broader finance industry, loans for vehicles, homes, and personal purposes are often accompanied by insurance products, which may be offered by lenders acting as corporate agents of licensed insurers.

At the same time, regulatory guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI) expressly prohibit the compulsory bundling of insurance products with a primary lending product, as well as any practice that induces a borrower to purchase insurance exclusively from a particular corporate agent.

Against this regulatory backdrop, the structure and growth of insurance-related commission income associated with vehicle lending form an important area of analysis in this report, particularly in assessing compliance with applicable insurance distribution norms.

A detailed discussion on regulatory provisions discouraging forced insurance selling is provided in 

here:  

Regulatory Provisions Prohibiting Forced Insurance Selling  

IRDAI has from time to time issued guidelines in the form of regulations to restrain insurance companies from indulging in forced insurance selling and other malpractices.

Regulation 21(ii) of IRDAI (Registration of Corporate Agents) Regulations, 2015, for instance, “expressly forbids compelling the customers to buy insurance”. The proviso which relates to conflict of interest makes it clear that “where the insurance is sold as an ancillary product along with a principal business product, the corporate agent or its shareholder or its associate shall not compel the buyer of the principal business product to necessarily buy the insurance product through it (refer to the IRDAI (Registration of Corporate Agents) Regulations, 2015 enclosed as Annexure 6).

It also makes it mandatory for a corporate agent to submit a certificate with the IRDAI “on half yearly basis certifying that there is no forced selling of an insurance product to any prospect”. A memo issued by IRDAI in August 2916 to all banks and NBFCs, borne out of complaints of malpractices the authority had received, was unambiguous in what was expected of the entities acting as corporate agents. Top on the list of complaints underlined in the memo was “compulsory bundling of insurance products with bank’s products despite express unwillingness of customers” (refer to IRDAI memo titled Complaints of Misselling /Unfair Business Practices by Banks/NBFCs’ enclosed as Annexure 7). Directing corporate agents to desist from such practices, the memo stated, “Instead the banks/NBFCs should have a system which should proactively detect and discourage such kinds of misselling/forced selling/wrong selling.” It remains in the realm of bureaucratic labyrinthine if CIFCL filed any certificate testifying there was no indulgence in forced selling.

IRDAI’s May 2016 Guidelines for Corporate Governance for Insurers in India also leave no room for complacence with regard to RPTs. Provision 3A of these guidelines lays down a regulatory framework for an insurance company to come clean on any conflict of interest (refer to the IRDAI Guidelines for Corporate Governance for Insurers in India enclosed as Annexure 8). It mandates the Board of Directors of the company to formulate a policy on RPTs. “Where it is proposed to enter into a contract or arrangement with Related parties as defined in Companies Act 2013, the disclosures by directors and necessary approvals as required under Section 184, 177(4)(iv) and 188 of Companies Act 2013, read with relevant Rules thereunder, shall be obtained.” The guidelines also state that no auditor, actuary, director and key management personnel cannot “hold two positions in the insurance company that could  lead to conflict or potential conflict of interest”.

___________________________________________________________________________________           

As noted earlier, our investigation indicates that CMGICL recorded insurance commission payments amounting to approximately Rs. 331.53 crore to CIFCL. Given the shareholding and control structure within the Murugappa Group, these payments fall within the category of RPTs as defined under applicable accounting and regulatory frameworks.

We further identified transactions aggregating approximately Rs. 3040 crore reported by CMGICL with nine Murugappa Group entities during the period under review. The disclosure, classification, and structure of these transactions and the questions around them form a central part of our report.

A. Examination of Commission, Work-Contract, and Fee Payments by Cholamandalam MS General Insurance  

Apart from the insurance commissions paid by CMGICL to its corporate agent, CIFCL, as discussed earlier, we have identified transactions aggregating approximately Rs. 3,040 crore recorded by CMGICL under heads such as commission, work contracts, and professional fees.

CMGICL is a company with a reported net worth of approximately Rs. 3,106 crore as of June 30, 2025. According to its disclosures, the company reported gross written premiums of about Rs. 8,328 crore in FY 2024–25.

The scale, structure, and disclosure of these transactions form a key part of the analysis that follows.

• An examination of CMGICL’s filings reviewed by Cobrapost indicates that transactions recorded by the insurer during the period under review were classified under categories such as insurance commission, work contracts, and professional fees. Similar categories of transactions are also examined elsewhere in this report in relation to CIFCL.

• Over the last nine years, CMGICL reported receipt of insurance commission aggregating approximately Rs. 5,869 crore, based on disclosures reviewed.

• Of this amount, transactions aggregating approximately Rs. 1,578 crore were recorded with Murugappa Group entities, as reflected in the filings examined.

• The records further reflect work-contract payments totalling approximately Rs. 426 crore to six Murugappa Group companies during the same period.

• In addition, professional-fee payments aggregating approximately Rs. 1,036 crore were recorded in favour of nine Murugappa Group companies, based on the disclosures reviewed.

But before we delve further, we would like to throw some light on the company first. CMGICL is a joint venture of Cholamandalam Financial Holdings, a Murugappa Group company, and Mitsui Sumitomo Group of Japan. The shareholding pattern is tabulated as under: 

Source: CMGICL Annual Report for the year 2024–25 enclosed as Annexure 9.

As the table shows, the shareholding of CMGICL is a subsidiary of Cholamandalam Financial Holding by virtue of holding 60 percent stake in the general insurer. Since CMGICL is a subsidiary of listed company, it has to fulfill all the regulatory compliance and reporting obligations as applicable to any listed entity.

CMGICL has collected a cumulative premium of Rs. 47,087 crore and earned has a commission of Rs. 5869 crore by selling general insurance products over the last nine years. A detailed breakdown of premium collected and commission earned by CMGICL between 2017 and 2025 is provided here:

Here’s the data formatted into a clean, structured table (Amount in ₹ crore):

Source: Annual Report of Cholamandalam MS General Insurance for FY 2017 to 2025 attached as Annexure 10.

An examination of the data set out in the table below indicates that a substantial portion of the insurance commission reported by CMGICL was recorded in favour of entities associated with the Murugappa Group.

The commission payments reflected in the filings show that amounts aggregating approximately Rs. 1,578 crore were recorded as paid to six Murugappa Group entities, as detailed below. It is, however, interesting to note that a large portion of commission detailed in the table above has been paid to entities related to the Murugappa Group.

The details of the commission paid to six Murugappa Group entities amounting to Rs. 1578 crore are provided here:

Our analysis suggests there have been even larger diversions of funds in the form of contracts and professional fee to nine Murugappa Group entities. These diversions amount to a massive Rs. 1462 crore which are discussed next. The data set out in the table above reveals that CMGICL reported insurance commission receipts aggregating approximately Rs. 5,869 crore over the last nine years. Based on the filings reviewed by Cobrapost, commission payments totalling around Rs. 1,578 crore—approximately 27 percent of the reported commission—were recorded in favour of Murugappa Group entities.

The concentration and disclosure of these commission payments raise questions regarding their implications for stakeholders, including minority shareholders and joint-venture partners like Japanese JV partner Mitsui Sumitomo Insurance Company Limited, an issue examined in the context of applicable disclosure and governance frameworks. Based on the disclosures reviewed, corresponding related-party disclosures for these transactions do not appear to have been reflected in the filings of either the remitting or the recipient entities.

In addition to commission payments, we have identified further transactions recorded by CMGICL under heads such as work contracts and professional fees with nine Murugappa Group entities, aggregating approximately Rs. 1462 crore. The structure, classification, and disclosure of these transactions are analysed in the sections that follow.

(a.) Payments in the Form of Work Contracts

As mentioned earlier, one of the reasons stated for the transfer of funds from CMGICL was for the purpose of work contracts to six related companies. These companies are Chola Insurance Distribution Services, Cholamandalam Investment & Finance Company Ltd., Murugappa Management Services Ltd., Cholamandalam MS Risk Services Ltd., Net Access India Ltd, and Chola Business Services. The total payouts made by CMGICL to these six Murugappa Group companies is estimated at around Rs. 426 crore. The details of the transactions are illustrated in the table here:

As the table below shows, CBSL and Chola Insurance Distribution Services have received, respectively, Rs. 214.80 crore and Rs. 208.86 crore in the forms commission.

Here’s the data formatted into a clean, structured table (Amount in ₹ crore). Dashes (—) indicate no amount reported:

(b.) Payments in the Form of Professional Fee

Out of the funds transferred by CMGICL, Rs. 1036 crore was paid to nine of the Murugappa Group companies in the form of professional fee. The year-wise breakdown of all these questionable transactions has been illustrated in the tables here.

