The new management in Spandana has also appointed an independent agency to investigate the issues related to IT system And the operations of Chris Financial – a subsidiary of Gold Loans, indicate that wrongdoing is suspected.
Kedar, who owns 45% of Spandana, invites Reddy to join Spandana. board meeting Even after discussing these issues on Monday, his resignation was accepted immediately on 2 November. Reddy, however, did not attend the meeting, people familiar with the matter said.
“After going through the agenda and having some discussion with the people of Spandana and Kedara, I realized that Kedara was planning to manipulate the information… I felt I had to put forth the facts related to these two points We must so that Kedara does not share the tampering information and give false information to all of you to hide your misunderstandings and also use this as an opportunity to defame me,” Reddy said before the start of the board meeting. Clarifying its stand on the matter, said in a letter to the lenders.
Following the said meeting, Spandana informed the stock exchanges that its Board has taken note of the transfer of IT systems and its management of the Company to a third party by the former Managing Director without the knowledge of the Board.
“Shortly before her resignation, Ms. Reddy transferred the company’s IT systems to a new IT vendor and outsourced its management to that vendor… there has also been good progress on creating a parallel IT environment,” It said in a media statement.
In his letter to the lenders, Reddy mentioned that Spandana terminated the contract with the company’s previous IT vendor on suspicion of misconduct.
Spandana also raised concerns over the functioning of certain gold loan branches of Chris Financial, which were apparently managed by a third party. “Certain possible concerns have been brought to the notice of the Board with respect to certain gold loan branches of Chris Financial Limited, a subsidiary of Spandana. It is currently in the process of verifying the status of the same,” the company said.
Spandana Mutual Benefit Trust (SMBT), an entity formed in 2003, had been managing the disbursements and repayment collections since the last week of October, when Chris’ business head left with his team just before Reddy’s resignation. Reddy told ET that SMBT collected the repayment and deposited it in the bank account of Chris Financial. Chris Financial has a portfolio of Rs 74 crore.
Meanwhile, the Spandana board has approved the appointment of Shalabh Saxena as Managing Director and Chief Executive Officer for a period of five years from the date of appointment. It has also approved the appointment of Ashish Damani as Chief Financial Officer. Both Saxena and Damani are currently working with India Financial Inclusion.
Spandana said its collection efficiency stood at 97% for the entire September quarter and 99% for the month. The lender said that with adequate liquidity and cash equivalents of around Rs 1,300 crore, and additional sanctions of over Rs 1,000 crore, it is ready to meet all its debt obligations.
Earlier, Reddy had alleged that he was forced to resign from his institution following a disagreement with Kedara over the pricing of the proposed sale to Axis Bank.
In a letter earlier in the month she explained the circumstances under which she had to resign, alleging that Kedara wanted to sell Spandana at 1.6x book value multiple, which according to her is a “short sale” gross.