Muthoot Group MD Questioned By ED In Kochi Branch Managers PMLA Case
The Kochi zonal unit of the ED has initiated a probe under the Prevention of Money Laundering Act (PMLA), drawing from multiple First Information Reports (FIRs) filed by the Kerala Police.
- ED questioned Muthoot Group MD over money laundering allegations.
- Probe stems from FIRs regarding misrepresented investment schemes.
- Investors reportedly lost funds after managers diverted deposits.
The Enforcement Directorate (ED) on Thursday questioned Muthoot Group Managing Director George Alexander Muthoot in connection with an investigation into alleged money laundering and investor fraud. The questioning took place at the agency’s Kochi office, according to sources cited by PTI.
PMLA Case Based on Multiple FIRs
The Kochi zonal unit of the ED has initiated a probe under the Prevention of Money Laundering Act (PMLA), drawing from multiple First Information Reports (FIRs) filed by the Kerala Police. These FIRs followed complaints that certain Muthoot Finance branch managers had allegedly misrepresented investment schemes to customers.
According to the complaints, investors were “lured” into placing funds in fixed deposits (FDs) and non-convertible debentures (NCDs) with the promise of 8–12 per cent returns. The accused branch managers allegedly diverted these funds to Srei Equipment Finance Limited, which they purportedly misrepresented as a sister concern of the Muthoot Group.
The alleged misrepresentation led to non-repayment of investments on maturity, with complainants claiming they were cheated of their funds.
ED Records Statement of Muthoot MD
Sources told PTI that the ED summoned George Alexander Muthoot to depose in the case, where his statement was formally recorded. The investigation remains ongoing, with the agency expected to continue examining the flow of funds and the extent of managerial oversight in the transactions under scrutiny.
RBI Imposes Penalty on Muthoot FinCorp
In a separate development, the Reserve Bank of India (RBI) imposed a monetary penalty of ₹2.7 lakh on Muthoot FinCorp on September 26 for non-compliance with norms related to the appointment and functioning of an Internal Ombudsman.
The RBI said the penalty followed a statutory inspection conducted as of March 31, 2024. The company was found to have failed to establish an automated system to escalate complaints—either partially or wholly rejected by its internal grievance mechanism—to the Internal Ombudsman.
The central bank clarified that the penalty was based on regulatory deficiencies and did not call into question the validity of any transaction or agreement between Muthoot FinCorp and its customers.
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