Fino Payments shares recover after 'funds misappropriation' allegation

Lender says action by some employees will not impact it; conducts internal investigation

Shares of Fino Payments Bank recovered after falling 7 per cent Thursday as it spoke about complaints of misappropriation of funds invested in schemes introduced by the lender’s employees in their "personal capacity".

The bank has filed a police complaint and informed regulatory authorities after auditor KPMG conducted an internal and independent investigation.

“Fino Payments Bank Limited has received complaints from one of its client in Mumbai and some of its merchants / distributors/ other Individuals in Gujarat and Maharashtra through email for non-receipt/ repayment of funds pertaining to/ invested in potential fictitious schemes allegedly floated by some of the employees of the Bank, in their personal capacity,” said the company in an exchange filing.

The bank said it does not consider itself to be liable and will not be impacted by the misappropriation. Adherence to regular processes is likely to have been ignored by complainants during transactions, it said.

"While the investigation is currently ongoing, prima-facie the Bank is of the view that there is no liability/impact on it and the Bank has neither benefited nor at loss due to these incident(s), therefore there is no requirement of reporting the incident(s) to stock exchanges."

“The investigation so far prima-facie indicates that there were unauthorized actions and misrepresentation by the alleged staffs, so also contributory negligence and/or potential collusion on the part of complainants with respect to abnormalities and non-adherence with regular processes of the Bank, which seems to have been potentially ignored by the complainants.”

The bank said the complainants have not taken any action against the bank for recovery of funds.

At 1pm, Fino Payments Bank was 2.76 per cent down at Rs 321.20 on the National Stock Exchange.