Manappuram Finance Limited (531213) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the conference call to discuss the recent development at Manappuram Finance hosted by Motilal Oswal Financial Services Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Abhijit Tibrewal from Motilal Oswal Financial Services Limited. Thank you, and over to you, sir.

Thank you, Lizan. Good afternoon, everyone. Thanks for dialing in to this conference call. We have assembled here today to discuss the recent developments at Manappuram Finance. The company has already put out a press release earlier today to explain the recent developments. We have with us today the senior management team from Manappuram Finance represented by Mr. VP Nandakumar, Managing Director; Dr. Sumitha Jayasankar, Executive Director; and Ms. Bindu A. L., Chief Financial Officer. So without taking any more of your time, let me now invite Mr. VP Nandakumar for his opening remarks, post which we will open up the floor to take the questions from the participants on this call. Thank you, and over to you, sir.

So thank you, Motilal Oswal for arranging this investors call at a very short notice for investors and bankers. Good evening. First of all, let me place on record my sincere gratitude and appreciation to each one of you for your continued trust and patronage towards Manappuram Finance. Some of you may have learned about the unfortunate events of the last few days through the media. As you know, a team from the Enforcement Directorate, Kochi, visited our office on Wednesday and Thursday of this week. Examined certain documents and recorded my statement as well as that of certain numbers of the staff. At the end of operations, they came up with an order freezing some of my assets, [ perpetually ] under PMLA of 2002. This was an unfair and arbitrary act to put it mildly. I'll shortly explain well. This morning, I wrote a letter to the Board of Directors of Manappuram Finance Limited about this issue since I felt I need to clarify the different aspects. We convened this meeting because I felt it is equally vital that I keep you all in the loop. First of all, it is more than a decade-old case that was settled once and for all. Secondly, the action admittedly by the officials in the order has nothing to do with Manappuram Finance Limited, but now default Manappuram Agro Farms Limited, of which and the sole proprietor. I started Manappuram Agro Farms, an agriculture firm because agriculture used to be one of the primary occupations for the people of Valapad. In short, this Manappuram Agro Farms is called Magro. Magro used to accept deposits and pay interest on the good faith that it was completely legal to do so. After getting a legal opinion from a few eminent lawyers. As on February 2012, the total quantum of deposits outstanding in Magro was INR [ 143.85 ] crores. However, based on the directive from RBI, we not only stopped taking further deposits, but also informed to the public that we would be retaining every rupee that we have collected with interest due to that. And we have communicated this through mass media like newspapers -- leading newspapers, both in English and Malayalam. In fact, I sold my shares in the company to raise an amount of INR 159 crores to repay all the depositors, an amount of rupees INR 34,56, [ 34,56,35,131 ] was paid by cheques or repaid by cheques between February 1, 2012 and March 15, 2012 to those who came forward to claim their money, the unclaimed balance of deposits as on March 17, 2012, along with the accumulated interest, was INR [ 119,18, 33,132 ]. This was deposited in an Escrow linked account with Punjab National Bank. All subsequent repayments to the depositors were made out of this Escrow account and RBI was periodically informed about the progress. In its latest inspection report, the Apex Bank had acknowledged that as of September 30, 2022, only INR 9, 29, 0000 was the outstanding. The balance outstanding only because of certain depositors have failed to claim their respective deposits. We have sent to them a repeated letters, not only then, several times, the demand transfer issued in their favor and sent by register post, but all these remain -- all returned unclaimed. That is the situation. RBI, SEBI and Registrar of companies have separately conducted inquiries and nothing was found a miss. I understand that ED visit was in connection with a malicious complaint filed by an individual who happened to be the same complainant, who made the complaint 10 years back about the same issue of deposits that have already been returned, who [indiscernible] ill will against me and family. That too more than 10 years later, I have moved to the high court to get the FIR post, and I'm confident that [indiscernible]. Meanwhile, myself as well as the staff of Manappuram are fully cooperating with the Enforcement Directorate as we are confident that there was no wrongdoing of any claim. We have complete faith in the laws of the land and the compliance of the policy and guidelines of the regulators is the top most priority of Manappuram Finance. So I would be happy to clarify your doubts and answer your questions. So what I want to highlight here, again, and so this is not related to Manappuram Finance Limited at all, but it is related to the promoter, VP Nandakumar, that is myself. So this is an issue which was settled long back. It is 2011, '12, yes, that this issue was settled. And so the same individual has approached through ED now. And I feel like the -- whereas the overdue is -- that has to be not overdue, the unclaimed deposit is only INR 9 lakhs. And that also parked in an Escrow account. It is -- there is no sense in freezing that our advocates are confident about getting the relief at earliest. Thank you.

