Vellayan Subbiah, Executive Chairman of Cholamandalam Investment & Finance Company
Cholamandalam Investment and Finance Company Ltd (CIFCL), on Tuesday, said that allegations raised against the company by a media portal were “malicious and baseless,” and wants regulators to look into the motives behind it. The company is also evaluating legal action against the publishers of the post, it added.
The company executives, in a specially-convened analyst call on Tuesday, also acknowledged that they have already started reorganising the company structure and related-party arrangements to simplify them.
“A lot of the facts (in the blog post) have been distorted and presented selectively; They’ve taken standard industry practice and presented in a way that kind of seems like there’s been malign there,” Vellayan Subbiah, Executive Chairman, CIFCL, told analysts in the call.
To questions on whether the company saw this as “a hit job,” Subbiah refused to speculate, but said he wanted the regulators to look into it. “Given the erroneous reporting, there is scope for libel, so we will engage with legal advisors who will help us in terms of taking action against this agency,” he added. Allegations such as understatement of GNPA disclosures are a “blanket statement” and “very speculative,” Subbiah said.
No guidance revision
Subbiah reassured investors on the NBFC’s asset quality and liquidity position, and said there is no revision in its guidance provided in the past.
High cash deposits, instances of related-party transactions and high fees for credit rating were among key allegations of Cobrapost, and CIFCL in an exchange filing on Tuesday also addressed each of these. Its shares rallied 8 per cent before settling with 6 per cent increase after the clarification.
Some of the alleged recipients identified by Cobrapost include Cholamandalam MS General Insurance Co Ltd (CMGICL), Chola Business Services Ltd (CBSL), and Murugappa Management Services (MMS).
To a question on company’s plans to change the corporate structure to avoid such allegations, Subbiah said they have already done that. “So the role of MMS has been pared down only to do group corporate communication and other tasks from FY22 onwards…Actually, over the last three years, payouts to MMS has reduced to less than ₹1 crore per annum,” he added. CIFCL CFO Arul Selvan explained that such activities have now been taken by the individual group companies themselves.
CIFCL said that large cash deposits arise from its borrower profile, which consists of small road transport operators and self-employed individuals in rural and semi-urban areas. “The cash collections, which used to be 50 per cent (of total collections) some time ago has come down to 15 per cent now,” the management said, adding that these are deposited into banks and are subject to audits and controls.
On related-party transactions, it said the dealings are fully disclosed in financial statements and carried out at arms’ length.
In the analyst call, CIFCL executives noted that MMS was incorporated as a company to provide consulting and review services to all the 29 businesses of the Murugappa Group. “MMS was staffed with professionals in the area of finance, HR, strategy, PR, IT,” Subbiah said, adding that it has been a “standard mechanism of operation” and MMS works on a no-profit model.
Similarly, premium on policies for borrowers’ accident and hospitalisation is collected from them and paid to its insurance subsidiary CMSGICL.
With regards to CBSL, CIFCL said it is a common practice by the financial services industry to outsource feet on the street to an outsourcing company. “We have started to reduce the volume of people engaged through CBSL, but it is a process that will take time,” the management said to analysts.
The company further clarified that payments to rating agencies are standard industry practice and lower than the industry average. Corporate social responsibility spends, another allegation raised, is carried out through monitored work contracts as mandated by law.
Published on December 23, 2025