Rs 2 cr financial frauds detected in SKS Microfinance: Media Report

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Rs 2 cr financial frauds detected in SKS Microfinance: Media Report
SKS Microfinance witnessed financial frauds to the tune of Rs 2.1 crore this year and is taking a slew of measures to prevent its employees from indulging in such offences, said the media report.

Investigations are in progress and services of employees involved in the fraud have been terminated and the company is in the process of taking legal action, according to the company's latest annual report.

"We (auditors) have been informed that during the year there were instances of cash embezzlements in the company aggregating Rs 1.27 crore; loans given to non-existent borrowers on the basis of fictitious documentation created by the employees of the company aggregating Rs 83.3 lakh and misappropriation of cash by an external party, amounting to Rs 4.5 lakh ," the company auditors S R Batliboi and Co told media.

The net impact of frauds comes to around 0.06 per cent (vis-a-vis 0.51 per cent over last year) of the total amount disbursed by the company during FY13.

"Company is working towards further reducing this percentage by making process improvements, obtaining adequate insurance cover and by increasing engagements and opportunities for direct contact with members," the only listed micro-lender said.

During the year under review, it has recovered an amount of Rs 1.4 crore against a fraud amount written off in previous years, SKS said.

Dion Global Solutions Ltd.

Read more about: sks microfinance, frauds
Story first published: Monday, December 16, 2013, 9:14 [IST]
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