Sir, should we open up for questions?

Sure.

[Operator Instructions] The first question is from the line of Dhaval from DSP.

Thanks for the opportunity and all the clarification till now. I just had 2 follow-up questions to get a better understanding of the past and the current situation. So first one is relating to the usage of the funds which were collected by Magro. So you mentioned that you had to sell a stake for repaying the depositors. I just wonder what was the usage of the funds, the INR 143.85 crores and money before that? And did you get that money back in your personal capacity? And how did you use that? So that's the first question about usage of funds. And the second question that I had was, there were some reports yesterday around INR 50-odd crores were being cash repaid to these depositors with KYC traceability, et cetera. So if you could just clarify about whether RBI or other regulatory bodies were able to trace the depositors? And if there is any lapse around KYC or any such points? And what was the cash repayment? If you could clarify that, that would be very useful.

Okay. Thank you, Dhaval. So the Manappuram Agro Farms is a proprietary concern owned by me. The purpose of the firm is promoting agriculture, that's the purpose. So the money collected through deposits have been used for purchasing land for agriculture, et cetera. And -- but that was the major investment -- major use of these funds and other agricultural operations. Second thing is a INR 50 crores cash repayment from this INR 159 crores totally along with interest. So yes, this cash payment, all are below INR 20,000. Out of this total INR 159 crores, INR 50 crores, that is along with interest. INR 50 crores is paid by cash, all are below INR 20,000. So these have done in full compliance with the rules of the land. The second thing is about KYC. So these are deposits accepted mostly prior to 2010 -- 2010, this is 12, 13 years back. So this is a proprietary concern of having the -- and this is not regulated. So we used to comply with the income tax rules, income tax act, about INR 20,000 only by both acceptance and repayments only by cheque, [ post ] cheque. So the -- about this thing, so all the details -- full details of all the payments made, both by cash and cheque. The details including their door number, place, phone number. All these are available with us. So even for the small amounts, there may not be full KYC compliance as of today. But the full name, address, amount, phone number, everything is available because there is no compliance of any regulation that was not a regulator NGT. And there was no need of any compliance. It was the -- also the full address, all the vouchers, everything is available about the deposits of each, discharge the deposits of each, full address, name, et cetera. Everything is available. Why INR 50 crores cash? These are small, small deposits of INR 20,000 and less than INR 20,000, that is the payment is made. That is the reason why that we have made the cash repayment. The rest of all are by above -- all above -- the payment was above INR 20,000 and made in cheque only.

Right. Sir, just one follow-up, if I may. Is -- are the agri land -- you said that majority of the money went into purchase of agri land, is the land -- still there are many of the -- many of these actually...

All the land are still there. Nothing has been sold out. Everything is available now. Even though after that firm has been wound down, that Manappuram Agro Farms as a proprietary concern is no longer existing. Yes. And these are -- now these are in a company name called Manappuram Agro Farms Limited. Yes. And all these are remaining in the new -- at the name of new company called Manappuram Agro Farms Limited. That company is no longer accepting any deposits. As and when RBI has asked us throughout to stop accepting deposits, and renew that, we have not done anything, that's not -- governance issued that. As I mentioned, these are the issue. This is a complaint based by one individual 13 years back. And the same -- this is the one and the same person who is raising the complaint about the same issue even now.

