Hexaware to probe forex scam

MUMBAI, INDIA: Hexaware Technologies’ Board of Directors has appointed a special committee to conduct an internal investigation and make recommendations for changes to its foreign exchange management practices.

Hexaware took the decision after fraudulent foreign exchange option transactions conducted by one of its official. Hexaware suspended the official who exercised unauthorised fiduciary powers. The company plans to provision between $20-25 million to cover any potential exposure as a result of these transactions.

A meeting of the Board of Directors today, decided to appoint the committee, which includes Shailesh Haribhakti, chairman of the Audit Committee, Preeti Mehta, Partner, Kanga & Co. and L.S. Sarma, member of Audit Committee.

The company will take measures and actions as advised by the committee.

The transactions in question were took place over the last few months and were unauthorised and outside the company’s normal hedging program.

The information regarding these transactions was intentionally withheld from the senior management and the Board of Directors and was not included in internal reports. The first transaction came to light on November 22. Preliminary investigations conducted over the next three days led to the disclosure of more such transactions.

“As immediate steps, an embargo has been placed on all Option deals; future forex deals will necessarily have to be transacted jointly by two signatories out of the designated four from amongst the top management; the company’s authorised dealers are being informed about this procedure and the internal auditors (KPMG) are being asked to conduct a thorough audit of the function. The company will continue to maintain the normal hedging strategy to protect against the rupee appreciation,” said Shailesh Haribhakti, chairman of the Audit Committee.

“The company’s business remains robust and its future growth trajectory unaffected. Our order book, as of September 30, 2007, stands at over $300 million. We will continue to build on that,” said Rusi Brij, vice chairman and CEO, Hexaware.