Here’s the data formatted into a clean, structured table (Amount in ₹ crore). Dashes (—) indicate no amount reported:

These Murugappa Group companies got Rs. 106 crore between 2022 and 2025, as illustrated in the table here. Put together, the companies received Rs. 1036.30 crore in professional fee.

In final analysis, CMGICL has stated various means – insurance commission, work contracts, and professional fee – to divert funds worth Rs. 3040 crore. The transaction details are summed up here:

Here’s the data formatted into a clear table (Amount in ₹ crore):

Although CMGICL paid around Rs. 3040 crore in various forms as discussed above, the Murugappa Group listed company did not seem to have made adequate disclosures about these RPTs as mandated by the Companies Act of 2013, SEBI’s LODR guidelines, the Indian Accounting Standards, and finally the IRDA guidelines. The general insurer has made disclosures about only two RPTs worth Rs. 116 crore as detailed in the table here:

Here’s the data formatted into a clear table (Amount in ₹ crore):

(Refer Annexure  5: Related Party Transaction Section)

The issue of partial disclosure of RPTs assumes significance when assessed against the disclosure and governance requirements prescribed under the Companies Act, 2013 and applicable accounting and regulatory frameworks.

Regulatory authorities, in appropriate cases, examine whether incomplete or selective disclosure of RPTs attracts provisions relating to concealment, misstatement, or breach of fiduciary obligations under the Companies Act and other applicable laws, including the Bharatiya Nyaya Sanhita (BNS). Under Indian corporate and criminal law frameworks, matters involving disclosure accuracy, RPTs, and fiduciary conduct are examined by regulatory and enforcement authorities to determine whether statutory thresholds for liability, penalties, or other consequences are attracted. These legal provisions are discussed in detail in the sections that follow in BOX II (NON-DISCLOSURE OF RELATED PARTY TRANSACTIONS: LEGAL FRAMEWORK AND REGULATORY SCRUTINY).     

The Insurance Regulatory and Development Authority (IRDA) Act of 1999 obligates an insurance company and its directors to make disclosures when they enter into a contract or arrangement with related parties. The Act also mandated an insurance company to disclose RPTs in their financial statements. Further, Section 37 of the IRDA Act, which deals with any entity working as a licensed corporate insurance agent, obligates the agent to make related party disclosure. Under these provisions, IRDAI may scrutinise the registration of CMGICL, as an insurer, and Cholamandalam Investment & Finance Co. Ltd., as a corporate agent.

In addition to IRDAI’s various regulatory interventions, the Securities and Exchange Board of India (SEBI) has in recent years broadened the ambit of RPTs including entities within promoter group irrespective of shareholding (The LODR Sixth Amendment Regulations, 2021 enclosed as Annexure 11). The guidelines stipulate prior approval from audit committee and shareholders, and detailed disclosures of these transactions to the SEBI. We have provided a detailed discussion on how important it is for a corporate entity to make full disclosures on all RPTs as required by the Companies Act, the Indian Accounting Standards, SEBI’s LODR Regulations, Bharatiya Nyaya Sanhita (BNS), and other statutes applicable to fund diversions (refer to BOX II).   

Our analysis leads us to the most important question as to why CMGICL did not disclose such large RPTs seemingly in violation of the mandatory requirements of the Indian Accounting Standards (Annexure 12 & 13) and the SEBI and IRDAI guidelines.

The concentration of commission payments and other transactions with Murugappa Group entities identified raises questions regarding their implications for other stakeholders, including CMGICL’s joint-venture partner, Mitsui Sumitomo Insurance Company Limited. Based on the filings reviewed by Cobrapost, commission payments aggregating approximately 30 percent of CMGICL’s reported insurance commission over the relevant period were recorded in favour of Murugappa Group entities. These payments were in addition to amounts recorded under work contracts and professional fees, as detailed in the preceding sections.

The disclosure and treatment of these transactions are examined in this report in the context of applicable related party and governance frameworks governing joint ventures and listed insurers. Cobrapost’s analysis identifies a set of payments and transaction pathways that warrant closer examination in the context of related party disclosures and intermediary arrangements.

• The records reviewed indicate that CMGICL reported transactions involving Chola Insurance Distribution Services Pvt. Ltd., a Murugappa Group entity, which appears in the transaction flow for payments made to various companies and individuals. The structure and disclosure of these arrangements form part of the issues examined in this report.
• Based on the filings examined, entities reflected as recipients of payments routed through Chola Insurance Distribution Services include DHFL Sales and Services Limited, Reliance Communication Limited, IndusInd Marketing & Financial Services Pvt. Ltd., and Group M Media India Pvt. Ltd. These entities are not insurance companies, and the commercial context of such payments is examined in the sections that follow.
• The records reviewed show that DHFL Sales and Services Limited received payments aggregating approximately Rs. 65.28 crore in FY 2016–17 through Chola Insurance Distribution Services. IndusInd Marketing & Financial Services Pvt. Ltd. is reflected as having received payments totalling approximately Rs. 14.47 crore between FY 2016–17 and FY 2018–19, while Reliance Communication Limited received payments aggregating approximately Rs. 3.67 crore in FY 2016–17 and FY 2019–20 through the same intermediary.
• The filings further reflect that other Murugappa Group entities, including Coromandel International Limited, Net Access India Limited, Murugappa Management Services, and Arunachalam Customer Care Service, appear in similar transaction records.
• In addition, the disclosures reviewed indicate that K. Senthil Kumar, identified as an area manager with CMGICL, received commission payments aggregating approximately Rs. 4.64 crore during FY 2023–24 and FY 2024–25. The nature and disclosure of these payments are examined in the context of applicable governance and disclosure norms.

The scope and structure of the transactions identified underscore the importance of comprehensive disclosure, as fuller reporting would have enabled a more complete public and regulatory assessment of the company’s operations and governance practices.

III. Transfer oF Funds Worth Rs. 1654 Cr Through Work Contracts

The analysis of filings reviewed by us indicates that CMGICL recorded transactions aggregating approximately Rs. 3040 crore under heads such as work contracts and professional fees with various Murugappa Group companies, including CIFCL.

In a similar vein, the records examined show that CIFCL recorded work contract payments totalling more than Rs. 1654 crore with over a dozen Murugappa Group entities. The use of work-contract arrangements as a mode for these payments is a recurring feature across the transactions examined and forms a key aspect of the analysis that follows.

After analyzing all these RPTs, Cobrapost has found the following elements characterizing them:

• CIFCL has awarded work contracts to a dozen Murugappa Group entities and paid them sums worth more than Rs. 1654.11 crore.
• Of all these entities, Chola Business Services turns out to be the highest grosser receiving Rs. 1628.36 crore in work contracts.
• Parry Enterprises India Ltd. is second on the list having received Rs. 16.94 crore in a similar manner.
• Cholamandalam Home Finance and CMGICL, the most unlikely candidates, too have received huge payments against work contracts.
• The NBFC does not seem to have made adequate disclosures about these RPTs.

 

As the table here illustrates, CIFCL paid 13 Murugappa Group entities a staggering amount of Rs. 1654.11 crore at various period of time between  2015-16 and 2024-25.

 

Here’s the data formatted into a clear, structured table. Amounts are shown exactly as provided (in ₹):

Of all the companies, CBSL received more than Rs. 1628 crore as detailed in the table. The company received this massive payout through half a dozen transactions in a single year, 2018-19. Among these beneficiaries is AMM Foundation, a home-grown non-profit. Though the amount paid to the Murugappa family NGO is not big, it raises a question as to why a payout which could have been a donation was given for a work contract for a sum as paltry as Rs. 19,364.

The transactions identified in this analysis fall within the category of related-party transactions (RPTs) when assessed against applicable accounting and regulatory definitions.

Examination of CIFCL’s disclosures reveals that RPT reporting appears only from FY 2022–23 onwards, while transactions identified in earlier periods do not appear to have been reflected as RPT disclosures in the filings reviewed. This disclosure pattern forms a key aspect of the governance issues examined in this report.

The acts and omissions of incomplete or delayed disclosure of RPTs (RPTs) is covered under multiple statutory and regulatory frameworks, including the Companies Act, 2013, SEBI’sLODR Regulations, and the Indian Accounting Standards. These frameworks empower regulatory and enforcement authorities to examine whether disclosure practices meet statutory requirements and, where appropriate, whether further action is warranted under applicable civil or criminal provisions. The scope and application of these provisions, including those relating to misstatement, concealment, or fiduciary conduct, are matters for determination by competent authorities under the Companies Act and other applicable laws, including the Bharatiya Nyaya Sanhita (BNS).

Regulators such as SEBI are vested with supervisory and enforcement powers under the SEBI Act to examine such matters and to take action in accordance with law, where warranted.

