The new management at Spandana has also hired an independent agency to probe into issues concerning the IT system and operations of Criss Financial – the gold loan subsidiary, hinting that there is a suspicion of wrongdoings.
Kedaara, the 45% owner of Spandana, invited Reddy to attend Spandana’s board meeting on Monday to discuss these issues even after her resignation on November 2 was accepted immediately. Reddy however did not attend the meeting, people familiar with the matter said.
“After going through the agenda and having some discussions with people from Spandana and Kedaara, I realized that Kedaara was planning to manipulate information… I felt that I should put forth the facts pertaining to these two points so that Kedaara doesn’t share manipulated information and misinform all of you to cover up their misgivings and also use it as an opportunity to malign me,” Reddy said in a letter to lenders, explaining her stance on the matter, before the start of board meeting.
After the said meeting, Spandana informed the stock exchanges that its board has noted the transfer of the company’s IT systems and its management to a third party by the former managing director without the knowledge of the board.
“Shortly prior to her resignation, Ms Reddy had transferred the company’s IT systems to a new IT vendor and outsourced its management to that vendor… to ensure a smooth transition and business continuity, Spandana is taking steps to engage with this new vendor appropriately and has also made good progress on creating a parallel IT environment,” it said in a media statement.
In her letter to lenders, Reddy mentioned that Spandana discontinued the contract with the company’s previous IT vendor suspecting misconduct.
Spandana also raised concerns over the functioning of certain gold loan branches of Criss Financial, which apparently was managed by a third party. “Some potential concerns have been brought to the board’s notice regarding certain gold loan branches of Spandana’s subsidiary, Criss Financial Limited. It is currently in the process of confirming the status of the same,” the company said.
The Spandana Mutual Benefit Trust (SMBT), an entity created in 2003, was managing the disbursement and repayment collection since last week of October, after the business head of Criss left with his team just prior to Reddy’s resignation. SMBT collected repayment and deposited it in Criss Financial’s bank account, Reddy told ET. Criss Financial has a portfolio of Rs 74 crore.
Meanwhile, Spandana board has approved the appointment of Shalabh Saxena as managing director and chief executive officer for a period of five years with effect from the date of joining. It has also approved the appointment of Ashish Damani as the chief financial officer. Both Saxena and Damani are currently working with Bharat Financial Inclusion.
Spandana said that its collection efficiency was 97% for the entire September quarter and 99% for the month. The lender said that with sufficient liquidity and cash equivalents of about Rs 1,300 crore, and additional undrawn sanctions of over Rs 1,000 crore, it is ready to meet all its debt obligations.
Earlier, Reddy alleged that she was forced to resign from the entity she founded following disagreement with Kedaara on the pricing of the proposed sale to Axis Bank.
In a tell-all letter earlier in the month describing under what circumstances she had to resign, she alleged that Kedaara wanted to sell Spandana at 1.6x book value multiple, which according to her is gross “under-selling.
