Repco Says CBI Raids At Officials’ Homes Won’t Have Material Impact On Company
Repco dropped 7% after CBI raided homes of top management officials on corruption charges.
Repco Home Finance Ltd. pared losses after the company said the searches conducted at the houses of senior officials by the Central Bureau of Investigation won’t have any have material impact on its operations.
The CBI conducted searches “at the residences of Managing Director R Varadarajan, Executive Director V Raghu, and former Chief Manager Kannan, with regard to waiver of preclosure charges on October 8, 2016,” the government owned company clarified in a filing to the stock exchanges.
The CBI has filed a case of corruption, cheating and conspiracy against senior Repco officials and two persons from a partnership firm based in Coimbatore, according to a Press Trust of India report.
Repco officials allegedly favoured the Coimbatore based firm by waiving off Rs 24.31 lakh penalty related to a Rs 3.7 crore loan that had turned into a non-performing asset, PTI reported citing a CBI statement. The officials also waived off pre-closure charges of Rs 22.64 lakh for another loan account, PTI added.
Repco Denies Violation Of Rules
In a letter included as part of the stock exchange filing, R Varadarajan, the managing director of Repco Home Finance clarified to the company chairman that only an administrative fee was waived by the authority.
There was no waiver of processing fee and an amount of Rs 6 lakh (1 percent of the loan amount) was collected and only administrative fee was waived by the competent authority as per the scheme.R Varadarajan, Managing Director, Repco Home Finance, said in a statement
He also added that a pre-payment penalty was not collected as per the guidelines of the National Housing Bank.
The said loan accounts were serviced regularly for nearly 20 months. Thereafter, in view of availability of lesser rate of interest, the borrowers switched over to another bank. At that time of switchover the entire loan amount with upto date interest was collected. There was not a waiver of principal or interest. However, pre-payment penalty was not collected at the request of the borrowers as per the NHB guildelines in this regard. I strongly believe there is no violation of any rule.R Varadarajan, Managing Director, Repco Home Finance
Shares of Repco Home Finance closed 5.62 percent lower at Rs 777.8 per scrip. The stock had fallen as much as 7.2 percent to Rs 760 in early Monday trading.