Cholamandalam Loan Fraud Exposed: SIT Uncovers ₹7.5 Crore Property Scam.

Cholamandalam Loan Fraud

• Sprouts SIT Exposes Scam Involving Gifted Properties

• Fraudulent Sales Uncovered

• Same Office Sold to Multiple Buyers

Unmesh Gujarathi
Sprouts News Exclusive
Contact: +91 9322755098

In an exclusive investigation, Sprouts News Special Investigation Team (SIT) leader and Editor-in-Chief Unmesh Gujarathi has uncovered a major financial scam. The probe reveals Cholamandalam Finance sanctioned a ₹7.5 crore loan against illegally gifted properties from a tainted builder, exposing severe due diligence lapses and fraudulent sales practices.

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Whistleblower Alleges ₹7.5 Crore Loan Fraud at Cholamandalam Finance, Flags “Gifted” Collateral and Builder Scam

In a shocking revelation that raises serious questions about corporate governance and lending due diligence, has exposed a potential ₹7.5 crore loan scam involving Cholamandalam Investment and Finance Company Ltd. and a tainted builder. The Buyers has written to the company’s Nodal Officer and the RBI, alleging that massive loans were sanctioned against properties that were illegally gifted and fraudulently resold.

This special investigation by the Sprouts News SIT delves into the serious allegations of procedural lapses and financial misrepresentation that threaten to undermine the integrity of the lending process.

Cholamandalam Loan Fraud: A Loan Sanctioned Without Basic Due Diligence

According to the buyers Cholamandalam sanctioned loans totaling ₹7.5 crore against commercial offices in a project by Sudhanshu Infrastructure Private Limited (SIPL). The loans were granted to the company’s directors, Abhayjeet Sakalnarayan Dubey and Pinky Abhayjeet Dubey. Alarmingly, the Sprouts News SIT investigation into the matter highlights that this approval was granted without standard legal scrutiny or a proper property inspection.

The collateral offered was part of an under-construction project lacking an Occupation Certificate (OC) and approved floor plans. Sanctioning a substantial loan against such an non-compliant asset represents a significant failure in risk assessment and internal compliance protocols expected from a premier NBFC.

The “Gifted” Property Scam: A Red Flag Ignored

The core of the alleged fraud lies in how the directors acquired the property used as collateral. The offices were not purchased but were “gifted” to them by their own company,Sudhanshu Infrastructure Pvt Ltd (SIPL), through gift deeds. Specifically, Office No. 603 was gifted to Mrs. Pinky Abhayjeet Dubey, while Offices No. 604 and 607 were gifted to Mr. Abhayjeet Sakalnarayan Dubey.

This practice, as identified by our Sprouts News Special Investigation Team, is a major red flag. Legal experts confirm that a private limited company cannot gift immovable property to its directors without rigorous formal compliance, including independent valuation, board resolutions, and shareholder approvals. This act is potentially unlawful and could be a method to misrepresent the company’s financial health and create artificial collateral to secure loans.

Fraudulent Misrepresentation and Multiple Sales Exposed

The plot thickens with evidence of outright fraud. Buyers complaint provides a smoking gun: Sudhanshu Infrastructure Pvt Ltd (SIPL) has allegedly engaged in renumbering and reselling the same office spaces to multiple investors and Buyers simultaneously. For instance, offices originally numbered, alloted and sold 102, 104 and renumbered as 103, same way office no 611, 612, and 613 were later renumbered as 607 and sold to other Buyers and Investors..

Crucially, Buyers & Investors purchased from Sudhanshu Infrastructure Pvt Ltd (SIPL). This makes them a direct victim of this fraudulent misrepresentation and confirms the deliberate, duplicitous documentation employed by the builder I.e. Mr. Abhayjeet Sakalnarayan Dubey . This discovery points to a sophisticated scam far beyond a simple due diligence lapse.

