Deloitte finds malpractices in vendor management and casual labour onboarding by Amrutanjan employees

Amrutanjan Healthcare, which earlier initiated a forensic audit on a whistleblower complaint, has informed exchanges that the audit has found few acts of personal gains by some of its employees including kickbacks from marketing vendors and malpractices in casual labour onboarding. 

In February, the Chennai-based healthcare company initiated a forensic investigation by Deloitte Touche Tohmatsu India LLP following an anonymous whistleblower complaint alleging lapses by certain senior management employees.

In a regulatory filing, the company published the forensic audit report of Deloitte along with a special review report by PKF Sridhar & Santhanam LLP. 

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The Deloitte audit report said an employee has received kickback from a particular vendor and that multiple unexplained cash deposits to the tune of ₹8 lakh were deposited to the employee’s bank account between the period 2019 to 2022. 

“There were instances of Employee 1 using vendors of Amrutanjan for personal purposes. He had sought assistance from two vendors for the purpose of daughter’s birthday banner and wife’s tuition banner, respectively,” it noted. 

HR malpractices

In the case of another employee, Deloitte said it found two instances where email communications were sent from the employee’s official email id to external email ids which had potentially confidential information. 

The audit firm also found several malpractices in casual labour onboarding by another employee. For instance, Deloitte said, as per the practice, only the employer contribution (PF and ESI) is paid by the principal employer to the vendor. However, in case of a particular vendor, Amrutanjan Healthcare is paying both employee and employer contribution of PF and ESI resulting in a potential excess payout of ₹5.18 lakh between January 1,2022 to December 31, 2022. “We observed that there were no competitive quotations sought against this vendor,” it added. 

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In another instance, Deloitte found 33 instances pertaining to 25 unique laborers, whose records were not present in PF ECR Challans, however payments to the vendor has been made against these laborers amounting to ₹3.88 lakhs including salary, PF and service charge.

The audit firm estimated the total financial impact of the malpractices in HR to ₹55.85-lakhs. However, PKF Sridhar & Santhanam LLP, which did the independent assessment of Deloitte’s observations, reduced the actual loss to ₹7.66 lakhs after verifying additional documents during the investigation. 

No financial impact

In its response, Amrutanjan Healthcare said the management has taken necessary action against the employee who received  kick back from marketing vendors and is in the process of  recovering the potential pecuniary benefits. 

The company also said there has not been any leakage of confidential information and the security and integrity of its data and confidential information remains intact. 

On the allegation of malpractices in casual labour, the company said it has initiated the process of recovery of the excess amount received by the vendors and casual labourers, wherever the same has been quantified and identified in the above-mentioned reports. It also added that it has strengthened the onboarding process for casual labour vendors. 

“None of the allegations which were investigated require any revision to the financial statements of the Company as the amounts involved in the allegations were insignificant,” the company said. 

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