Cholamandalam Investment and Finance Company held a comprehensive investor call on December 23, 2025, to address governance allegations made by an external agency. Executive Chairman Vellayan Subbiah, Managing Director Ravindra Kundu, and CFO Arul Selvan provided detailed clarifications on various concerns raised, reaffirming the company's strong financial position and compliance practices.

Management Calls Allegations Malicious and Baseless

Vellayan Subbiah opened the call by categorically rejecting the allegations as "malicious and baseless" with "ulterior motives." He emphasized that the company's performance, asset quality, and liquidity position remain robust as disclosed in audited financial statements. The management confirmed there has been no revision to earlier guidance and the company will continue delivering as per its board-approved business plan.

Cash Collection Practices Defended

Addressing allegations about large cash deposits, management explained that over 50 lakh customers across 1,700 branches include Self-Employed Non-Professionals (SENPs) who earn and pay in cash. "Some of these borrowers obviously earn and pay in cash, including for their EMIs from us. The amounts we collect in cash have to be deposited in banks," Vellayan Subbiah clarified. Cash collections have reduced significantly from 50% earlier to just 15% currently, with all KYC and income tax compliance done as per legal requirements.

Related Party Transactions Clarified

Management provided comprehensive explanations for related party transactions, particularly addressing the ₹10,000.00 crore figure cited by the agency. Arul Selvan explained this represents accumulated data over eight years (2017-2025), during which regulatory requirements for related party disclosures evolved.

"At every point, the company ensured compliance with the law prevailing then. Applying current disclosure norms retrospectively is completely incorrect," Arul Selvan emphasized.

Murugappa Management Services Structure Explained

Regarding payments to Murugappa Management Services (MMS), Vellayan Subbiah clarified that MMS was incorporated to provide consulting services to all 29 Murugappa Group businesses. The entity centralized functions like business plan reviews, M&A activities, corporate communication, HR, and governance across the group.

Rating Agency Fees Within Industry Norms

Management provided specific details on rating agency payments, demonstrating they are well within industry standards:

This represents just 0.01% of total borrowings, which management noted is "slightly lower than industry" standards.

Strong Operational Performance Continues

Despite the allegations, the company's operational metrics remain strong. Ravindra Kundu indicated that Q3 FY25 would be a "turnaround quarter" with improved disbursements in vehicle finance and home loans. The management expects better numbers compared to the first half, with traditional seasonal improvements in delinquency during Q3 and Q4.

Management concluded by reserving the right to take legal action against the agency for damaging the company's reputation and interests, while reaffirming their commitment to transparent communication with investors and stakeholders.

Cholamandalam Investment and Finance Company Limited has issued a detailed clarification under Regulation 30 of SEBI Listing Regulations, categorically denying all allegations made against the company and its associates. The financial services firm has described the charges as malicious and baseless, stating they are driven by ulterior motives.

Strong Financial Position Reaffirmed

The company has reassured investors about its robust financial health and performance metrics. Key financial indicators demonstrate the company's strong position in the market.

The company maintains strong credit ratings of AA from ICRA, India Ratings and CARE. The Asset Liability Management (ALM) across time buckets remains positive, indicating healthy liquidity management.

Response to Specific Allegations

Cholamandalam Investment has provided detailed clarifications on various allegations raised in blogs and posts by certain agencies. The company has addressed concerns about its financial practices, related party transactions, and compliance matters.

Cash Collection Practices

The company explained its large cash deposits stem from serving over 50 lakh customers across 1,700 branches, primarily small road transport operators and self-employed non-professionals in rural and semi-urban areas. These borrowers typically earn and pay in cash, including EMIs, which are then deposited in banks following proper KYC and income tax compliance.

Related Party Transactions

All related party transactions are disclosed in full compliance with legal and accounting requirements in the financial statements. The company cited examples including insurance premium collections for borrower policies paid to subsidiary Cholamandalam MS General Insurance Company Limited, and payments for manpower, strategic services, and IT requirements to related entities.

Capital Structure Enhancement

The company's net worth increase includes the conversion of ₹300 crores of Compulsorily Convertible Debentures (CCDs) issued in FY24. An additional ₹1,700 crores of CCDs is expected to be converted in the next three quarters, further strengthening the company's capital base.

Cholamandalam Investment has committed to transparent communication with investors and stakeholders while reserving the right to take action against agencies causing damage to its reputation and integrity. The company maintains that all operations are conducted in compliance with applicable laws and regulatory guidelines.