Sir, just one last data point, if I may. Is on the interest rate that you were offering on those fixed deposit, if you could give that percentage? Blended also is fine, just for context...

It was around -- somewhere around 10%.

The next question is from the line of Avinash Singh from Emkay Global.

My question is more on the previous [indiscernible]. I mean, unlike other lending business here the -- that assets underlying the loan is with the lending company, and that's why the trust has a different kind of role as far as in your gold loan businesses concern, you need to happen. Now you explained nicely that, okay, how this is unrelated to Manappuram Finance and how -- why this case is not [indiscernible]. But my question was that, okay, do you see some kind of [indiscernible] affecting your business here or what? I mean, so do you see this to have any impact as far as your business operations are concerned, particularly when some trust in the minds of borrowers, depositing gold with you or not? So what kind of -- sort of impact do you see at this point in terms of as far as the business operations are concerned?

So first of all, I reiterate that there are no governance issues. So something happened at 12 years, 13 years back, the complaint is on that only. There are no governance issues now. Second is the trust factor of most customers. See, our business of gold lending or any other lending, these businesses are not affected by this issue at all. In fact, those customers are mostly from a rural background and also from bottom of the pyramid and lower to the class. They are not interested in this case et cetera, what they look at is, how fast the service delivery and whether it is affordable to them. These are general situation about our customers who are borrowing against jewelry and other modes of lending. Okay, so you said that business is largely unaffected, okay. Thank you.

[Operator Instructions] The next question is from the line of Kushan Parikh from Morgan Stanley.

Am I audible?

Yes, yes.

Yes. So I just wanted to understand the development from the perspective of Manappuram Finance, the company. So I have 3 questions. Mainly, first is on the funding part, I mean, I just wanted to understand if this place is any constraints or any restrictions in -- of getting tax funds incrementally for our business -- regular business. And I mean, what has been -- I mean, the reaction or the feedback, if any, if you have got from the lenders on these developments? I mean, are they still comfortable to continue their lending to the company for the business or not? Second is on the day-to-day operations and the branch functioning and the branch expansion that we are doing in our MFI subsidiary, I mean does this order place any pause on any of that or any restrictions that may come on these day-to-day operations and functioning of the company? And just I'll just squeeze in one third last question. I mean, the article that came in yesterday spoke about key executives also being investigated under this development and just wanted to understand, I mean, as the investigation would be ongoing, would they continue to be able to participate or I mean be involved in the daily activities and execution at the company?

So I will answer one after the other. So one is the funding part. We have communicated with the whole of our major lenders. These are the issue, these are the issue, et cetera, et cetera. So we have a long association, so the funding will not get restricted with some news, et cetera, et cetera. They have been explained about, yes, why this happened, et cetera. And as usual, if anything, is that we used to call a lenders' meet in Mumbai, bankers meet in Mumbai, lending bankers. And we used to do that. Now also, we will plan that. We have not received any frantic inquiry from any of these. Even proactively, we have communicated with them. This is the issue, this is the issue, et cetera. The second thing is the development of the business, how it is going to be affected. I don't think it will be affected because, RBI we have immediately communicated lenders. We have proactively communicated with what has happened. And the third is to cost this case because -- we have immediately encased the lawyers, the top lawyers in the country. And they are very hopeful by next week, we'll obtain a stay both in continuing this investigation, by the agency. And two, to release whatever has been frozen now. So they are really confident. And we are moving in the Kerala High Court on Monday, next Monday. And the case will come for hearing on Tuesday. And our legal counsels are very confident about getting a stay on both these whatever I have told, the continuing investigations. And second, whatever is frozen, released, et cetera. So that's one part. And once that is done, that also will be communicated. So -- and when these are done, it is our experience. What is most important is the proactive communication with our stakeholders that we are doing, and we don't expect anything negative in this regard.

