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Common Man (CA)     16 July 2018

Misappropriation of company funds

Greetings,

I have somthing to get cleared about.

My friend woked for a Private Ltd company as Accountant for 1.5 yrs. He has resigned and the company provided him No due Certificate and releiving letter. Now the company finds misappropriation of companies funds for his personal use. But it was not cash. Funds has been transferred to his personal bank account. But my friend was not the authorized person for net banking. Now the company filed a suit against the employee. Can the company win this ? please suggest



 7 Replies

R.Ramachandran (Advocate)     16 July 2018

You are a Chartered Accountant.

Please tell the reasons why you have doubts that the Company may not win?

Common Man (CA)     16 July 2018

Sir,

Thanks for the reply.

First reason is my friend was not the authorized person for Netbanking to transfer funds. 

Second reason is the company has clearly issued a No due certificate stating that my friend does not owes anything and releived from his duties.

Third reason is my friend has releived from the company after proper notice period as per the agreement.

Please advise.

 

R.Ramachandran (Advocate)     16 July 2018

1. Just because No due certificate was given does mean that he was not involved in any fraud, or that he cannot be charged for fraud when the fraud comes to light at a later point of time.

2.  Again, just because a person was relieved does not mean that he was not involved in any fraud, or was not to be charged for such alleged fraud.

3.  Quit possible that a particular person may not the the authorized person for Netbanking to transfer funds, but he might have in conspiracy with other could have committed the fraud.

The bank can definitely lodge the complaint and bring in the charge of fraud.  But whether it will succeed or not in the case will depend upon the evidences that it provided before the Court of law. 

Common Man (CA)     16 July 2018

K sir. Thanks for your valuable time

Kumar Doab (FIN)     17 July 2018

If the said employee was not empowered to transfer funds as posted by you then he/she is not at fault.

The bank/banker of establishment cannot transfer fund by his/her directions, if he/she was not authorized signatory.

Upon getting communiqué from establishment he/she may reply accordingly.

Is he/she willing to pay back the extra amount or not?

Kumar Doab (FIN)     17 July 2018

Pool the infor from all threads initiated by you and use IT.

Common Man (CA)     18 July 2018

Thanks sir


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