Muthoot Finance's Insurance Arm Sees Fraud By CEO, Ex-Employee
The amount of misappropriation is Rs 11.92 crore for the period from April 2023 to November 2024.
Muthoot Insurance Brokers Pvt., a wholly owned subsidiary of Muthoot Finance Ltd., said it was impacted by a fraud committed by its chief executive officer presently under suspension and an ex-employee of the parent firm.
The fraud entailed the misappropriation of rewards in the form of gift cards received from insurance companies, meant for distribution to employees, the company said in a stock exchange filing late Wednesday.
CEO Thomas P Rajan and Ranjit Kumar Ramachandran, former chief general manager of business performance (South) at Muthoot Finance, are said to be involved in the fraud.
The amount of misappropriation is Rs 11.92 crore for the period from April 2023 to November 2024.
"There is no accounting loss to Muthoot Insurance Brokers as these amounts were meant for distribution to employees, who canvassed business, as rewards for their performance," the filing said. However, the notional loss of revenue is Rs 31.28 crore, based on the estimated additional business generated, had the misappropriated rewards been distributed to employees, it said.
An FIR has been registered based on the complaint filed by Muthoot Insurance Brokers.
Muthoot Finance is the largest gold loan NBFC in the country. It also offers additional services such as money transfer, digital, cashless, housing finance, vehicle loans, money transfer, mutual funds, and microfinance.
Muthoot Insurance Brokers is the insurance arm of the Muthoot Group. In fiscal 2024, the company had a turnover of Rs 13.88 crore and a profit of Rs 4.2 crore.
