Kochi, October 11: The Enforcement Directorate (ED) on Thursday questioned Muthoot Group Managing Director George Alexander Muthoot in connection with a probe into alleged money laundering and investor fraud. The interrogation took place at the ED’s Kochi office, according to sources cited by PTI.
PMLA Case Based on Multiple FIRs
The Kochi zonal unit of the ED launched an investigation under the Prevention of Money Laundering Act (PMLA) based on several First Information Reports (FIRs) filed by the Kerala Police.
These FIRs stem from complaints alleging that certain Muthoot Finance branch managers misled investors about various investment schemes.
As per the complaints, customers were “lured” into investing in fixed deposits (FDs) and non-convertible debentures (NCDs) promising 8–12% returns. However, the accused managers allegedly diverted funds to Srei Equipment Finance Limited, which they misrepresented as a Muthoot Group sister concern.
This misrepresentation reportedly resulted in non-repayment of investments upon maturity, leading investors to claim they were cheated of their funds.
ED Records Statement of Muthoot MD
Sources confirmed that George Alexander Muthoot was summoned to depose before the agency, where his statement was formally recorded. The ED continues to probe the money trail and the extent of managerial oversight in the transactions now under examination.
RBI Imposes Penalty on Muthoot FinCorp
In a separate regulatory action, the Reserve Bank of India (RBI) imposed a ₹2.7 lakh penalty on Muthoot FinCorp on September 26 for non-compliance with Internal Ombudsman norms.
The RBI’s inspection (as of March 31, 2024) revealed that the company failed to establish an automated system to escalate complaints—either partially or wholly rejected by its internal grievance redressal system—to the Internal Ombudsman.
The central bank clarified that the penalty pertained to procedural deficiencies and did not question the validity of any transaction or agreement between Muthoot FinCorp and its customers.
