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CFO, three others allege fraud at Sambandh Finserve

The Trade Book 14 Oct 15

Bandhan Bank has a Rs 4 crore loan exposure to the company, managing director Chandra Shekhar Ghosh told ET.


Kolkata: Odisha-based microlender Sambandh Finserve is at the centre of a controversy after some of its key officials alerted the company’s board members about a purported fraud by the executive management. The company is also said to have defaulted its payment to lenders.

The whistleblowers said that the management has inflated the company’s assets under management through fictitious loans and also diverted funds to other entities.

The board has immediately ordered a forensic audit, two people familiar with the matter told ET. “We wish to bring to your kind notice that there are serious irregularities in the conduct/functioning of management of Sambandh Finserve Pvt Ltd,” four officials jointly wrote in a letter to board members on October 7. “The actual portfolio as assets under management is approximately Rs 140 crore as against the reported figure of Rs 391 crore as on September 2020. The reported AUM is inflated and non-existent,” they said, adding that “the above was under the instructions of MD & CEO Deepak Kindo.” Kindo could not be contacted despite several calls and text messages. The letter was signed by chief financial officer James Raj, accounts head Felix Xess, MIS head Budhnath Oram and internal audit head Elias Lugun. “We do not have sufficient liquidity to service our debt obligations and have defaulted in repayment since September 30,” said the letter. ET has reviewed a copy of the letter. According to a chief executive of another Odisha-based microfinance firm, it’s a matter of internal conflict. The letter mentioned about pilferage of the cash withdrawn for disbursement by the CEO who allegedly diverted the funds to other entities — namely Diya Dairy & Agroprocessors Pvt Ltd, Kshama Foundation, Regional Rural Development Centre, DK Enterprises, Utkal Dairy and other unknown establishments. Brickwork Ratings has downgraded the company’s various debt instruments and bank loan facilities to junk. “The rating downgrade is on account of delay in meeting repayment obligations since October 1 as per the feedback received from one of its lenders,” it said. According to the rating report, as many as 34 lenders have offered loan limits of Rs 350 crore to Sambandh. Bandhan Bank has a Rs 4 crore loan exposure to the company, managing director Chandra Shekhar Ghosh told ET. Among other key lenders to Sambandh Finserve are State Bank of India, Small Industries Development Bank of India, Axis Bank, ICICI Bank, Canara Bank, IDBI Bank and YES Bank.

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