One of my colleague, who is a CA, (referred to as employee hereafter for easy reference) made fraudulent invoices and embezzled cash from the Company Bank accounts. The account was operated by joint signatories. The employee was authorized to operate the bank accounts. Employee was caught and found guilty. The preliminary estimated amount of cash involvement was near to Rs. 19.50 Lacks for which the employee reimbursed the Company for Rs. 20 Lacks immediately from his personal bank accounts.
Now Company has appointed auditors to check the records of the Company for the tenure that the employee was employed. The employee was employed for 7 years with the Company. The employer feels that there may be such more transactions which may have taken place during the tenure of the employee.
Now, employee is under sheer pressure and seeks what action that may be taken against him and how he can minimize them.
Your early reply will be highly appreciated.
Asked 3 years ago in Civil Law from Mumbai, Maharashtra
you say account was jointly operated, who was the other signatory to these transactions, what was the effect on these transactions with the other person, the employee reimbursed the company to the tune of 19.5 lakhs, and does he continue in employment or was he terminated.
If the employer feels during the employment of the employee (i.e., 7 years) he needs to get the transactions verified and audited, then he has every right to do so. You need not get worried. Who have been the signatories at that point of time along with the employee only need to worry if the employee has already been terminated from service, if not then no worries.
Many thanks for your reply. The employee and his CFO were the joint signatories during the tenure of the employee. On realizing the scam, employee was terminated from the job instantly. CFO did not play any role in the scam. Now the Company may file an FIR against the employee. Kindly advice whether the employee has any recourse to save himself from the situation and to avoid any criminal and/or civil proceedings against him?
Asked 3 years ago
Since you have already accepted the payment from him, you have condoned his mischief. FIR would serve no purpose.
If they are able to detect some more fraud he can be made liable to pay the said amount.Normally the company will not like to file FIR since it involves additional problem,if there accounts are settled.
Advocate, New Delhi
employee has reimbursed the company to extent of rs 20 lakhs against embezzled amount of Rs 19.50 lakhs . No FIR has been filed by the company as it would be only concerned with recovery of money . the company is entitled to appoint auditors to go through the accounts in detail to find out whether any further fraud has been committed . the employee has lost his job as no employer would like to retain such a employee who has embezzled funds from the organisation
The employee has already reimbursed the company money in excess of what he was found to have embezzled. If more embezzlement is detected on further inquiry then the company can file a FIR against the employee. It will be in the interest of the employee to volunteer to reimburse the entire amount embezzled by him to pre-empt the filing of a FIR against him.