The next question is from the line of Bhavyesh Divecha from HDFC Asset Management Company Limited.

I just had one simple book keeping questions for Manappuram Finance. What is the current level of cash that we have maintained? And what is the liability like over next 2, 3 months to 6 months period from Manappuram Finance?

See, we are always maintaining sufficient liquidity to meet any crisis. So that has been maintained. The effect quantum -- I have not taken the periods right now. But always sufficient liquidity is maintained in the form of deposits and limit et cetera. We have the very large undrawn limit, and we have communicated. And we don't expect any serious issue because the issue of Manappuram Agro Farms on -- which is from 2013 -- way back in 2012 is not -- is fully know to all our stakeholders, lenders as well as the regulators. When they understand that the same person is creating problem et cetera, et cetera. And when they are briefed about -- they are explained about the background, et cetera, et cetera. They understand that. So we don't expect any serious issue with regard to ALM.

Yes. To give the exact numbers, so for the month of May, majority will be working capital demand rollover and INR 100 crore NCD repayment. So we are having almost nearly INR 1,000 crores liquidity with this and undraw lines of INR 3,300 crores, which will support enough for the repayments and growth.

Okay. Sure. Just a broad repayment putting quantum over the next 3 months?

Next 3 months, it will be INR 3,500 crores. Majority will be working capital rollover to leverage on the pricing we used to avail the loans for 90 days. So this will be due for rollover.

The next question is from the line of Piran Engineer from CLSA.

Just a follow-up. Has there been any communication or inquiries with the -- like from the RBI right now? Have they asked for any clarification, data, any files?

See, any news in the public media, the local RBI office seeks for clarification. This is the routine thing. In this case...

Anything specifically that you have...

They have sorted our clarification, so we have explained to them in detail and they appreciate our timely action.

Okay. And sir, if you could just maybe spend some time on like what other businesses do you own and run outside of Manappuram Finance?

First of all -- I own -- that is already disclosed in my disclosure. I own Manappuram Jewellers Limited. So the Manappuram Agro Farms Limited, Manappuram Healthcare Limited, the Manappuram Asset Finance Limited, et cetera. These are all disclosed.

The next question is from the line of Pratik Chheda from Guardian Capital Partners.

You mentioned in the start of the call that -- any deposits that you have accepted were in compliance with all the rules and regulation. Then what was the reason for RBI issuing a directive for repaying the loans at that point in time? Why did RBI come back and say that please repay the loans, the deposits I mean?

See, the RBI thought it is -- but the regulated entities would governance standards. They would have thought -- any promoter-owned entity accepting public deposits may not be a part of good governance. So it was there, at least at the company to stop accepting any public deposits or [indiscernible] deposits. So we sought their advise accordingly. So we repaid all the deposits in full by transferring whatever is the balance at that point of time, transferred all the amount along with interest to an Escrow account. From that all these are paid except some INR 9 lacks, as I mentioned, where the customers are not traceable. So that also is lying in that account. From 2012 onwards, this company, which is -- which has not accepted any public deposits. Other than this INR 9 lakhs, there are no deposits left.

Sure. And in the past, you've mentioned that we have been still allotting nord RBI to expand branches and one of the reasons for not getting that nord is that we're not -- there's some compliance issues in terms of KYC or repayment of some deposits. Is this issue has anything -- had anything to do with the branch expansion requirement that RBI -- we are getting from Manappuram Finance?

No, no, I have not told like that. What I have told is -- there is some surplus in auction -- see these all new gold loans -- just like any other lender -- we sell this through public auction in the presence of a publication auctioneer, that's the process. And after adjusting whatever is due to us, the surplus money is transferred to an Escrow account with the bank. And from that -- our payments are made to the borrowers who -- whose ornaments were auctioned. So we were not able to find out some customers. And for the last 15 years, some money is getting accrued for [indiscernible] these customer's present address. So RBI wanted to proactively find out and return their amount. So we have taken many initiatives and that is coming down.

