Companies & Sectors
SKS Microfinance employees swindle Rs15.8 crore

There was cash embezzlement by the employees to the tune of Rs2.5 crore and loans given to non-existent borrowers was Rs13.3 crore, the micro lender said in its annual report

 
Hyderabad: SKS Microfinance has said that some of its employees have cheated the company to the tune of Rs15.8 crore in the last financial year, reports PTI.
The services of employees involved have been terminated and the company has written off over Rs14 crore.
 
The auditors of the company have reported that there was cash embezzlement by the employees to the tune of Rs2.5 crore and loans given to non-existent borrowers was Rs13.3 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 Rs2,50,91,317; and loans given to non-existent borrowers on the basis of fictitious documentation created by the employees of the company aggregating Rs13,33,13,975,” auditors SR Batliboi & Co said in the annual report.
 
“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 Rs14,24,40,656 has been written off,” the auditors 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 Rs1,08,59,714 including the insurance cover.
 
Cash embezzlement is 0.09% of disbursement during the year, SKS clarified.
According to the annual report, total disbursements in the 2011-12 stood at Rs 2,736 crore.
 
To mitigate this risk to a large extent, the management has put in place several preventive control measures such as procuring indemnity bond from every field staff, with personal guarantee of a third person.
 
“Every bank transaction (deposit/ withdrawal) is to be executed by minimum of two staff comprising a bank signatory and a confirmed staff. The strongbox at every branch is controlled by two keys and the keys are held by two different employees in the branch,” SKS informed.
 
The company also said that surprise visits are conducted by managerial employees, at the time of carrying out cash/bank transactions by field employees besides minimising the cash balances at various branches to the lowest level possible (Rs50,000+ next day disbursement).
 
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 Rs73,97,648 against these cases including insurance cover. These cases are 0.49% of disbursement during the year. 
 

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COMMENTS

Rajan Alexander

5 years ago


Level of staff ethics can be correlated with organizational culture and organizational culture in turn is a reflection of the ethics of the business/ownership structure. So when the latter comprises of loan sharks, how does anyone expect an organization to behave more ethically and with integrity?

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Israel's Teva to foray into India with P&G through pharma JV

The joint venture between Teva and P&G would set up OTC drug manufacturing facility at Sanand in Gujarat with an initial investment of Rs250 crore

 
Ahmedabad: Global pharma giant, Teva Pharmaceutical Industries (TPI) shall foray into India through a joint venture with US based Proctor & Gamble (P&G) and will set up its first manufacturing facility at Sanand in Gujarat, reports PTI quoting a top state official.
 
"TPI and P&G joint venture P&G Teva would set up over the counter (OTC) drug manufacturing facility at Sanand with an initial investment of Rs250 crore," Gujarat's Commissioner Food and Drug Control Administration (FDCA) HG Kohsia said.
 
"The total proposed investment in Gujarat by the JV is around Rs500 crore. They would initially hire 500 people, which could go up to 1,000," he said.
 
Around 15 acres of land for the project has already been acquired, Koshia said.
 
A formal announcement is likely to be made after signing of a memorandum of understanding (MoU) with the state goverment during the Vibrant Gujarat Global Summit-2013 scheduled for January next year, official sources said.
 
"The facility to come up on 15 acres of land is proposed to have two separate lines, one for manufacturing Ayurvedic drugs and another for allopathic medicines," he said.
 
A joint delegation of P&G Teva recently visited Gujarat and evinced interest in setting up a manufacturing facility here.
 
"A four member delegation led by Vice President Corporate Quality of Teva Karin Baer met us and sought details of setting up a facility to manufacture OTC products like cough syrups, inhalers....amongst others," Koshia said.
 
Assistant Vice President Teva Rajiv Palliwal, Senior Director OTC operations Teva Haresh Gill and Seema Sundereshan, a senior scientist from P&G were part of the delegation, he said.
 
The proposed facility at Sanand would have state-of-the-art equipment and adhering to good manufacuring practices (GMP) norms to make products both for Indian and overseas market, Koshia said.
 
A lot of global companies have evinced interest in setting up their facilities in Gujarat, an established hub for pharmaceutical companies, especially SMEs.
 
NYSE listed, Teva Pharmaceutical is number one global generic company, having a portfolio of 1,480 molecules with operations in 60 countries and distribution network in around 100 countries. 
 

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