IV. Paying Professional Fee Worth more than Rs. 662 Cr to Related Parties

Examination of CIFCL’s filings indicates that the company recorded professional fee payments to a number of Murugappa Group entities during the period under review. Based on the disclosures examined, professional fee payments aggregating approximately Rs. 642.95 crore were recorded in favour of five Murugappa Group companies. The filings further reflect that CIFCL recorded payments aggregating approximately Rs. 19.70 crore to 12 senior Murugappa family members, classified as professional fees and salary. Taken together, these payments amount to approximately Rs. 662.65 crore, as per the records reviewed.

The names of these recipient in-house companies are CBSL, Murugappa Management Services, Cholamandalam Home Finance Ltd., Net Access India Ltd., and Cholamandalam Securities Ltd. Among them,  CBSL. alone received a sum of Rs. 430.51 crore paid in professional fee by CIFCL. Murugappa Management Services made Rs. 138.28 crore in professional fee that was paid by CIFCL in 2015-16 and 2021-22, through eight transactions, the last two taking place in 2021–22. Murugappa Management Services has been used as an SPV for fund diversions, as discussed elsewhere in the story.

The table given here is illustrative enough. 

The table above makes another important revelation which again renders these transactions questionable. The Murugappa family members are either on the payroll of or are consultant to CIFCL. All these transactions raise serious questions of corporate governance.

As noted earlier, an examination of CIFCL’s filings indicates that RPT disclosures corresponding to the payments identified in the tables above do not appear to have been reflected in the company’s filings for the relevant periods. The records examined further indicate that Murugappa Group entities which received professional fee aggregating approximately Rs. 642.95 crore similarly do not appear to have reflected corresponding related party disclosures in their filings. The disclosure of these payments by both the remitting and the recipient entities is examined in this report in the context of applicable statutory and accounting frameworks. Issues relating to the completeness and timing of RPT disclosures are governed by statutory and regulatory frameworks under the Companies Act, 2013, SEBI’s LODR Regulations, and applicable accounting standards.

Where disclosure practices fall short of prescribed requirements, regulatory and enforcement authorities are empowered to examine whether such conduct attracts consequences under these frameworks, including provisions relating to misstatement, concealment, or fiduciary obligations. The relevant legal provisions and their scope are outlined in BOX II (NON-DISCLOSURE OF RELATED PARTY TRANSACTIONS: LEGAL FRAMEWORK AND REGULATORY SCRUTINY).

V. TRANSACTIONS AGGREGATING RS. 4103 CRORE RECORDED WITH CHOLA BUSINESS SERVICES

Chola Business Services Ltd., a privately held company within the Murugappa Group, features prominently in the transaction records examined in this report. Filings reviewed by Cobrapost indicate that CBSL recorded receipts aggregating approximately Rs. 4103 crore from CIFCL over multiple years. As discussed earlier, work contract payments recorded in favour of CBSL amount to approximately Rs. 1628.36 crore, based on the disclosures examined. Examination of CIFCL’s filings reviewed by Cobrapost indicates that corresponding RPT disclosures for these payments do not appear to have been reflected in the filings reviewed.

In addition to work contract payments, the records examined show that CIFCL recorded further payments to CBSL under various service-related heads over multiple years, including transactions dating back to periods prior to FY 2015. The nature, classification, and disclosure of these payments are analyzed in detail in the sections that follow.

According to the Cobrapost analysis:

• CBSL works as a manpower supplier for CIFCL.
• It has received Rs. 4103 crore from CIFCL between 2015 and 2025 in what is defined as related party transactions.
• CIFCL has disclosed only Rs. 2045 crore of these RPTs that took place between 2022 and 2025. 
• The non-disclosure of Rs. 2058 crore paid by CIFCL to CBSL is seemingly not in conformity with regulatory guidelines laid down by the Companies Act, SEBI’s LODR Regulations, and Indian Accounting Standards.
• CBSL has made some questionable disbursals further down and the beneficiaries are Mysore Club, Murugappa Management Services and Venkatachalam A, one of the promoters of the Murugappa Group and family members. Venkatachalam has been paid salary worth Rs. 16.50 crore between 2023 and 2025.
• The company has also received Rs. 214.80 crore from Cholamandalam MS General Insurance in professional fee and work contracts as discussed elsewhere in the story.
• It is worthwhile to note that the company has claimed Rs. 180 crore between 2018 and 2025 in deduction under Section 80JJAA of the Income Tax Act for additional hiring of irregular/fake employees with CIFCL.

 

To provide context to the transactions examined in this section, it is useful to outline the shareholding pattern of CBSL and the ownership relationships within the Murugappa Group. This helps explain how control, related-party relationships, and transaction flows are structured among the group entities discussed in this report. The shareholding of CBSL is tabulated below:

Here’s the data formatted into a clear table (Shareholding Percentage):

Source: Shareholding pattern of Chola Business Services enclosed as Annexure 14.

As it can be gleaned from the table above, Chola Insurance Distribution Services Pvt. Ltd. (CIDSPL) owns almost 48 percent of CBSL, whereas Ambadi Investments and Kartik Investments own 19 percent each. Interestingly, CIDSPL has Ambadi Investments as its majority shareholder owning 50 percent of all its stake. CIFCL and CBSL each hold 19 percent stake in the company which is in the business of selling insurance as a corporate agent. The shareholding pattern of CIDSPL is illustrated in the table here:

The shareholding pattern shown in the tables above establishes the fact that Cholamandalam Investment & Finance Co. Ltd., Chola Business Services Ltd., and Chola Insurance Distribution Pvt. Ltd. are all related entities as defined under the provisions of the Indian Accounting Standards and Companies Act. All these aspects have been explained in Box II. As a listed company, Cholamandalam Investment & Finance Company Ltd. (CIFCL) is subject to statutory disclosure requirements in respect of transactions with related parties. Similar disclosure obligations apply to Chola Business Services Ltd. (CBSL) under the applicable corporate and accounting frameworks.

An examination of filings indicates differences between the aggregate value of transactions identified in this analysis and the related-party transaction (RPT) disclosures reflected in the companies’ filings. Based on the records examined, transactions aggregating approximately Rs. 4103 crore were recorded between CIFCL and CBSL over the period from FY 2015–16 to FY 2024–25. Of this amount, RPT disclosures totalling approximately Rs. 2,045 crore appear in the filings from FY 2022–23 onwards.

The disclosures made by CIFCL in its annual reports show questionable transactions as detailed in the table below:

 

        Source: Annual report of CIFCL enclosed as Annexure 15.

 

(a) Questionable Payouts: Following the receipt of funds from CIFCL, Chola Business Services Ltd. (CBSL) recorded further payments to other entities and individuals.

The records examined reflect payments by CBSL to Murugappa Management Services Pvt. Ltd. and to Venkatachalam A, a promoter of the Murugappa Group. According to the filings reviewed, Venkatachalam A received salary payments aggregating approximately Rs. 16.50 crore from CBSL between FY 2023–24 and FY 2024–25, as detailed in the table below. In addition, disclosures reviewed show that Venkatachalam A received compensation aggregating approximately Rs. 18.60 crore from Murugappa Management Services Pvt. Ltd. during the period examined, as discussed elsewhere in this report. The nature, classification, and disclosure of these payments are analysed in the relevant sections.

Curiously, one surprising beneficiary of these payments is Mysore Race Club. The 57-year-old equestrian sports body was paid Rs. 10 lakh in 2020. This seems to be misuse of corporate funds. The breakdown of funds diverted by CBSL is as follows:

 

As noted earlier, CIFCL’s filings reviewed by Cobrapost reflect RPT disclosures for certain transactions with Chola Business Services Ltd. (CBSL) in later financial years. This raises the question of how these transactions were processed and approved under CIFCL’s own Policy on Related Party Transactions, which provides for prior review and approval by the Audit Committee and, where applicable, by shareholders.

Clauses 7, 9, and 10 of CIFCL’s RPT policy outline procedures relating to arm’s-length assessment, post-facto review of unapproved transactions, and mandatory disclosures. An examination of the filings and disclosures reviewed for this report indicates differences between the aggregate transactions identified in this analysis and the approvals and disclosures reflected in the records examined.

The governance framework applicable to listed companies also requires careful consideration of transactions involving promoter-controlled entities, particularly where promoters or non-executive directors may have an interest in the counterparty. The extent to which such interests were evaluated and disclosed in connection with the transactions examined forms part of the governance issues analysed in this report.

In this context, the structure of CIFCL’s staffing-related arrangements with CBSL, a promoter-controlled entity, is examined in detail, including the concentration of such arrangements with a single group company. The commercial rationale, approval process, and disclosure of these arrangements are assessed against applicable corporate-governance and disclosure frameworks. Based on the filings reviewed, related-party transaction disclosures corresponding to several of the transactions identified in this analysis appear only from FY 2022–23 onwards. The scope, timing, and completeness of these disclosures, as well as the downstream payments identified elsewhere in this report, are examined in the context of statutory and regulatory requirements applicable under the Companies Act, 2013, SEBI’s LODR Regulations, and related frameworks.

