IN ABSENCE OF CS, CFO OF KEROVIT GLOBAL PRIVATE LTD WOS KAJARIA BATHWARE P LTD SWINDLED RS 20 CRORES – FAILURE OF INTERNAL AUDIT

 

IN ABSENCE OF CS, CFO OF  KEROVIT GLOBA

L PRIVATE LTD WOS  KAJARIA BATHWARE P LTD 

SWINDLED RS 20 CRORES – FAILURE OF INTERNAL

 AUDIT

WHAT HAPPENED?

Kajaria Ceramics Ltd disclosed that a fraud of approximately ₹20 crore was carried out by Dilip Kumar Maliwal, then CFO and Key Managerial Personnel of Kajaria Bathware Pvt Ltd (KBPL), involving funds of Kerovit Global Private Ltd (KGPL) — a wholly-owned subsidiary of KBPL and step-down subsidiary of Kajaria Ceramics.

NATURE OF MISCONDUCT:

The CFO allegedly embezzled and siphoned funds over nearly two years, including creating a vendor entity in his own name and forging approvals to divert payments that were purportedly for plant and machinery.

TERMINATION AND FIR:

 KBPL terminated his employment immediately and filed complaints with the Economic Offences Wing (EOW) of Delhi Police and local authorities in Badarpur, New Delhi.

CAN ₹20 CRORE COULD BE RECOVERED FROM CFO

·      Only around ₹60 lakh has been recovered so far, and full recovery of the ₹20 crore appears unlikely.

LESSONS LEARNED

·      Absence of effective oversight at subsidiary level enabled prolonged concealment of fraud.

·      Internal audit and control systems were insufficiently integrated or enforced across group entities.

·      Delayed detection only after comprehensive review and IT controls roll-out.

·      Governance failure underscores the need for stronger internal audits, real-time monitoring and tighter vendor controls throughout corporate structures.

R V SEKAR, FCS, LLB  79047 19295