Okay. And just one last question. You mentioned that INR 140 crores of your personal assets have been seized. Could you just give us some color on what are the types of assets that have been seized here? And is there any promoter shareholding that have been placed under any kind of restrictions from the ED?

See, this INR 143 crores are deposits outstanding in 2012 which all of that, along with the interest repaid to the respective customers by cheque and the small amounts below INR 20,000 all are returned by cash also. Of which the details of the customers, their address, their phone numbers, the amount returned everything is there as per records. So -- and majority of this amount also returned through the Escrow account.

[Operator Instructions] The next question is from the line of V.P Rajesh from Banyan Capital.

So my question was somewhat similar to what the earlier participant asked that INR 140 crore worth of assets [ that our business trying to do ] Is any of your shareholding in the public company? Is that also part of that INR 140 crores, can you just clarify that?

No, no. See, the entire amount that's been repaid except that INR 9 lakhs, which is landing in the Escrow account. From that amount, whatever was outstanding on that day of repayment, nothing has come back to any of our companies through investments.

Okay. So my other question is -- if -- you just explained that you have [indiscernible] post release attachment at that point? Or how will it work?

So I couldn't hear you. There is some interruption in your voice.

Okay. So let me repeat. I assuming that be safe on the... [Technical Difficulty].

[Operator Instructions] We now have the lines of the management reconnected. Over to you, sir. Mr. Rajesh, may we request you to repeat your question.

What I was asking -- what I was asking is that assuming we get the stay in the high court, what happens to the assets that have been attached by ED? Will they be released back to you? Or how will that work?

Yes. See the -- first of all -- the amount outstanding in that particular account is not as alleged, [ INR 149 ] or something. It is only INR 9 lakhs. It is only INR 9 lakh that also is in Escrow account. And the FIR was simultaneously registered with the police station. That was -- that is already referred by the police. And there is plenty of ground. And this is 13 years, et cetera, I had a discussion, and they are -- our lawyers are really confident under that. But Tuesday, we can get a stay for 2 things. One for releasing whatever is frozen. It is not a seizure it is frozen only, frozen means they can defreeze -- the same people can defreeze also, right that they do -- we do certain things. What we want to do, these are all shared with them already. So we are moving to high court to tell that this case has been already taken up and cost -- whether high court -- on previous occasions, there is -- this is just a reputation. And this order from the high court was inquired by ED was without taking that into consideration that our advocates will do, and they are very confident about getting a stay on the execution of this order. And also, for restraining, whether ED from any further inquiry into this matter. Literally whatever is the frozen accounts, will be released.

The next question is from the line of Yash Jain from CNBC TV18.

I have a couple of questions to ask in this particular matter. The first one is I just want to understand from you till the time the investigation is on, in that case, let's say, if high court assuming keeps the investigation on. Do you think you should sort of move away from your current position at Manappuram Finance to avoid any conflict of interest? Do you think that will be very important as the first step till the time the investigation is on? That is my first question. And the second question that I'm asking you, is the Enforcement Directorate in its investigation has also stated that the deposits which were raised were sort of laundered towards immovable properties and used in buying shares of Manappuram Finance itself. Straight away, if you had to answer this particular allegation from the Enforcement Directorate, was any part of the deposits which were raised put in any immovable properties or shares of Manappuram Finance? Yes or no? If you could answer that question.

This is a very good case according to our legal advisers, our lawyers. So next week itself, we'll be able to get the first order of -- yes -- for [indiscernible] this case. From the -- other investigation and also get a stay, then it will continue after the stay till it crossed. So it will get cost, and I don't -- as this is not a new issue. This is something like an old issue -- yes, which has happened 13 years back. So getting that relief from the court may not be difficult. This is what our legal counsels are very confident about. So I don't think there is a need of any change in between. The second is money accepted. The majority of this is being used for the purchase of land or property only for agriculture purposes. And as when this cost -- the issue is the cost in the court of law, there is no need to go into the other details. And I don't think -- yes, I have invested money in -- for buying [indiscernible] shares of Manappuram Finance.

