Vellayan Subbiah, Executive Chairman of Cholamandalam Investment & Finance Company
Company executives acknowledged in a specially convened analyst call on Tuesday that they have already begun reorganizing the company’s structure and related-party arrangements to simplify it.
“Many of the facts (in the blog post) have been distorted and selectively presented; they have adopted standard industry practice and presented them in a manner that suggests malice,” Vellayan Subbiah, executive chairman of CIFCL, told analysts on the call.
When asked about whether the company saw this as “a hit,” Subbiah declined to speculate but said he wanted regulators to look into it. “Given the erroneous reporting, there is scope for defamation, so we will engage legal advisors who will assist us in taking action against this body,” he added. Allegations such as understatement of GNPA revelations are a “blanket statement” and “highly speculative,” Subbiah said.
No revision of the guidelines
Reassuring investors about the asset quality and liquidity position of the NBFC, Subbiah said there is no revision to the guidance provided in the past.
High cash deposits, cases of related party transactions and high credit rating charges were some of the main allegations Cobrapostand CIFCL also discussed each of these in an exchange filing on Tuesday. Shares rose 8 percent before reaching a 6 percent gain 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).
When asked about the company’s plans to change its corporate structure to avoid such allegations, Subbiah said they have already done so. “So the role of MMS is only limited to group communication and other tasks from FY22 onwards. In fact, disbursements to MMS have been reduced to less than ₹ 1 crore per annum in the last three years,” he added. CIFCL CFO Arul Selvan explained that such activities have now been taken over by the individual group companies themselves.
CIFCL said large cash deposits come from its borrower profile, which consists of small road transport operators and self-employed people in rural and semi-urban areas. “Cash collections, which were 50 percent (of total collections) some time ago, have now come down to 15 percent,” the management said, adding that these are deposited with banks and are subject to audits and controls.
Regarding related party transactions, it said the transactions are fully disclosed in the financial statements and are conducted on arm’s length terms.
In the analyst call, CIFCL executives noted that MMS was set up as a company to provide advisory and appraisal services to all 29 companies of the Murugappa Group. “MMS was staffed with professionals from finance, HR, strategy, PR and IT,” Subbiah said, adding that it was a “standard operating mechanism” and that MMS operates on a not-for-profit model.
Similarly, the premium on accident and hospitalization policies of the borrower is collected and paid to its insurance subsidiary CMSGICL.
Regarding CBSL, CIFCL said it is common practice in the financial sector to outsource to an outsourcing company. “We have started reducing the number of people involved through CBSL, but it is a process that will take time,” management told analysts.
The company further clarified that payments to rating agencies are standard industry practice and are lower than the industry average. Another claim made is that corporate social responsibility expenditure is made through controlled employment contracts, as prescribed by law.
Published on December 23, 2025
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