Rs 5-10 crore fraud hits Paytm Mall
Paytm’s founder & CEO, Vijay Shekhar Sharma, said 10 employees in its e-commerce business were sacked while 100 vendors were delisted from the marketplace post an audit conducted by E&Y. The investigation concluded that there was a Rs 5-10 crore fraud in the company.
Sharma said the audit firm had been engaged with the firm from before and wasn’t appointed specifically to investigate a suspected fraud.Read more ↓
Earlier media reports surfaced about employees in Paytm Mall siphoning off cashbacks into their own bank accounts in collusion with vendors on the platform.
The company had said that Paytm Mall was partnering with E&Y which will undertake frequent audits to identify, analyse and monitor various in-built and outsourced processes.
Paytm Mall has raised $650 million in a span of two years from Alibaba, SoftBank and SAIF Partners. However, despite the backing of heavyweight investors, its e-commerce strategy has been driven largely dependent on cashbacks.
We had written recently, on what went wrong at Paytm Mall , where cashbacks had become the mainstay for the business. The e-commerce entity had burnt roughly $150 million to $200 million in the September-October period last year – the traditional Diwali sales window – on cashbacks and marketing, sources had told ET. The cash burn, though, wasn’t helping it to make a dent in the wider e-commerce landscape dominated by Amazon and Walmart-owned Flipkart.