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What is the story about?
Shares of IIFL Finance Ltd. fell 15% on Thursday despite strong quarterly results. This is after an Income Tax Department order, which asked the company to get its accounts audited for a specified period, which is from financial year 2019 to financial year 2025.
However, IIFL Group founder Nirmal Jain called the concerns "a complete misunderstanding."
In an interaction with CNBC-TV18 after the stock price fall, Jain said that Section 142 (A) is for complex accounts and that the Income Tax Department order is procedural.
"There's nothing unusual about it. And in terms of the block assessment period, I think we have done the reassessment, and there's 1.2 or 1.3 crore rupees of tax has been paid. But other than that, I think anything is speculation, because the special audit, if you read 142 a talks about accounts for inventory valuations, which are complex," Jain said.
Jain also went on to add that the company's compliance is now fully to the satisfaction of the Reserve Bank if India, stating that the action is procedural since the RBI report has a mention of the cash transactions.
"There was a finding which RBI has, and that is the finding on which income tax is also investigating. And you know, when they did the search, we gave them the entire data, which was basically the data backup. It took three days time. We have such enormous amount of data. But as far as we are concerned, we are, as a company, we are 100% confident that there's no extra, no further liability we expect on this account," Jain said.
The IIFL Group head also spoke about the Housing Finance business going public, to which he said that it could even be done through the demerger route and not necessarily an IPO, but a decision has not yet been reached on the same. He also said that expression of interest from Private Equity players stating that when there is something which is synergistic and is valued from a long-term perspective, they would take it to the board and shareholders but for now, there's nothing on the table.
Shares of IIFL Finance ended 15.2% lower on Thursday at ₹528.5. The stock is up 37% in the last one year.
However, IIFL Group founder Nirmal Jain called the concerns "a complete misunderstanding."
In an interaction with CNBC-TV18 after the stock price fall, Jain said that Section 142 (A) is for complex accounts and that the Income Tax Department order is procedural.
"There's nothing unusual about it. And in terms of the block assessment period, I think we have done the reassessment, and there's 1.2 or 1.3 crore rupees of tax has been paid. But other than that, I think anything is speculation, because the special audit, if you read 142 a talks about accounts for inventory valuations, which are complex," Jain said.
Jain also went on to add that the company's compliance is now fully to the satisfaction of the Reserve Bank if India, stating that the action is procedural since the RBI report has a mention of the cash transactions.
"There was a finding which RBI has, and that is the finding on which income tax is also investigating. And you know, when they did the search, we gave them the entire data, which was basically the data backup. It took three days time. We have such enormous amount of data. But as far as we are concerned, we are, as a company, we are 100% confident that there's no extra, no further liability we expect on this account," Jain said.
The IIFL Group head also spoke about the Housing Finance business going public, to which he said that it could even be done through the demerger route and not necessarily an IPO, but a decision has not yet been reached on the same. He also said that expression of interest from Private Equity players stating that when there is something which is synergistic and is valued from a long-term perspective, they would take it to the board and shareholders but for now, there's nothing on the table.
Shares of IIFL Finance ended 15.2% lower on Thursday at ₹528.5. The stock is up 37% in the last one year.
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