The determination of whether any conduct attracts civil or criminal consequences under these laws lies within the jurisdiction of competent regulatory and enforcement authorities. The relevant legal provisions and governance standards are outlined in BOX II (NON-DISCLOSURE OF RELATED PARTY TRANSACTIONS: LEGAL AND GOVERNANCE IMPLICATIONS).  

 (b.) Claim of Tax Deduction against Staffing: Apart from the RPTs and questionable payments that CBSL has made, the company has claimed a large deduction under Section 80JJAA of the Income Tax Act, 1961. It is worthwhile to note that CBSL claims to be providing manpower services to CIFCL and these deductions have been made against those services which could have been availed by CIFCL had it recruited the staff directly rather than routing it through CBSL thereby benefiting the promoter-controlled entity. Had the manpower supposedly deployed been legitimate, CIFCL should have claimed the deduction instead of CBSL. It could have made the company and its shareholders., as corollary, richer. 

Analysis of the records of CBSL shows that the Murugappa Group entity is utilizing a large amount of funds towards the manpower cost and claiming tax deduction thereof. The details of the deduction claimed under Section 80JJAA of the Income Tax Act between 2018-19 and 2024-25 are provided in the table here:

 

As can be seen from the table above, CSBL has claimed more than Rs. 180 crore in additional deduction under Section 80JJAA of the Income Tax Act for deployment of additional manpower during the last seven years.

It may be recalled that Section 80JJAA of the Income Tax Act, 1961 was created way back in 1969 to incentivize job creation by businesses and industry. The provision allows employers to claim 30 percent deduction for new hires (Section 80JJAA of the Income Tax Act, 1961 enclosed as Annexure 16.

To quote the provision:

80JJAA Deduction in Respect of Employment of New Workmen – (1) Where the gross total income of an assessee, being an Indian company, includes any profits and gains derived from any industrial undertaking engaged in the manufacture or production of article or thing there shall subject to the condition specified in sub-section (2), be allowed a deduction of an amount equal to thirty percent of additional wages paid to the new regular workmen employed by the assessee in the previous year for three assessment years including the assessment year relevant to the previous year in which such employment is provided.       

The filings reviewed by Cobrapost indicate that, from mid-FY 2022–23 onwards, in respect of payments recorded for services rendered by Chola Business Services Ltd. (CBSL) do not appear in the records examined for the subsequent three financial years. Based on an assessment of the deductions claimed in earlier periods and the disclosures available, the potential tax exposure associated with these claims has been estimated at approximately Rs. 50 crore, excluding applicable interest. The examination of any tax implications arising from these disclosures is a matter within the jurisdiction of the relevant tax authorities.

Cobrapost’s analysis further reviews the staffing-related claims associated with CBSL’s deployment of manpower to CIFCL. The records examined reflect patterns in employee listings, remuneration levels, and payment intervals over successive years. An extract of the employee data reviewed for this analysis. The nature, eligibility, and verification of such claims are examined in this report with reference to applicable tax and employment frameworks.

VI. Transactions Worth Rs. 675 crore by Murugappa Management Services

Set up in December 1972, Murugappa Management Services is a privately held company owned and controlled by Murugappa Group promoters. It has been used as an SPV to divert Rs. 675 crore from 17 group companies between 2017–18 and 2014–25. Murugappa Management Services made huge payouts to dozens of individuals, a slew of entities including related companies, rating agencies, sports bodies like BCCI, among others. The quantum of these payments is an estimated Rs. 365 crore.

• Out of Rs. 365 crore, the Murugappa family members and their close associates have together received Rs. 353.04 crore. Here is a list of top beneficiaries, among a dozen prominent family members:

 

• • Ravichandran V received more than Rs. 55 crore.
  • MM Venkatachalam received more than Rs. 44 crore.    
  • MM Murugappan received about Rs. 42.53.
  • Murugappa Vellayan Subbiah received Rs. 34.84 crore.
  • Murugappan Arunachalam Alagappan received Rs. 35.47 crore.

 

• Two of the eighth Murugappa Group top management officials identified have also received enormous sums in questionable compensation. While Ramesh KB Menon, the group HR head, received Rs. 54 crore, Srinivasan N got an upward of Rs. 21 crore.
• Muruguppa Management Services also paid sums worth Rs. 5.70 crore to four of the dozens of Muruguppa Group companies, including Ambadi Investments Ltd., the Murugappa family’s holding company.
• As is the pattern we have found in all such diversions, there has been no regulatory compliance with regard to disclosure about these RPTs as mandated by the Companies Act, SEBI’s LODR Regulations and Indian Accounting Standards.
• Out of these questionable payments, Rs. 3.59 crore went to Madras Cricket Club, Chennai Super Kings, and BCCI.   

The table here provides details of the companies involved and transactions between them.

 

As the table above shows, five of these companies – Coromandel International Limited, CIFCL, EID Parry India, Tube Investments of India Ltd., and CMGICL – diverted, respectively, Rs. 213.56 crore, Rs. 103.77 crore, Rs. 72.92 crore,  Rs. 69.31 crore, and Rs. 63.64 crore, totaling Rs. 523.21 crore out of Rs. 675 crore transacted from these companies. In all, there were 147 transactions made in this manner.

After receiving the funds, Murugappa Management Services embarked on making huge payouts to dozens of individuals, including kin and close associates, and related companies. The total payout to them stands at Rs. 365 crore.

But before we delve in detail into where these funds ended up, it will be illustrative to discuss the share holding pattern of Murugappa Management Services, and some other companies, to understand how the members of Murugappa clan are the ultimate owners and beneficiaries of these companies and as a corollary are also accountable for all the questionable transactions from the word ‘go’. Here is the shareholding pattern over the last 10 years of the promoter company:

               Source: MCA filings enclosed as Annexure 17.`

It is worth mentioning here that Ambadi Investments Ltd. and Ambadi Enterprises Ltd. are owned by the individual promoter/shareholder(s) of the Murugappa Group. As the table above demonstrates, one of the shareholders of Murugappa Management Services is Chola Insurance Distribution Services the shareholding pattern of which is illustrated below:

               Source: MCA filings enclosed as Annexure 18.

 

Our analysis suggests that CBSL, another promoter company of the Murugappa clan, has received Rs. 4103 crore in questionable transactions from CIFCL. In addition, Murugappa Management Services and Venkatachalam A have together received Rs. 16.50 crore in a questionable manner from CIFCL between 2023 and 2025. These transactions have been discussed in detail somewhere else in the story.

 

It is apparent from the shareholding pattern of these three companies that the Muruguppa family members own and have all managerial control over these companies through an intricate interplay of group companies and subsidiaries.

 

 

A. Payments Recorded to Family Members and Senior Management:

Murugappa Management Services Pvt. Ltd. recorded payments to a range of individuals over the period under review, based on the filings and disclosures examined. The aggregate value of such payments identified in this analysis is approximately Rs. 365 crore.

As reflected in the table below, payments recorded to Murugappa family members and senior management personnel together aggregate to approximately Rs. 353.04 crore. These payments are classified in the records as salary, professional fees, or a combination of both, with individual amounts ranging from approximately Rs. 29.84 lakh to about Rs. 55 crore.Among senior management personnel, the Group’s human resources head received payments aggregating approximately Rs. 54 crore over the relevant period, as detailed in the table below.

One such beneficiary of these RPTs is Arunachalam Vellayan, who has reportedly received more than Rs. 13.59 crore in four tranches of varying amounts as illustrated in the table. The 72-year-old former vice chairman of the Murugappa Group headed the Coromandel International Ltd. and EID Parry India Ltd. till recently before he died.

The lion’s share of all these transfers of funds has been cornered by Ravichandran Venkatachalam, or Ravichandran V in short. He has received more than Rs. 55 crore out of Rs. 365 crore Murugappa Management Services has paid to individuals and entities. Ravichandran V is an engineer and cost accountant and company secretary by qualification. He heads the fertilizer and sugar businesses of the Murugappa family and has been the managing director of Coromandel International Ltd. and is on the board of directors of EID Parry (India) Ltd. He is also the director of the Murugappa Corporate Advisory Board which shows his importance as a member of the Murugappa family.