Just a clarification, you don't think or are you sure that the allegation is completely false from ED? I have not invested anything in shares? And I've not...

No, you see that question doesn't arise because all the money, all the money are repaid. All the money are repaid, when the full amount along with the interest is repaid, where is the question?

The next question is from the line of Rishikesh Oza from RoboCapital.

Just one question from my side. Is there or can there be any intervention from RBI?

See, as I mentioned earlier, whenever there is any adverse news the concerned department seek our clarification. In this case also, they have sought our clarification on certain things, which we have immediately promptly replied.

The next question is from the line of Sai Naveen from Point.

Yes, I would like to please understand. It was mentioned in the ED report that a lot of money, which was redirected and bought properties in the names of your family? Is there any comments on that, sir?

This is what I have already explained in the previous -- to the previous caller. See, these are mostly used for purchasing land for agricultural purpose and also for agriculture. That is the major use of that. That is the purpose of that. Yes, that business -- so that has been actually used for that business only. And the second part is now the money along with the interest is fully repaid. So that question doesn't arise now. When the money is fully repaid -- and when there is no liability, whatever is the INR 9 lakhs pending, that also is in the Escrow account. Where is this question because it's a lot of standard of this question?

The next question is from the line of Shreepal Doshi from Equirus Capital.

Sir, my question was pertaining to the depositors. So how many depositors were there under this Magro -- Magro entity depositors raised funds for INR 150 crores?

See, there was -- see they are all small deposits from the rural market of where our headquarters is located at Valapad. So there are a few thousands of customers. The number -- actual number, I don't know. But their name, address, phone number, how the repayments are made, how the money is collected, everything is already there on our records.

Okay. And sir, were the deposits being taken at the Manappuram branch or some other set up was there?

Yes. That was the issue -- yes, that was the issue raised by the regulators also. After that, it has been -- Manappuram Finance Limited has been fully ring-fenced under the -- over site of KPMG and Cyril Amarchand Mangaldas, et cetera, is fully ring-fenced. So this has happened in 2012 -- early 2012, yes, but a lot of changes have come after that.

Got it. Sir, last question, like as you said that majority of the money, like almost all of the money has been repaid just INR 9 lakhs outstanding, those INR 9 lakhs. Do we -- would we be having acknowledgment from all depositors that they have received the money back?

Yes.

Okay. For all of the INR 50 crores exposure that also?

Yes, all the -- other than -- after this total along with the interest was around INR 159 crores. Out of that over INR 100 crores is paid through bank account only. Some INR 50 crores plus -- INR 50 crores has been repaid in cash. And the -- to whom it is repaid, the same depositor everything is there. All the deposit receipts are retained by us, fully discharged having -- as a token of receipt of the money that the depositor has signed and discharged the deposit receipt, everything is there, and these are regularly shared with the details -- regularly shared to the inspection team conducting RBI inspection as and when these are called for.

The next question is from the line of Dev from Haitong Securities.

My question was more related towards any kind of related party transactions between Magro and Manappuram Finance for which Manappuram could be held liable? Or did it stand as a guarantor? Or any kind of way that it can come back to Manappuram Finance? Can it be made liable in any of these deposits?

No allegation support related party has been made by anybody so far. There's no related party. Even the investigators here have not highlighted that. Absolutely, there is no -- that deposits and Manappuram Finance Limited, there is no connection.

The next question is from the line of Vijay Anand from Karur Vysya Bank.

Sir, just when you are briefing initially, you told that from 17th March 2012, post-something March 2012, you have about INR 119 crores deposited with Escrow account. I just wanted to understand what is the mode of operating of this account. Why am I asking this? Is there any party apart from you who are -- means -- whose authorization is required to access the funds? I just wanted to understand that, sir.

