Wipro fraud probe hints at involvement of multiple officials'

BANGALORE: Early investigations into the embezzlement reported at Wipro, earlier this year, hint at the involvement of multiple officials and units within the company’s financial department, people familiar with the ongoing probe told ET.

Last week, Wipro said it will file its annual report with the US Securities and Exchange Commission for the year-ended March 2010 more than a month after the scheduled September 30 deadline, as it awaits the investigations to be completed.

Audit firm Ernst & Young, apart from an internal probe committee led by Narayanan Vaghul, former chairman of ICICI and an independent director with the country’s third-biggest software exporter will submit their reports to the company’s board later this month, according to persons with knowledge of the developments.

“The embezzlement has been happening over three years. It cannot be carried out in isolation. The objective of investigations is to identify the process improvements and even fix accountability,” one of the persons told ET, requesting anonymity. He added that it was still too early to draw conclusions, since the investigation is expected to be completed by October-end only.

The fraud came to light in December last year after a banker to the firm alerted Wipro about an overdraft. An employee working with Wipro’s ‘controllership’ division, within the finance department, had embezzled about $4 million by exploiting the exclusivity of access to the company’s banking accounts. Wipro declined to offer any comments, as the company is in a silent period ahead of its second quarter results later this month. An Ernst & Young spokeswoman did not respond to a query sent by ET.

As reported by ET in February this year, a Wipro staff embezzled crores of rupees over the past three years, sending the country’s third-largest software exporter scrambling to tighten internal controls in the finance division, where the incident took place. The employee had been working with the company for the past three years in the ‘controllership’ division, within the finance department. This cell is responsible for keeping the company’s financial books and also has powers to authorise payments whenever needed. The employee siphoned off the company’s money to his personal savings accounts in multiple transactions, worth anywhere between Rs 1 lakh and Rs 1.2 crore, and used the money to acquire jewellery, apart from making other investments, including buying land.

Apart from investigating how the processes were tweaked to carry out the embezzlement, E&Y, along with the internal auditors, is also examining if there were more departments and people involved in the incident. For instance, while the controllership unit, where the embezzlement happened, is responsible for authorising payments, such requests are processed by Wipro’s payments-processing department called Wividus.