The recipient of more than Rs. 23.22 crore between 2017-18 and 2022-23 MAM Arunachalam is popularly known as Arun Murugappan, a senior Murugappa family member and a key second-generation leader of the group. A master’s in business administration from the University of Chicago, Arun Murugappan is chairman of group companies like Cholamandalam Home Finance Ltd. and Parry Enterprises. He is also a board member of some of the Murugappa Group entities such as Cholamandalam Investment and Finance Company Ltd., CG Power and Industrial Solutions and Shanthi Gears. Interestingly, Arun Murugappan received more than Rs. 20.72 crore in salary and Rs. 2.50 crore in professional fee.

Another big recipient of the funds diverted by Murugappa Management Services is Murugappan MM. A fourth-generation member of the Murugappa family and current executive director of the Group, Murugappan MM was reportedly paid more than Rs. 42.68 crore in salary between 2017-18 and 2024-25 as illustrated in the table above. Currently, he is chairman of Carborundum Universal Ltd. from which more than Rs. 52.36 crore was paid to Murugappa Management Services.

Murugappa Vellayan Subbiah is another important member of the Murugappa clan who has reportedly received  a staggering sum of Rs. 34.67 crore from Murugappa Management Services in professional fee between 2017-18 and 2021-22. He is also known as Vellayan Subbiah Murugappa and is chairman of CIFCL, CG Power & Industrial Solutions, and Tube Investments of India Ltd. 

One of the most surprising entries among the beneficiaries of these transfers is Ramesh KB Menon who was reportedly paid a salary of more than Rs. 54 crore, only a notch below Ravichandran V, between 2017-18 and 2021-22. Menon is one of the topmost management functionaries of the group, heading its human resource department. Ever since he joined the group as its HR director a decade back, his career growth trajectory has seen a phenomenal rise as he is now an executive director. He has been on the boards of various Murugappa Group entities such as EID Parry (India) Ltd., Murugappa Holdings Ltd., and Ambadi Enterprises Ltd., before becoming a member on the Murugappa Corporate Advisory Board. Menon is also one of the directors of Parry Agro Industries Ltd. according to MCA.

The scale and structure of compensation recorded in favour of certain senior management personnel, as reflected in the filings reviewed by Cobrapost, raise questions regarding the governance, approval, and disclosure processes applicable to such payments.

As detailed in the table above, Ramesh K.B. Menon, identified as the Group’s human resources head, received payments aggregating approximately Rs. 54 crore over the period examined. The basis, classification, and approval of these payments are examined in this report with reference to applicable corporate-governance and disclosure frameworks.

The records reviewed also reflect payments recorded in favour of other senior human resources personnel within the Murugappa Group. Among them, Meghna Bhatt, who was associated with the Group for approximately 11 years, is reflected as having received payments aggregating approximately Rs. 1.86 crore across six transactions between FY 2017–18 and FY 2022–23.

During this period, Ms. Bhatt held senior human-resources roles within the Group, including serving as an associate vice president in 2021 and subsequently overseeing human-resources functions at Tube Investments of India Ltd., before joining Ashok Leyland in April 2024. The nature, timing, and disclosure of these payments are examined in the context of the governance issues discussed in this section.

Apart from Menon and Bhatt, there are five more recipients outside the Murugappa clan who have been closely associated with the group. One of them is Sridharan Rangarajan who has received more than Rs. 4.40 crore in these questionable RPTs. Sridharan is one of the directors of Cholamandalam Home Finance Ltd. He is a non-executive and non-independent director and is president and group chief financial officer of the Murugappa Group. In addition, he holds the charge of Carborundum Universal Ltd. as its managing director and is on the boards of many of the Murugappa Group entities. As illustrated in the earlier table, this is the company from which more than Rs. 52 crore was transferred and pooled into Murugappa Management Services.  

Likewise Srinivasan N, or Natarajan Srinivasan, who is the director of finance at the Muruguppa Group, has received an upward of Rs. 21 crore in salary between 2017-18 and 2018-19. Interestingly, one of the beneficiaries of these payouts is Nand Lal Ganguli, who is an independent director of Parry Agro Industries. Ganguli was reportedly paid Rs. 1.14 crore in professional fee in 2020-21 even though he was not supposed to accept such compensation as an independent director whose job is to ensure good corporate governance. This compensation raises a potential conflict of interest as defined in CIFCL’s RPT policy. 

Furthermore, the majority of beneficiaries (promoters/professionals) happen to be non-executive directors on the board of listed companies and as such are not eligible to draw salaries.

 

B. Payouts to Related Companies:

Apart from making huge payouts to kin and associates, Muruguppa Management Services paid sums worth Rs. 6.41 crore to three of the Muruguppa Group companies. The details of the payouts are provided in the table below:

 

 

However, there has been no disclosure about these related transactions by these companies in compliance with Companies Act 2013 and Accounting Standard (Annual report of companies and related party disclosure enclosed as Annexure 19).

RPT disclosures corresponding to the payments identified in this analysis do not appear to have been reflected in the filings examined, including in relation to payments recorded in favour of Murugappa family members, several of whom are also identified as key management personnel (KMP). The records reviewed reflect that transactions aggregating approximately Rs. 675 crore were recorded as paid by 17 Murugappa Group companies to Murugappa Management Services Pvt. Ltd. In addition, payments aggregating approximately Rs. 353.04 crore were recorded in favour of 21 individuals, including family members and KMP, classified as salary, professional fees, or a combination of both.

The filings examined also reflect payments aggregating approximately Rs. 6.41 crore recorded in favour of Net Access India Limited, Coromandel Engineering Company, and Parry Enterprises India Limited.

The disclosure, approval, and governance aspects of these transactions—by both remitting and recipient entities—are examined in this report in the context of statutory and regulatory frameworks applicable under the Companies Act, 2013, SEBI’s LODR Regulations, and related legal provisions. The determination of any civil or criminal consequences arising from such matters lies within the jurisdiction of competent regulatory and enforcement authorities.

The foregoing analysis sets out a pattern of transactions reflected in the filings involving 17 Murugappa Group companies—many of them listed—and Murugappa Management Services Pvt. Ltd., as well as subsequent payments recorded in favour of family members and key management personnel.

Taken together, these transactions illustrate the scale and concentration of payments to related entities and individuals identified in this report. The structure, disclosure, and governance treatment of these transactions, when assessed against applicable related-party disclosure and corporate-governance frameworks, form a central focus of the issues examined in this investigation. Related party transaction disclosures corresponding to several of these payments do not appear to have been reflected in the records examined. The adequacy and completeness of such disclosures, and the implications for governance and stakeholder transparency, are examined in this report with reference to applicable statutory and regulatory requirements.

C. Payouts to Rating Agencies and Audit Firms:

It is surprising that Muruguppa Management Services has also paid rating agencies and auditors of group listed entities sums worth more than Rs. 2.35 crore as detailed in the table below.    

 

 

It is worth mentioning that Ernst & Young LLP was statutory auditor of CIFCL from 2017-18 to FY 2020-21.

 

d. payouts to cricket clubs

Another surprising find of our analysis is that the promoter group company has also made substantial payments to three cricketing bodies. One of them is none other than the Board of Control for Cricket in India (BCCI), while the other is Chennai Super Kings. Together, the three bodies  have raked in a tidy sum of Rs. 3.59 crore as illustrated in the table below.

 

 

Next, our analysis throws light on huge payouts CIFCL has made to various rating agencies and auditing firms bordering on conflict of interest.

 

VII. Professional Fee Paid To Rating Agencies And Auditing Firms

 

Top in the list of entities which have received professional fee from CIFCL are rating agencies and auditing firms. Four of India’s leading rating agencies, namely, ICRA Ltd., CRISIL Ltd., India Ratings Research Pvt. Ltd., and Crisil Risk Infrastructure Solutions Ltd., a sister concern of CRISIL Ltd., have together received more than Rs. 79.91 crore in professional fee from CIFCL. Similarly, auditing firms like Ernst & Young LLP, PricewaterhouseCooper (PwC), Deloitte Touche Tohmatsu India LLP, SR Batliboi & Associates LLP, and Sundaram & Srinivasan received about Rs. 23.38 crore in professional fee.

However, we have observed some curious elements underlying the fee payments made to these firms by CIFCL:

• There are huge variations in fee payments made to these companies from a few lakh to crores of rupees. For instance, ICRA Ltd., a noted credit rating agency, was paid a fee of Rs. 3.81 crore, Rs. 8.43 crore, and 9.53 crore, respectively, in 2022-23, 2023-24, and 2024-25. Similarly, auditing firm Deloitte Touche Tohmatsu India LLP received Rs. 3.43 crore and Rs. 5.45 crore, respectively, in 2021-22 and 2022-23 in fee.
• There is no consistent fee structure and all the payments made to these entities are arbitrary in nature.
• ICRA Ltd. has reportedly been paid rents by CIFCL in 2019-20 and 2020-21, which is quite surprising.
• There are payments made to sister concerns of some of these companies, both rating agencies and auditors, which brings in the question of potential conflict of interest.
• Noted rating agency CRISIL Ltd. received a compensation totaling Rs. 18.87 crore over a decade since 2016–17, with its sister concern Crisil Ratings Limited & Crisil Risk Infrastructure Solution Limited getting sums as high as Rs. 5.19 crore in a single year. If the agency gave CIFCL a rating A1+ for short term and AA+/Stable rating for long term despite a shooting debt to equity ratio, there may not be an element of coincidence here.
• It may be recalled that SR Batliboi & Associates, one of the auditing firms on the payroll of CIFCL, along with two of its sister firms, was penalized for professional misconduct by the Institute of Chartered Accountants of India (ICAI) as recent as April 2025.

