5 allegations Cobrapost made against Cholamandalam and what the company said in clarification

In its latest research report, Cobrapost has reported that non-banking finance company (NBFC) Cholamandalam Investment and Finance Company (CIFCL) has almost ₹There were 10.262 billion transactions between related parties, family members and senior executives.

The report claimed that investigations revealed that certain parts of the transactions were allegedly routed through additional transactions requiring regulatory review.

They claimed that CIFCL had deposited almost Rs 200 million in cash. ₹25,089 crore in 14 banks between 2019-20 and 2024-25. Cobrapost also claimed that NBFC earned an underwriting commission as follows: ₹942 crore between 2024 and 2025.

“Since a significant portion of CIFCL’s revenues are generated from vehicle and home financing, the question arises as to whether the company bundles insurance along with vehicle loans, a practice banned by regulatory bodies such as IRDAI,” the Cobrapost report said.

5 Cobrapost allegations against Cholamandalam

1. Cobrapost alleged that Cholamandalam MS General Insurance Company Limited (CMGICL) diverted funds worth ₹3,040 crore to nine Murugappa Group companies.

The report states that as a result of the investigation, it was revealed that the company’s statements claimed that these transactions were recorded under headings such as “insurance commission, employment contracts, professional fees”.

2. The report also states that, according to the records examined within the scope of the investigation, approximately ₹1,578 crore was reported in several Murugappa Group entities; allegedly almost ₹1,036 crore as professional fees paid to nine related parties.

3. The Cobrapost report also claimed that the concentration and disclosure of these transactions raises questions about their impact on stakeholders, including minority shareholders and joint venture partners.

4. The filings reportedly show that Cholamandalam MS General Insurance disclosed almost $200 million in related party transactions. ₹116 crore, while additional transactions identified were not presented as part of the disclosures.

5. The Cobrapost report also noted that CIFCL files reported payments of more than 100 amounts. ₹1,654 crore in the form of employment contracts with more than a dozen Murugappa Group entities. However, it is claimed that these transactions are not reflected as related party transactions in the company’s records.

What did Cholamandalam say?

However, Cholamandalam Investment and Finance Company, in its latest stock exchange filing, said that all the allegations made by Cobrapost are ‘malicious’ and ‘baseless’ and people should refrain from market speculation until the various allegations are investigated.

“All of the allegations are baseless, expressed in bad faith and malicious intent,” the company said in its exchange filing.

Description of Cholamandalam

In its BSE filing, Cholamandalam Investment and Finance Company assured its investors that the company’s asset quality and liquidity position continues to be strong as of the audited financial statements for the July-September quarter ending financial year 2025-26.

• Large cash deposit: The firm caters to the needs of over 50 lakh small road transport operators and self-employed non-professionals across 1,700 branches, the company said.

  “Such borrowers earn and pay in cash, including the EMIs they receive from us. The amounts collected in cash are deposited in Banks. This collection process and the amount have been subject to internal and external scrutiny,” Cholamandalam said in the exchange filing.

• Related party transactions: The company explained that the firm complies with legal and accounting norms and related party transactions are fully and completely disclosed in the financial statements.

  The company also said related party transactions related to payments to entities such as CBSL, Murugappa Management Services and others were used for manpower, strategic services, IT and temporary working capital needs.

• Beneficiaries: Cholamandalam also said the company denies allegations against specific individuals who benefited from the transactions.

  “All payments made to the directors, KMP and SMP of CIFCL were made in accordance with applicable laws and fully disclosed to the shareholders of the company,” the company said in its BSE filing.

• Payment to rating agencies: The company noted that these allegations were that payments were made to rating agencies for years. They also said that in some years the company’s borrowing figures were higher, so more ratings were requested and “higher rating costs” had to be paid to these rating companies.
• CSR Payments: The company disclosed that it makes CSR contributions to relevant NGOs/implementing organizations through employment contracts. They also said that these CSR payments are required by law.

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