Can Fin falls 9% after Rs 38 crore fraud

Can Fin Homes stock fell over 9% on Wednesday after the company reported an over Rs 38-crore internal fraud to stock exchanges. The fraud amount is over a fifth of the quarterly profit reported by the housing finance company last week.

The fraud involved misappropriation of funds by certain employees at its Ambala (Haryana) branch, who misused their chequesigning authority. The fraud, which was detected by the company on Monday, would have a one-time impact on profits, it said. Loan provisioning would not be required, the lender added.
Can Fin Homes is promoted by Canara Bank. The company’s shares had risen last week after it reported 13% growth in profit to Rs 183 crore in the June quarter.

An FIR has been lodged and the company said that all necessary reports will be submitted to the rele vant authorities within the prescribed timelines. The company said three employees — Vishal Saxena, Vivek Bhagat, and Deepak Gupta — were involved in the crime. An initial investigation by the company indicates that the fraud is confined to the Ambala branch.
The company will have to provide for the full fraud amount as a loss. In case investigative authorities are able to recover any of the siphoned amount, it will be written back.