Employees embezzled Rs 15.8 cr in FY12, says SKS Microfinance

SKS Microfinance has said that some of its employees have cheated the company to the tune of Rs 15.8 crore in the last financial year.

The services of employees involved have been terminated and the company has written off over Rs 14 crore.

The auditors of the company have reported that there was cash embezzlement by the employees to the tune of Rs 2.5 crore and loans given to non-existent borrowers was Rs 13.3 crore, the micro lender said in its annual report.

“We have been informed that during the year there were instances of cash embezzlements by the employees of the company aggregating Rs 2,50,91,317; and loans given to non-existent borrowers on the basis of fictitious documentation created by the employees of the company aggregating Rs 13,33,13,975,” auditors S R Batliboi & Co said in the annual report.

According to the annual report, total disbursements in the 2011-12 stood at Rs 2,736 crore.

“The services of all such employees involved have been terminated and the company is in the process of taking legal action. The outstanding balance (net of recovery) aggregating Rs 14,24,40,656 has been written off,” the audit firm added.

SKS said that employee fraud is an inherent risk in the business the company operates in, since all the transactions are cash-based.

In case of cash embezzlements, the company has recovered an amount of Rs 1,08,59,714 including the insurance cover.

Cash embezzlement is 0.09 per cent of disbursement during the year, India’s only listed microlender said.

In case of cash embezzlements, SKS said it has taken fidelity insurance to minimise the losses from cash embezzlements.

In case of loans given to non-existent/ fictitious borrowers, SKS said it has recovered an amount of Rs 73,97,648 against these cases including insurance cover. These cases are 0.49 per cent of disbursement during the year.