 

Here is an analysis of the fee paid to these entities:.

 

(i.) Fee Paid to Rating Agencies: We have found a wide variation in the fee paid to these credit rating agencies and auditing firms. For instance, the fee ICRA Ltd was paid ranges from around Rs. 15.44 lakh in 2020-21 to Rs. 9.53 crore in 2024-25. In fact, the fee has consistently increased substantially in the past four years from Rs. 2.72 crore in 2021-22 to Rs. 3.81 crore in 2022-23 to Rs. 8.43 crore in 2023-24, and finally to Rs. 9.53 crore in 2024-25. Not only that, the rating agency also saw its fee double in a single year, from around Rs. 3.81 crore in 2022-23 to Rs. 8.43 crore in 2023-24, to finally hit the Rs. 9.53 crore mark a year later.

What is most surprising about these transactions, and which makes them questionable, is two entries shown as rent paid to the agency. CIFCL has reportedly paid a rent of Rs. 68,93,050 to ICRA in 2019-20 and a rent of about Rs. 68.93 lakh in 2020-21. Apart from the rent paid to the agency in 2020-21, CIFCL has reportedly paid ICRA Ltd. twice – approximately Rs. 2 crore and Rs. 15 lakh – in rating fee that year.    

The total fee paid stands at about Rs. 42.19 crore through 13 transactions, as the table here illustrates:

 

 

As can be seen from the table above, along with the rating fee a substantial amount in the form of rent is also paid to ICRA Ltd., which is an obvious conflict of interest with a potential of compromising independence of the auditing firm.

Similar is the case with CRISIL Ltd which has seen a rise in fee payments, rising ten times in less than eight years – from Rs. 55.30 lakh in 2015-16 to Rs. 5.19 crore in 2023-24. Though, the rating agency has seen an almost 50 percent decrease in its fee from this high to about Rs. 2.30 lakh in 2024–25. Crisil Ltd. was paid a cumulative fee of Rs. 18.20 crore in 13 tranches. In addition, CIFCL has also paid a fee of Rs. 65 lakh to Crisil Risk Infrastructure Solutions Limited, a sister concern of CRISIL Ltd. A table showing the fees paid over the years is tabulated as under:

 

 

 

 

Like ICRA Ltd., Crisil Ltd. has also been paid professional fee twice in a single year – Rs. 60.44 lakh and Rs. 93.65 lakh in 2021.

Credit rating is required to be performed as an independent function under the regulatory framework applicable to credit rating agencies. SEBI regulations emphasise the importance of managing and disclosing potential conflicts of interest, including those arising from fee arrangements with related or affiliated entities. In this context, payments made to related entities of a rating agency, as reflected in the filings reviewed, raise questions that warrant examination against SEBI’s conflict-of-interest and independence requirements for credit rating agencies.

The fee payments reflected in CIFCL’s filings show significant variation across years and across different rating agencies. When read alongside publicly disclosed financial indicators such as leverage and borrowing levels, these fee structures raise questions regarding the commercial rationale, scope of services rendered, and the safeguards in place to ensure the independence of the rating process.

SEBI’s regulatory framework for credit rating agencies places emphasis on independence, transparency, and the management of conflicts of interest. The relationship between fee arrangements and rating outcomes is therefore examined in this report in the context of these regulatory expectations, without drawing conclusions on the propriety of any individual rating decision.

CIFCL’s debt to equity ratio has seen a steady increase in the past three years, from Rs. 5.90 in 2022 to 7.40 in 2025. Apparently, this higher debt to equity ratio means CIFCL is using more debt financing for its business to grow which in turn means there is a higher business risk. For the record, CRISIL Ltd. gave CIFCL a rating of CRISIL A1+ for short term and CRISIL AA+/stable rating for long term. Is it a coincidence or something else?

All these transactions can be summed up as follows:   

 

 

 

(ii.) Fee Paid to Auditing Firms: CIFCL has made payments to various auditing firms including Ernst & Young and PricewaterhouseCooper (PwC) between 2015-16 and 2024-25 in professional fee. It is worthwhile to highlight the various firms appointed by CIFCL as its statutory auditors and joint auditors:

 

 

               Source: Annual report attached as Annexure 20.

 

(a.) A detailed breakdown of the fee paid to SR Batliboi & Associates LLP, an accounting firm, and its global partner Ernst & Young LLP, by CIFCL between 2017-18 and 2024-25 is provided in the following table:

 

 

As can be seen from the table, there is a steep variation in the audit fee paid to SR Batliboi & Associates, which ranges from a low of Rs. 6.18 lakh in 2024-25 to an outrageously high sum of Rs. 2.97 crore in 2019-20. The accounting firm was paid another a seemingly high sum of Rs. 2.26 crore in 2023-24. It is worthwhile to note that the accounting firm was penalized by ICAI along with two of its sister firms for professional misconduct as recent as April 2025. Interestingly, SR Batliboi & Associates had resigned from their position as statutory auditor in 2021 and still CIFCL has continued to pay the firm. Curiously, SR Batliboi & Associates LLP were also independent auditors of Cholamandalam Financial Holdings Ltd. in 2021.

Further, as mentioned in the table above, the sister concern of SR Batliboi & Associates LLP viz. Ernst & Young LLP and Ernst & Young Associates LLP has received a sum of Rs 7.84 crores during FY 2017-18 to 2024-25 which includes period when SR Batliboi & Associates LLP were discharging the attest function of financial statement in possible conflict of interest.    

 

(b.) Similarly, the fee payouts CIFCL made to Deloitte Touche Tohmatsu India LLP vary wildly, as the table here illustrates – from as little as Rs. 10 lakh in  2015-16 to Rs. 5.45 crore in 2022-23, a way bit higher than it was the preceding and following years, which is respectively, Rs. 3.43 crore and Rs. 2.90 crore. Its sister concern Deloitte Haskins & Sells LLP has also been paid various sums in fee, which also fluctuates wildly from year to year, between 2015-16 and 2024-25. Together both companies have collected a fee of more than Rs. 17.02 crore in a span of nine years.

According to information available in public domain, Deloitte Touche Tohmatsu India LLP was the statutory auditors for CIFCL in 2017–18. The auditing firm has been appointed statutory auditor by CIFCL for the last fiscal year. Deloitte was CIFCL’s auditors and their six-year tenure ended in 2016. The firm was the statutory auditors of CIFCL in 2007 when its joint venture Cholamandalam DBS Finance Ltd. launched an offer for the private placement of 1,42,29,929 equity shares aggregating to Rs. 199.22 crore.

 

 

Interestingly, Deloitte Haskins & Sells LLP is an statutory auditor which means its job is to provide a true and fair view of the NBFC’s financial results without any prejudice and misstatements. With both the parent and the sister concern working for CIFCL, in different capacity, creates a potential conflict of interest.

(c.) As illustrated in the table here, CIFCL has paid Sundaram & Srinivasan a fee totalling Rs. 5.11 crore for their tenure from 2021-22 to 2023-24 as joint auditor:

 

 

It is clear from the table here that  Sundaram & Srinivasan has received a larger fee than the other joint auditor PwC during the same period.

It is important to highlight the fact that the code of conduct enshrined in the ICAI charter clearly restricts the accounting firms or their associates to accept any fees other than audit fee (ICAI code enclosed as Annexure 21).

  

VIII. Payments Made to Trade Bodies and Non-Profits

 

Our analysis has identified dozens of work contracts involving 21 entities. However, these entities are not commercial. They rather include trade bodies, of non-profit variety, like Raipur Automobile Dealers Association, animal care bodies like Madras Canine Club, sports bodies like Madras Riding School, an alumni body like Doon School Old Boys Society, and some charitable trusts. Together, these 21 entities have been paid more than Rs. 20.94 crore through 32 transactions, which took place between 2016-17 and 2024-25, ranging from as little as Rs. 1 lakh to as high as Rs. 7 crore as illustrated in the following table:

 

A highlight of these transactions resulting in payment of a tidy sum of Rs. 20.94 crore is the payment of Rs. 7 crore CIFCL has made in two tranches to Isha Utsav, an annual carnival, held by Isha Foundation owned by spiritual guru Jaggi Vasudev. Another transaction of interest is the payout made to a trade body consisting of automobile traders or dealers. CIFCL has reportedly paid a handsome amount of Rs. 1.75 crore to Raipur Automobile Dealers Association, a Chhattisgarh-based trade body, in  2022-23. Another trade body is Federation of Automobile Dealers Association which also has received Rs. 36.50 lakh. This Delhi-based trade body was established in 1964 and has 15000 dealers as its members. Since CIFCL’s bulk business comes from financing automobiles sale, there is a potential conflict of interest here.   

