M&M Finance tanks 8% as co defers board meet after Rs 150 cr fraud detected at a North East branch
Shares of M&M Financial Services plunged 8 percent in early trade on April 23 after the company postponed its scheduled board meeting, originally planned for today, to discuss its fourth-quarter results. This delay comes in light of a fraud discovery at one of the company’s branches located in the North East region. The fraud involved forgery of KYC documents related to retail vehicle loans, resulting in the misappropriation of company funds.
At 10.02 am, shares of M&M Finance were trading at Rs 266.70 on the NSE. The news of the fraud also spooked investors and tipped off a spike in volumes in the counter as 84 lakh shares changed hands on the exchanges so far, significantly higher than the one-month daily traded average of 27 lakh shares.
According to M&M Finance’s notification to the stock exchange, the fraudulent activity has led to the misappropriation of company funds. The estimated financial impact of this deception is anticipated to be within Rs 150 crore, as stated in the exchange filing. In response to the situation, the company has promptly initiated necessary corrective measures.
The company has identified necessary corrective actions and has informed exchanges that a few persons involved have been arrested.
The Audit Committee and Board Meeting on the same date will address other agenda items, including discussions on raising aggregate borrowing limits and issuing Non-convertible debentures. Additionally, the annual earnings conference call has been deferred.
