Mahindra & Mahindra Financial Services Ltd. discovered a fraud of 150 crore rupees ($18 million) at one of its branches in the northeast India.

The fraud involved forgery of KYC documents related to the retail vehicle loans disbursed by the non-bank lender, leading to embezzlement of the company funds, M&M Financial said in a stock exchange announcement.

The fraud was detected at the end of the fourth quarter of the financial year ended 31 March 2024. As a result, M&M Financial delayed releasing its 4Q and FY24 results.

The company said the investigations in the matter, which has been reported to the Reserve Bank of India’s central fraud monitoring cell, are at an advanced stage. The financial impact of the fraud is unlikely to exceed 150 crore rupees, it added.

M&M Financial said area business manager and other employees of the concerned branch in the northeast region were involved in the fraud, and a few persons have been arrested.

Investigations are underway, and necessary corrective actions have been identified and are at various stages of implementation, according to the statement.

Separately, M&M Financial said it board was scheduled to meet today (23 April) to consider and approve the results for the fourth quarter and financial year ended 31 March 2024, recommendation of dividend and other matters.

Due the fraud matter, the meeting has been deferred to a later date, which will be intimated in due course, it added.

Shares of M&M Financial fell 5.4% to 263.75 rupees on India’s National Stock Exchange in Mumbai afternoon trading today.

Note: $1 = 83.3931 Indian rupees

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