M&M Finance defers release of Q4 results after detecting ₹150 crore fraud; details here

Mahindra & Mahindra Financial Services (M&M Finance) informed the exchanges in the early hours of Tuesday, April 23, that it would be deferring the release of its results for the fourth quarter of financial year 2023-24 (Q4 FY24) due to the detection of a ₹150-crore fraud.

The non-banking finance company’s board of directors was earlier scheduled to meet on April 23 to consider and approve the release of the quarterly earnings report.

“…we hereby inform you that during the end of 4th quarter of the financial year ended 31st March 2024, a fraud was detected at one of the company's branches in the North East,” the regulatory filing stated.

In view of this development, the agenda matters pertaining to approval of financial results of the company and the recommendation of dividend, which were to be considered at the board meeting scheduled today, “are being deferred to a later date”, it added.

‘₹150-crore fraud’

The fraud, detected at one of the NBFC’s branches in the country’s North East, pertained to retail vehicle loans disbursed by the company. It involved “forgery of KYC documents leading to embezzlement of company funds”, M&M Finance told the bourses.

The investigations in the matter are at an advanced stage, it said, adding that the financial impact of this fraud is “unlikely to exceed ₹150 crores”.

“Investigations are underway, and necessary corrective actions have been identified and are at various stages of implementation, including arrest of a few persons involved,” it added.

M&M Finance has not specified the date of the next board meeting to consider and approve the release of the quarterly results. In the preceding December quarter, the company had reported a 12% year-on-year drop in net profit at ₹553 crore. The net interest income came in at ₹1,815 crore, up 21% as against the year-ago period.

On April 22, the shares of M&M Finance had settled 1.5% lower at ₹278.85 apiece on the NSE.