So these are part in Escrow account. Whatever is needed for the repayment, these are withdrawn. And these are audited -- regularly audited by the auditors and the payments are made as per the rules of the land. And so the authorized persons, who are authorized to withdraw the money in this behalf, they do that. And there are full trails with this regard.

So that means that INR 50 crores which have been paid by cash has been withdrawn from the Escrow account in cash and paid to the respective depositors. Is that right, sir?

Yes, yes. These are small accounts. And the sales for payment. So as in the bank, the deposits seems to discharge the et cetera, et cetera. And the full name under of all the customers are kept in the records.

The next question is from the line of Raghav Madhavan from Vivriti Asset Management.

So I have 2 questions. So the first one is, Mr. Nandakumar, you mentioned that to repay the public deposits you have raised shares. And again, the proprietorship was converted into Magro Farms Private Limited, which is also owned by you. So just checking if -- and these lands were also -- you're continuing to hold these lands? We want to understand if these lands were held at personal capacity or are these land part of this new entity, which was formed after 2012. That is first question. And second, I want to understand the PR impact this could have on Manappuram Finance itself and how that can trickle down to Asirvad given the relationship Manappuram strongly has commitments towards Asirvad Microfinance.

See, as I told -- all the money has been repaid along with interest by selling shares, et cetera, et cetera. The mode of repayment and the source of money everything has been disclosed to everybody. So this Manappuram Agro Farms proprietary firm has been owned. So it is -- already owned up, already owned up. So a new company was formed after that. Yes. And the properties are mostly in that company. And the second part of the question, released effect Manappuram Finance Limited. You see why should you just think, this is not an old -- this is not a new case. It's a case pertaining to an issue which happened 13 years back, 12 years back. So nothing new. There are no governance issue at all. The same person approach the ED and they have conducted investigation. And as I told earlier, our legal counsels are very confident about caution that case in the high court. The FIR filed along with that is also be referred by the police. So it is cost. So the -- whatever action -- may need this cost -- there is -- why should affect the business of Manappuram Finance Limited. If that doesn't affect Manappuram Finance Limited, it's borrowing ability or anything so then why should this affect the subsidiary of Manappuram Finance Limited. Even now, there is no allegation against Manappuram Finance. So it is a very well capitalized company. So it can support its subsidiaries also as and when it is required. Then why should somebody worry about that the companies will be affected. I think that worry is baseless.

I understood, sir. Just a follow-up question. Given the current existing Magro Farms Private Limited, there are [indiscernible] and I think about [ INR 217 or INR 21.7 crores and odd ] I am just checking if any of these are related to Manappuram Finance Limited or related subsidiaries given the fact the network is of negative intensity.

See, the -- that company has no -- Manappuram Agro Farms Limited has no public borrowing. It has no public borrowing. It has borrowing only from the shareholders. That is me. It has no public borrowing. And there's no related party now. Manappuram Finance more is very conservative in this regard to uphold the corporate governance standards. So there's no inter mingling. And there is no intercorporate borrowing amongst the group companies.

The next question is from the line of Mithun Aswath from Kivah Advisors.

Yes, thanks for your clarification but if we just see that -- I think the ED has also tweeted. They have mentioned that the searches happened in 6 premises of Manappuram Finance and its Managing Director on the allegations of money laundering from illegal collection of deposits. Why do they specified Manappuram Finance and not Magro, sir? Which you speak about it? So I just wanted to understand that, why are they bringing Manappuram Finance into the matter if it is not related to Manappuram Finance?

