Nandakumar challenged the complaint by filing Criminal miscellaneous case No.4436/2022 to quash all further proceedings pursuant to FIR.376/2022 of Valapad Police station, Thrissur district.

After final hearing of both parties on case No.4436/2022, the High Court of Kerala quashed the FIR 376/2022 of Valapad Police Station, Thrissur District.

In May, the Enforcement Directorate (ED) conducted searches in Thrissur, Kerala, at six locations connected to Manappuram Finance and its managing director, V P Nandakumar. As a result of the investigation into allegations of money laundering through illegal collection of deposits from the public, the ED froze assets worth Rs 143 crore belonging to V P Nandakumar. The frozen assets include eight bank accounts, investments in listed shares, shares of Manappuram Finance, and 60 immovable properties. Additionally, the ED seized various incriminating documents related to money laundering and property documents during the search for further investigation.

Meanwhile, the Reserve Bank of India (RBI) has, by an order dated 12 June 2023, imposed a monetary penalty of Rs 20 lakh on Manappuram Finance, Thrissur for non-compliance with certain provisions of the “Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016”.

This action is based on the deficiencies in regulatory compliance and is not intended to pronounce upon the validity of any transaction or agreement entered into by the company with its customers, RBI said.

Manappuram Finance is one of India's leading gold loan NBFCs. The NBFC's consolidated net profit soared 58.3% to Rs 413.37 crore on 20.6% rise in total income to Rs 1,798.59 crore in Q4 FY23 over Q4 FY22.