Cobrapost: Public-Funded Loan Firm Routed ₹100 Billion to Insiders Without Disclosure

Disguised Payouts Allegedly Shown as Work Contracts, Professional Fees in Company Filings

December 24, 2025

An investigation by the journalism organisation Cobrapost has alleged that a large, publicly listed finance company, which gives out loans using money borrowed from banks, financial institutions and everyday investors, carried out transactions worth over 100 billion rupees (₹10,000 crore) that appear to benefit family members and senior executives, with many of these deals not properly disclosed as related-party transactions.

Cobrapost claims that the transactions involved a network of companies, primarily Cholamandalam Investment and Finance Company Ltd. (CIFCL) and other Murugappa Group firms, including Chola Business Services Ltd. (CBSL), Cholamandalam MS General Insurance Co. Ltd. (CMGICL), and Murugappa Management Services.

These companies operate using money borrowed from banks, financial institutions, and investors, including funds drawn from people’s savings, mutual funds, pension accounts, and insurance. If large sums are secretly diverted to benefit insiders, the money that was meant for lending or investment is put at risk. When such practices go unchecked, the losses can fall on banks backed by public funds or on small investors who trusted the company’s financial reports. In serious cases, this kind of mismanagement can spread across the financial system, affecting access to loans, raising borrowing costs, or shaking the stability of institutions people depend on.

According to Cobrapost, CIFCL alone is reported to have diverted about 64 billion (6,419 crore) rupees to CBSL and related entities since 2015. CMGICL, meanwhile, routed payments of around 30 billion (3,040 crore) rupees to group firms since 2017, often recorded under vague categories such as professional fees and work contracts. Murugappa Management Services, a privately held promoter entity, is alleged to have received 6.7 billion (675 crore) rupees from 17 group companies over eight years and passed most of it on to individual family members and senior executives.

Cobrapost reports that out of the 100 billion (10,000 crore) rupees in transactions it examined, only about 21 billion (2,161 crore) rupees was disclosed as related-party transactions, even though such disclosures are required under the Companies Act, SEBI’s LODR rules and Indian Accounting Standards. The beneficiaries include prominent Murugappa family members such as Ravichandran V, who received over 550 million (55 crore) rupees, MM Venkatachalam, who received 440 million (44 crore) rupees, and MM Murugappan, who received 425.3 million (42.53 crore) rupees, as well as senior executives like Ramesh KB Menon, who was paid 540 million (54 crore) rupees, the report claims.

The report suggests that several regulators who are supposed to keep watch may have missed warning signs. These include SEBI, which oversees listed companies; the Ministry of Corporate Affairs, which checks if company filings follow the law; and the Institute of Chartered Accountants, which sets the rules for how companies report their finances. It also raises concerns about the insurance regulator, IRDAI, and whether it looked closely enough at how the company was earning commissions. Even credit rating agencies, which are meant to alert investors if a company’s finances are risky, gave high ratings while being paid large fees by the same company.

Cholamandalam’s official response, issued via an unsigned exchange filing, insists that all disclosures have been complete and that the transactions were in line with industry norms. The company denied any wrongdoing, claimed the allegations were malicious, and accused the media outlet of attempting to tarnish its image.

It further asserted that its financials remained strong, that its board-approved business plan remained unchanged, and that payments to rating agencies and key executives were lawful and industry-standard. This was followed by a rise in its share price, with investors appearing to discount the allegations, for now.

The company’s statement does not respond to the main issues raised in the investigation.

It doesn’t explain why only a small share of the money transfers were officially reported, even though the rules require full disclosure when funds move between connected people or companies. The disclosures matter because they allow investors, banks and regulators to know whether a company is dealing fairly or secretly moving money to insiders.

The company also doesn’t say why most of the payments to Murugappa family-run firms were labelled as professional fees or work contracts, or why the religious groups Isha Foundation and Isha Leadership Academy, and some clubs received money that was shown in the records as regular business expenses.

Without clear answers, there’s no way to know whether the money was used for legitimate business purposes or for private gain.

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