Cobrapost, in a recent investigative report, has leveled significant allegations against Cholamandalam Investment & Finance Company (CIFCL) and Cholamandalam MS General Insurance Company Limited (CMGICL), prompting a strong denial from the Murugappa Group entity. The investigation claims to have uncovered transactions worth nearly ₹10,262 crore between related parties, family members, and key management within CIFCL, with some portions allegedly routed through additional transactions that demand regulatory scrutiny.

The report further claims that CIFCL made substantial cash deposits, totaling nearly ₹25,089 crore, across 14 banks between fiscal years 2019-20 and 2024-25. Additionally, Cobrapost alleged that the NBFC earned an insurance commission of ₹942 crore between 2024 and 2025, raising questions about whether the company is engaging in bundling insurance with vehicle loans—a practice prohibited by regulatory bodies like IRDAI.

Five specific allegations were highlighted by Cobrapost. Firstly, it was alleged that Cholamandalam MS General Insurance Company Limited (CMGICL) diverted funds amounting to ₹3,040 crore to nine Murugappa Group companies. These transactions, recorded under heads such as “insurance commission, work contracts, and professional fees,” were reportedly revealed in the company's disclosures. Secondly, the investigation identified transactions nearing ₹1,578 crore with various Murugappa Group entities, including approximately ₹1,036 crore paid as professional fees to nine related parties.

Thirdly, Cobrapost's report expressed concerns that the concentration and disclosure of these transactions raise questions regarding their impact on stakeholders, particularly minority shareholders and joint venture partners. Fourthly, filings reportedly showed that CMGICL disclosed related-party transactions of about ₹116 crore, but additional identified transactions were not included in these disclosures. Lastly, CIFCL's filings reportedly showed payments of over ₹1,654 crore for work contracts with more than a dozen Murugappa Group entities, yet these transactions were allegedly not reflected as related-party transactions in the company's official filings.

In response, Cholamandalam Investment and Finance Company issued an exchange filing, unequivocally dismissing all allegations made by Cobrapost as “malicious” and “baseless,” urging the public to avoid market speculation. The company also sought to reassure its investors, stating in a BSE filing that its asset quality and liquidity position remain robust, as confirmed by audited financial statements for the July-September quarter ending FY2025-26.

Regarding the large cash deposits, Cholamandalam clarified that it serves over 50 lakh small road transport operators and self-employed non-professionals across 1,700 branches. These borrowers often earn and make EMI payments in cash, which are then deposited into banks. The company emphasized that this collection process and the amounts involved have undergone internal and external scrutiny. Concerning related-party transactions, Cholamandalam asserted its compliance with all legal and accounting norms, stating that these transactions are fully and completely disclosed in its financial statements. It further explained that payments to entities like CBSL and Murugappa Management Services are for essential services such as manpower, strategic services, IT, and temporary working capital needs.

The company also refuted claims of individuals benefiting improperly from transactions, affirming that all payments to Board members, Key Managerial Personnel (KMP), and Senior Management Personnel (SMP) of CIFCL have been made in compliance with applicable law and fully disclosed to shareholders. Addressing allegations about payments to rating agencies, Cholamandalam noted that higher borrowing figures in certain years necessitated more ratings, leading to increased rating costs. Finally, the company clarified that its CSR contributions were made to NGOs/implementation agencies as work contracts, which are mandated by law.