So they would have thought that, yes, I am in the -- sitting in Manappuram Finance. So in this connection, they would have searched my office, that is Manappuram Finance office. Other than that, there is no significance. And also some of the senior executives there, they wanted to understand whether there is any connection between Manappuram Agro Farms old as well as Manappuram Agro Farms and Manappuram Finance, et cetera. They have investigated that, it's a part of investigation, and they have not alleged any irregularity or anything connected with Manappuram Finance Limited. Just a part of their investigation, they investigated my office as well as senior executives of Manappuram Finance Limited. It's a part of investigation only. And I don't think there is any significance and they have not found anything. Nothing is there in their report also, not any mentioned about any irregularity in Manappuram Finance Limited.

Also, you mentioned all the deposits which were raised were repaid. Have the depositors claimed all the money back?

Sorry?

All the depositors' money, which was raised, have all the depositors claimed all the money back? Or is there a reasonable amount of money lying in that Escrow?

It is INR 9 lakhs. That also we have taken all the steps as per the direction from RBI not only once from time to time to find out this, we have to send these INR 9 lakhs deposits also by demand draft. And this also have been returning unclaimed from time to time. See, even in the banks where the full KYC everything is taken, there are unclaimed deposits where the customer cannot be faced. If you look into that, this is a similar percentage only.

Got it. And just wanted to get a sense, has RBI likely to make any sort of announcement for -- regarding Manappuram Finance? Or you don't see anything should affect your lending or your business because of this?

Here, Manappuram Finance has not been mentioned as a party at all. It is about an incident which anybody can understand. And RBI has already taken a stand on this particular issue of Magro deposits where 10 years back and they have been constantly monitoring this. So nothing is new other than this ED investigation. So on the base of ED investigation also as per regulator, they may ask for some clarifications, which we can easily clarify. We don't have any problem because they are already aware about the matter and have been monitoring this continuously for the last 10 years. Nothing is new. So I don't expect anything because these are known to them fully.

Sir, one last one. Is it possible that ED has provided you some order regarding this Magro? So because the problem is there's quite a lot of miscommunication because your press release talks about that, while the ED continues to mention Manappuram Finance. So is there can be some sort of clarification where you have something in writing from the ED, which is mentioning what order that they are talking about. That would be of immense clarity for the investment community.

They have not alleged anything wrong in Manappuram Finance Limited. They have not made any allegations. Then why should I seek clarifications from them? They had not mentioned, they have not found out anything in Manappuram Finance. They have only mentioned about Manappuram Agro Farms only. And so -- and Manappuram Agro Farms also, we are very confident about crossing this case. Yes. very soon. And so they have not mentioned anything wrong in Manappuram Finance. Why there is the need of seeking any clarifications from them?

Thank you. Ladies and gentlemen, this would be the last question for today, which is from the line of [ Manan ], an Individual Investor.

Sir, I would just like to ask that since you're confident that the next week your legal team would be able to make a stay...

I'm sorry to interrupt, sir, but your voice is not clear. I would request to use your handset, please.

Hello.

Yes.

So I would just like to ask that since the legal team is confident about getting a stay on this order by next week, so how does this work? Does the defreezing of assets happen in a week or so, like does it take it a few times for the counterparty to reverse their actions?

See, our advocates, I had discussed with our legal counsels and discuss the whole of matter, different aspects, et cetera. And they are fully confident about that in a week's time.

And let's say, it doesn't -- ED doesn't move it our way or the high court doesn't move it our way so early, what would be your next line of action or how would you expect it to move forward?

See, what is the role of ED and RBI? ED is an investigating and see -- and they investigate and report. And whatever is the investigation, if the investigation report is not satisfactory to the affected parties they have the only option of approaching the court of law. And we are doing that.

As that was the last question for today, I would now like to hand the conference over to the management for closing comments. Over to you, sir.

So thank you. There were several interesting questions and I hope that I have clarified your questions and doubts, et cetera, et cetera. So any more clarifications needed in this regard, I'll be very happy to be -- to talk to you separately also. And for the progress of the case in the court of law that would be intimated to you through the public media from time to time. Thank you so much.

Thank you, sir. On behalf of Motilal Oswal Financial Services Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your lines.