IIFL Finance has taken several corrective measures to clean up its act after the Reserve Bank of India issued orders for it to stop offering gold loans. A plan to raise money was disclosed by the non-bank lender, who also announced changes to its board and management to improve governance and compliance.
The non-banking financial business has filed at the exchange on Wednesday, stating that it has clearance from the board to fund ₹1,500 crore through a rights issue. The NBFC also intends to issue 500 crore worth of non-convertible debentures in order to raise financing.
Fairfax India, the company’s largest shareholder with a 15.1% interest, pledged last week to spend $200 million on liquidity support in an effort to increase confidence among investors and other stakeholders.
In the course of its investigation, RBI also discovered that IIFL Finance had not followed the established auction procedure, had exceeded allowed cash collections, and that the company’s fees were opaque.
“We wish to make it unequivocally clear that there are no governance or ethical issues,” stated Nirmal Jain, managing director in a telephonic conversation with analysts previous week. “These are operational issues that will be addressed with all our effort and sincerity. We are taking immediate and comprehensive steps to address all concerns made by RBI.”
