The company has not accepted any deposits from the public since March 22, 2011, in compliance with its status as a non-deposit-accepting NBFC.

Manappuram Finance will take immediate steps to completely ring-fence its operations and ensure there is no overlapping of business, assets, branches or personnel with other entities owned by the promoters or their family members. The Board of Directors of the company met at Thrissur to review the operations and performance in the context of the recent communication received from the RBI. The Board also directed the company to take all measures to fully address the concerns raised by the central bank.

To enhance governance and better manage growth to the next level, the Board also decided to constitute an independent committee under the chairmanship of Mr Jagdish Capoor (former Deputy Governor of RBI and former Chairman of HDFC Bank). This committee will review relevant aspects of operations, systems, controls and organisational structure, including Board composition and effectiveness.

Review exercise

The committee was free to appoint leading independent legal counsel and other advisors as was deemed appropriate to assist with the review. Further, the company proposed to retain a leading accounting firm to supplement the in-house internal audit team. A leading law firm, Amarchand Mangaldas, and the internationally reputed accounting firm, KPMG, will assist the committee in this independent review exercise.

At the outset, the Board noted that the company has not accepted any deposits from the public since March 22, 2011, in compliance with its status as a non-deposit-accepting non-banking finance company.

Mr V.P. Nandakumar, Executive Chairman, Manappuram Finance, assured the Board members of his fullest support and cooperation. He pointed out that he had issued public notices in newspapers undertaking to honour all obligations to the depositors of his proprietary concern Manappuram Agro Farms, without causing any inconvenience to them. The Manappuram Finance scrip closed lower at Rs 46, a fall of 2.44 per cent over the previous close.

cj@thehindu.co.in

(This article was published on February 13, 2012)
XThese are links to The Hindu Business Line suggested by Outbrain, which may or may not be relevant to the other content on this page. You can read Outbrain's privacy and cookie policy here.