M&M Finance shares plunge 8% as fraud prompts NBFC to defer Q4 results

Shares of Mahindra & Mahindra Financial Services Ltd (M&M Finance) plunged 8 per cent in Tuesday's trade as the NBFC deferred its March quarter earnings that were otherwise scheduled for later in the day. The decision came as a fraud was detected at one of M&M Finance's branches in the North East, which fraud involved forgery of KYC documents, leading to embezzlement of company funds. M&M said the hit would unlikely exceed Rs 150 crore.

Following the development, the stock fell 7.88 per cent to hit a low of Rs 256.85 on BSE. With this, the scrip has fallen 3.43 per cent year-to-date.

"The investigations in the matter are at an advanced stage. The company estimates that the financial impact of this fraud is unlikely to exceed Rs 150 crore. Investigations are underway, and necessary corrective actions have been identified and are at various stages of implementation, including arrest of few persons involved. Submission as required under Regulation 30 of Securities Exchange and Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been made separately," M&M Finance said.

M&M Finance said the agenda matters pertaining to approval of the audited standalone and consolidated financial results, recommendation of dividend, AGM and related matters, which were to be considered at the board meeting scheduled to be held on April 23, were being deferred to a later date, in view of the latest development.

It said the NBFC would intimate the earnings date in due course. "The Audit Committee and the Board Meeting scheduled on 23rd April, 2024 will consider all other matters scheduled to be discussed at the respective meetings, including increase in aggregate borrowing limits and fund raise via issue of Non-convertible debentures. Consequent to above, the trading window which was closed for the purpose of point no. 1 of the caption shall continue to remain closed till 48 hours after the announcement of the audited standalone and consolidated financial results, and the annual earnings conference call is also being deferred," it said.