These apparent donations have been cloaked as work contracts which makes all these transaction questionable even if the Murugappas had the intention to play philanthropist. The question is why should they donate in this manner and that too out of the money diverted by CFICL from borrowed funds?

It is surprising to note that Isha Foundation and Isha Leadership Academy are also among the beneficiaries, together receiving Rs. 1,99,31,131 in professional fee.

The filings reviewed show that CIFCL recorded payments to certain non-profit and charitable organisations under heads such as work contracts and professional fees, rather than as contributions under its corporate social responsibility (CSR) framework.

Section 135 of the Companies Act, 2013 sets out the statutory framework governing CSR obligations for qualifying companies, including requirements relating to the formulation of a CSR policy, constitution of a CSR committee, board oversight, and disclosure of CSR expenditure. The manner in which payments to the above-mentioned entities were classified and disclosed is examined in this report in the context of the CSR framework prescribed under Section 135, including the governance and approval processes typically associated with CSR expenditure, as detailed in Annexure 22.

IX. Questionable Loan Disbursal Practice of CIFCL

It was in order for us to look at loan disbursals by CIFCL to get a broader picture of its functioning. After analyzing financial statements and balance sheets of dozens of CIFCL’s corporate borrowers, Cobrapost has catalogued 38 entities which have paid large interest in interest against the loans between 2015–16 and 2024–25. However, only a few of them have filed charge register declaring their outstanding debts.   

Legally speaking, a charge register is a statutory filing providing details of financial liabilities including mortgages made against loans availed off by a company and other assets like an immovable property used as a collateral. It is mandatory for companies to file a charge register under the Companies Act of 2013, along with its balance sheet and annual statement, to inform on who has a claim or priority rights over its assets in case of default and liquidation. A borrower company has to file a charge register with the Registrar of Companies within 30 days of charge is created against a loan facility. In case the borrower company fails to comply with this regulatory requirement, the lender/charge holder can apply with the Registrar of Companies for registration of charge after giving a 14-day notice to the borrower company. Section 77 of the Companies Act of 2013 clearly makes it obligatory for a borrower company to create a charge against a loan facility (Annexure 23). The provision reads as follows:

It shall be the duty of every company creating a charge within or outside India on its property or assets or any of its undertakings, whether tangible or otherwise, and situated in or outside India, to register the particulars of charge signed by the company and the charge holder together with the instruments, if any, creating such charges in such form on payment of such fees and in such manners as may be prescribed with the Registrar within 30 days of its creation.

 

The obligations of both the borrower company and the lender have been clearly defined by the Ministry of Corporate Affairs in the Companies (Registration of Charges) Rules, 2014 issued vide its notification dated March 31, 2014 (Annexure 24). Proviso of Rule 3 outlining the registration or creation or modification of charge reads:

For registration of charge as provided in sub-section (1) of Section 77, Section 78, Section 79, the particulars of the charge together with a copy of instrument, if any, creating or modifying the charge in Form No. CHG-1 (for other than debentures) or Form No. CHG-9 (for debentures), as the case may be, duly signed by the company and the charge holder [shall be filed] with the Registrar within a period of 30 days of the date of creation or modification of charge along with the fee.      

 

In case of non-compliance on the part of the borrower company, the lender/charge holder can register the charge against the loan with the Registrar of Companies and also can claim any fee paid for the same from the borrower company.       

Here, we have detailed the 38 borrower companies, the outstanding loans some of them have showing in their books, the amount of interest they paid over the past three years largely to CIFCL. Together, these companies have paid an upward of Rs. 67.66 crore in interest in the past three years:      

Analysis suggests many of these companies have failed to create charge against the loans, and those which filed charge have not provided complete details of their outstanding liabilities to CIFCL. There is, however, a very noticeable oddity in the disbursal of loans by CIFCL. In this particular instance, CIFCL extended the loan to DCC Infotech not as a regular loan but as a channel finance. In banking parlance, channel finance is a kind of special arrangement for providing funds to associates, agents, and the like by a lending company. DCC Infotech owes Rs. 787.26 lakh in loans against which the company has paid Rs. 1,08,34,177 in interest to CIFCL in the last two years – 2023-24 and 2024-25.

Out of the 38 companies we have analyzed, only three companies – Jaika Automobiles & Finance Private Limited, Tips One Private Limited, and Shivani Locks Private Limited – have created charge against the loans they have availed from CIFCL. We have found a typical case where charge against a loan has been filed by a third, though related, party. Ashlar Education Consultants Pvt. Ltd., a Noida-based publishing company, has been advanced a loan of Rs. 682.81 lakh from CIFCL. But the charge against this loan has been filed by Saphire Cover Makers, a Ashlar Group subsidiary.

According to the financial statements, Zetwerk Manufacturing, Abhiyan Dealcomm, Aviom India Housing Finance, and Apollo Green Energy Ltd. have registering of charge against the loans availed by them is still pending.       

Here is a summary of what our analysis found:

1. Service Lee Technologies: This company has paid Rs. 3,45,96,998 in interest. Though it has reported unsecured loans in its balance sheet, it has not provided lender-wise loan details (Annexure 25).
2. Smartpaddle Technology: Its 2023 balance sheet shows that all loans are secured but charges have not been filed against them. Lender-wise details have not been provided. It is likely that CIFCL has provided a bill discounting facility, a kind of loan lent directly to the agent. The company has paid Rs. 5,55,63,595 in interest (Annexure 26).
3. Jaika Automobiles & Finance: The company has paid an interest of Rs. 3,69,88,191 and has also filed charge against loans (Annexure 27).
4. Medec Medicare Limited: This company has received an unsecured loan of Rs. 17.49 crore from CIFCL and Progfin Pvt. Ltd. against which it has paid an interest of Rs. 1,70,88,756. But there are no lender-wise details available in the balance sheet. No charges has been registered with the Registrar of Companies (Annexure 28).
5. Sael Agri Commodities Ltd.: The balance sheet reports an unsecured loan but no lender-wise details are available. It has paid an interest of Rs. 2,84,98,485 (Annexure 29).
6. Tips One: There is a vehicle loan in the name of Indian Public School Private Limited against which Rs. 3,29,91,009  has been paid in interest. Charge has also been created. (refer to note 39 of the financial statement enclosed as Annexure 30)
7. Zetwerk Manufacturing Businesses: Charge creation pending for the loan against which the company has paid an interest of Rs. 5,53,23,076 (Annexure 31).
8. IPEC India: The balance sheet for the year 2023–24 shows an outstanding loan of Rs. 1 crore but other details are missing. The company has paid Rs. 94,00,772 in interest in the financial year of 2024-25 (Annexure 32).
9. Abhiyan Dealcomm: The company has paid Rs. 2,18,54,424 in interest against the loan it has availed. But charge creation is pending (Annexure 33).    
10. Indian Terrain Fashions Ltd: Though the company has paid Rs. 3,80,55,152 in interest in the past three fiscal years, its balance sheet shows no loan from CIFCL (Annexure 34).
11. Amit India Name Plates: There is no mention if the loan is secured or unsecured in the financial statement of the company. It has paid an interest of Rs. 1,56,93,264 in the past two fiscal years (Annexure 35).
12. Aviom India Housing Finance: It has paid Rs. 3,08,81,532 in interest against the loan in the past three fiscal years. Charge creation against the loan is still pending (Annexure 36).
13. Bhandari Automobiles: Strangely, the financial statement does not record any loan from CIFCL, though the company has paid Rs. 1,46,65,310 in interest in the past three years. (Annexure 37)
14. DCC Infotech: DCC Infotech: This company has received an unsecured channel finance facility – a kind of loan extended to an agent instead of the real borrower – from CIFCL. It has an outstanding loan of Rs. 787.26 lakh against which it has paid Rs. 1,08,34,177 in the past two fiscal years (Annexure 38).
15. Apollo Green Energy Ltd.: Charge creation against the loan it has received from CIFCL is still pending. The company has paid an interest of Rs. 1,42,31,404 in the last two financial years  (Annexure 39).
16. Shivani Locks: This company has two sets of outstanding loans against which it has paid Rs. 1,59,72,709 in interest. One loan worth Rs. 2.95 crore has been availed with the director’s property as security. The other loan of Rs. 2.34 crore is against vehicles. But the company has created partial charge against loans of Rs. 45 lakh and Rs. 72 lakh, respectively  (Annexure 40).
17. Poshs Metal Industries: The balance sheet reports a long-term unsecured loan of Rs. 590.67 lakh. Details about lenders missing. (Annexure 41)
18. Kalasakthi Agro: The balance sheet has reported a long-term unsecured loan of Rs. 590.67 lakh against which the company has paid an interest of Rs. 22372176 in the past three years. Details about lenders missing (Annexure 42).
19. Ananda Dairy Ltd.: The balance sheet does not report any loan from CIFCL, though the company has reportedly paid Rs. 2,15,75,865 in interest (Annexure 43).
20. Nipun Builders & Developers: The company has provided details of the interest it has paid against the loan in the past three years which stands at Rs. 1,43,46,388. The balance sheet, however, does not provide details about the lenders (Annexure 44).
21. Ashlar Education Consultants: The company has reported a loan of Rs. 682.81 lakh against which it has paid an interest of Rs. 81,84,957 in the past two years. According to the balance sheet, the loan has been secured against property owned by Ashalr Group subsidiary Saphire Cover Makers. Charge has also been filed by Saphire Cover Makers Annexure 45).
22. Nilkanth Infra Mining Ltd.: The loan is against vehicle as per page 97 of the balance sheet and the company has paid Rs. 9781148 in interest. No details about the lenders provided (refer to note 42 in Annexure 46).
23. Wheel Flexible Packaging: The balance sheet shows an unsecured loan of Rs. 9 crore against an interest of Rs. 1,40,71,852 in the past three years. But there are no lender-wise details available (Annexure 47).
24. Apollo Micro Systems Limited: The company does not have any debt according to its balance sheet but has Rs. 71,12,654 crore in interest in the past two years (Annexure 48).
25. Signet Industries Limited: This company has availed an unsecured purchase invoice discounting facility – a kind of short-term working capital – from Cholamandalam Investment & Finance Company Ltd. This facility of Rs. 10 crore was provided at the “Chola Reference Rate – 5.28% P.A” against which Signet Industries has paid an interest of Rs. 1,65,23,466 over the last two years. There is no outstanding against the facility as on March 31, 2025. The company had provided the lender post-dated cheques worth Rs. 403.69 lakh against this facility. Lien marked was also provided to Cholamandalam Investment & Finance Company Ltd on a fixed Deposit of Rs. 1.50 crore (refer to page 70 of the balance sheet enclosed as Annexure 49).
26. Sanjay Chemicals (India): No lender details have been provided in the balance sheet for a vehicle loan as mentioned on page 174 (Annexure 50), against which the company has paid Rs. 1,92,96,082 in interest. No charge has yet been registered for this loan.
27. Manikaran International: According to the balance sheet, the company has availed a secured loan of Rs. 864.58 lakh against which Rs. 2172296 has been paid in interest in the past three years. No charge has been filed by the company (Annexure 51)
28. Transtek Infoways: There is an unsecured loan of Rs. 14 crore recorded in the balance sheet, but there are no lender-wise details available. An interest of Rs. 15956437 has been paid against the loan in the past three years (Annexure 52).
29. Shree Sakha Developers: The balance sheet shows a secured loan of Rs. 456.97 lakh against which Rs. 56,05,858 has been paid in interest in the past two financial years. No charge has been filed (Annexure 53).
30. Maa Kudargarhi Steels: The company has availed an unsecured loan of Rs 50 lakh from CIFCL against which it has paid Rs. 71,29,551 in interest. There is an outstanding loan of Rs. 43.32 lakh (Annexure 54).
31. Ravi Surya Developers: It has availed a secured loan against which Rs. 1,11,51,550 has been paid in interest.  But the company has not filed any charge against the loan. There is an outstanding debt of Rs. 413.87 lakh (Annexure 55).
32. Logica Infoway Limited: The company has provided no details with regard to the new loan it has availed in its balance sheet as on March 31, 2024. Rs. 46,14,928 has reportedly been paid in interest (Annexure 56)
33. Arvind Motors: There are no lender-wise loan details available in the balance sheet of the company. It has availed an unsecured loan of Rs. 151.25 lakh against which the company has paid Rs. 69,89,778 in interest the last fiscal year (Annexure 57).
34. Micro Protect Engiequipment: The company has availed a secured loan against which it has paid an interest of Rs. 55,75,760. But no charge has been filed by it (Annexure 58).
35. Lupin Gases: It has availed both secured and unsecured loans which are still outstanding. The secured loan of Rs. 478.67 lakh has a director property mortgaged against it. A loan of Rs. 31.93 lakh stand as unsecured. The company has paid an interest of Rs. 9867149 in the last three fiscal years (Annexure 59).
36. Paramount Tea Marketing: Strangely, the company has not recorded any loan in its balance sheet it has availed from CIFCL, though it has made Rs. 1,42,33,182 in interest payments in the last three years (Annexure 60).
37. Woodland (Aero Club): Its balance sheet does not have any lender-wise loan details. There is an unsecured loan of Rs. 43.85 lakh, though, against which the company has made payments of Rs. 76,61,281 in interest (Annexure 61).
38. Vikas Air Solutions: The company has shown no loan from any financial institution but only a limit from a bank. It has paid Rs. 43,86,326 in interest last year according to the balance sheet (Annexure 62).

As detailed above charges corresponding to loan facilities are not reflected as registered with the Registrar of Companies in the records examined. The absence of such charge registrations in the filings reviewed raises questions regarding the disclosure and documentation of certain loan transactions, and forms part of the broader analysis of CIFCL’s loan disbursal and reporting practices presented in this report.

The completeness of charge registration across all borrower entities, and the full extent of such arrangements, are matters that fall within the scope of statutory review by the appropriate regulatory authorities.

X. Promoters Get Unjust Enrichment, Investors Get a Raw Deal

To place the transactions examined in this report in a broader shareholder context, Cobrapost analysed the pattern of dividend distributions by selected Murugappa Group companies over the relevant period. This analysis compares dividend payouts by CIFCL with those of other listed group companies, including EID Parry Ltd., Coromandel International Ltd., Tube Investments of India Ltd., Carborundum Universal Ltd., Wendt India Ltd., and Shanthi Gears Ltd.

As reflected in the table below, CIFCL ranks as the second-largest dividend payer among these companies during the period examined, after Coromandel International Ltd. The dividend patterns identified are examined in this report alongside the transaction and disclosure issues discussed earlier, to assess their implications for shareholder returns and capital allocation practices.

The company has paid Rs. 648 crore in dividend to its promoters over the past nine years between 2017 and 2025.

In addition to the dividend, the promoters have been enriched to the tune of ~Rs. 10,000 crore as discussed in the story, a significant part of which went to the Murugappa Group promoters and their KMP.

The common shareholders have only received the dividend at par with promoters while they did not have any share in the ~Rs 10000 crores related party transactions as discussed in story. Had these huge amount been preserved in the companies, the shareholders would have been equally enriched. Considering 50% share of common shareholder, they would have been valued by ~Rs 5000 crores more.

Having said that, the issues examined in this report have broader implications for multiple stakeholders, including minority shareholders, lenders, institutional investors, and the public interest.

The scale of the transactions and disclosure practices identified also raise serious questions regarding their potential fiscal and governance implications, including the manner in which revenues, expenditures, and related-party payments are classified and reported under applicable tax and regulatory frameworks. The issues identified raise significant questions concerning corporate governance, transparency, and stakeholder accountability—particularly for listed entities operating in regulated sectors and managing large volumes of public and institutional capital.

Taken together, our investigation highlights the importance of transparency, disclosure integrity, and effective oversight in ensuring that capital allocation and related-party arrangements are subject to appropriate scrutiny and accountability. The assessment of any financial, tax, or legal consequences arising from these matters rightfully lies within the jurisdiction of the competent regulatory and enforcement authorities, which hopefully would take cognizance of this report and take the necessary action to protect minority shareholders, lenders, and thousands of retail investors and depositors and the integrity of the broader financial system.

 

   

Disclaimer:

This story is based on multiple official and public third-party sources, including statutory filings; regulatory orders and documents published by the Ministry of Corporate Affairs, the Securities and Exchange Board of India, the Reserve Bank of India, the Insurance Regulatory and Development Authority of India; and information provided by sources. Every effort has been made, in good faith, to be complete and meticulous in extracting, collating, interpreting, and verifying the said information in the interests of our readers and the public. Despite best efforts, if any inadvertent and unintentional errors remain, we request you to contact us on contact@cobrapost.com to enable us to rectify them immediately.