Builder Under Legal Scrutiny, Lender at Major Risk

The risks for Cholamandalam are compounded by the profile of the borrower. The buyers notes that multiple FIRs are already registered against Abhayjeet Dubey, and proceedings under the MRTP Act are ongoing. The strong possibility of the builder heading toward financial default puts the NBFC at a high risk of a significant loan default and severe reputational damage.

Formal Demands for Accountability and Action

In light of these grave irregularities, Buyers have formally demanded that Cholamandalam immediately investigate the loan sanctioning process, provide a justification for the approval, reassess the legality of accepting gifted properties as collateral, and initiate internal accountability measures. They have also escalated the matter to the Reserve Bank of India (RBI), underscoring its implications for public interest and financial integrity.

The ball is now in Cholamandalam’s court to address these serious allegations with transparency. This case serves as a critical reminder for financial institutions to fortify their lending frameworks against such sophisticated attempts to bypass rules and regulations.

While Cholamandalam Investment and Finance Company Ltd. (Chola Finance) is a respected name in the Indian NBFC sector, it has faced its share of controversies and challenges. Here is an overview of notable ones beyond the recent alleged scam.

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1. Allegations of Predatory Lending and Aggressive Recovery Practices

This is one of the most persistent criticisms faced by many NBFCs, including Chola Finance.

Issue: There have been numerous customer complaints across forums like the RBI’s Sachet portal and consumer sites alleging high-pressure sales tactics, hidden charges, and unclear loan terms. The most serious allegations concern aggressive recovery practices after a default, with borrowers claiming harassment from recovery agents.

• Outcome: The company maintains that it follows all RBI guidelines. However, such complaints persist and are a significant reputational risk in the retail lending space.

2. The DHFL Exposure and Default Risk

Chola Finance was exposed to the massive Dewan Housing Finance Corporation Ltd. (DHFL) scam and subsequent collapse.

Issue: As a lender and investor, Cholamandalam had a significant exposure to DHFL bonds. The default and eventual bankruptcy of DHFL posed a substantial risk of financial loss.

Outcome: The company had to make provisions for the potential loss. The resolution process under the Insolvency and Bankruptcy Code (IBC) eventually provided a recovery plan, but the episode highlighted the risks of corporate debt investments.

3. Internal Control Lapses and Regulatory Observations

Like any large financial institution, Chola Finance has faced regulatory scrutiny over internal controls.

Issue: In the past, the Reserve Bank of India (RBI) has, through its annual inspections, pointed out lapses in areas like asset classification, compliance with KYC (Know Your Customer) norms, and reporting discrepancies.

Outcome: The company has consistently stated that it takes regulatory observations seriously and takes corrective measures to strengthen its internal audit and control mechanisms. These are typically seen as part of the regulatory process rather than major scandals.

4. Vehicle Repossession Disputes

As a major player in vehicle financing, disputes over repossession are common.

Issue: Customers have occasionally alleged that vehicles were repossessed unfairly or without following due procedure, even for minor payment delays. Legal battles have ensued over the transparency of the repossession process and the valuation of the repossessed asset.

Outcome: These cases are often settled legally or through arbitration, but they contribute to the public perception of aggressive recovery tactics.

5. Data Privacy and Security Concerns

In the digital age, data security is a critical concern for all financial institutions.

Issue: While not a single major breach, the company, by virtue of holding vast amounts of customer data, is perpetually at risk. There have been isolated incidents or customer complaints regarding unsolicited calls, leading to concerns about how customer data is shared with third-party marketing agencies.

Outcome: Chola Finance states it has a robust data privacy policy compliant with regulations. However, this remains an area of ongoing vigilance for all lenders.

For a large NBFC like Cholamandalam, managing operational, credit, and reputational risks is a constant challenge. While it has a generally stable track record, these controversies reflect the inherent tensions in the high-growth, competitive retail lending industry in India. The recent allegations, if proven true, would represent one of the most serious governance challenges the company has faced.