Having slipped into financial troubles since the beginning of the year, Paytm Mall now finds itself in the midst of another bad publicity. Sources now say that the company is under a forensic audit after a potential scam from its employees which could have resulted in a huge loss for Paytm Mall.
The news comes from several sources close to Paytm Mall who told Entrackr that a forensic audit is underway at the company. The audit is conducted by Ernst & Young who found that there were lapses and that some employees of the organisation could be involved in a scam.
While it’s not clear what the nature of these lapses was, sources believe that the employees in question were colluding with the company’s service providers which resulted in losses for the Noida-based firm.
Sources said “About 100 employees have been grilled by the auditor. Employees’ email and chat are scanned to ascertain their involvement in any irregularities. Importantly, employees are asked to furnish consolidated bank statements to know whether they have received any kickbacks”.
Paytm appears to have sacked close to 25 employees after the witnessing the findings of the forensic audit.
Having split away from its parent company One97 Communications, Paytm Mall failed to achieve the success that Paytm gained through the cashback model. The company had posted a loss of nearly Rs 1,800 crore in the financial year 2018 and has also cut short on its market shared to 3 percent from 5.6 per cent in 2017.
Another company in recent times to encounter a forensic audit is Jabong which was previously owned by Rocket Internet. The company, which is currently owned by Flipkart, was later found to have made some fraudulent transactions. These transactions were done through Jabong’s employees who issued the company’s resources for their own gain.
With PhonePe and Google Pay catching up to its market share, it doesn’t look like the future is bright for Paytm, not until we know more about the final audit report.