Spandana Sphoorty Financial said to be under RBI lens
The Spandana board on Wednesday appointed chief financial officer Ashish Kumar Damani as the interim chief executive of the company. Saxena will continue to assist the company for the next three months to ensure a smooth transition.
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KOLKATA: The Reserve Bank of India may have found lapses in the operations of microfinance company Spandana Sphoorty Financial , which announced an abrupt top management rejig earlier this week, two people aware of developments alleged.The two events may be related, they said.During a nearly three-week-long inspection conducted sometime during October-November last year, RBI unearthed unreported frauds from the ground and was annoyed with the top management for this lapse, they alleged.The people cited said the regulator found mismatch in reported cash balances in several branches and is scrutinising the management role in it."I have resigned on personal accord to pursue opportunities outside. All cash has been accounted for," outgoing managing director Shalabh Saxena told ET. He tendered his resignation on Wednesday.The Spandana board on Wednesday appointed chief financial officer Ashish Kumar Damani as the interim chief executive of the company. Saxena will continue to assist the company for the next three months to ensure a smooth transition."Normally, RBI completes routine inspection in 3-4 days. But the inspection team spent 19 days scrutinising the company's functioning," one of the persons cited above said.RBI did not respond to ET's queries on the matter.One of the persons said the regulator recently had meetings with independent directors of the company. Responding to that, Saxena said no meeting was held by RBI exclusively with independent directors."I have been nurturing this thought of pursuing opportunities outside the company and I believe the time is now," Saxena had said in his resignation letter.The company's share price jumped 4.3% Thursday to ?318.25 on BSE a day after his resignation, even as the Sensex fell 0.4%. It is still about a third of the 52-week high ?935.Spandana has been under severe asset quality stress like many of its peers and reported consecutive net losses for the second and third quarters. It reported a consolidated net loss of Rs 440 crore for the third quarter and a net loss of Rs 216 crore in the preceding quarter. Its gross non-performing assets ratio rose to 5.2% as of December 2024 from 1.7% as of March 2024.Following the third quarter loss, the lender announced a covenant breach in respect of Rs 373 crore of non-convertible debentures and Rs 268 crore of term loans.
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