Kajaria Ceramics Faces Scrutiny After ₹20-Crore Internal Fraud

Kajaria Ceramics Faces Governance Questions After ₹20-Crore Fraud Surfaces at Group Subsidiary

A disclosure involving alleged financial misconduct at a wholly owned subsidiary has brought Kajaria Ceramics into sharp focus, unsettling investors and raising wider questions about internal oversight at one of India’s largest tile manufacturers. The company confirmed that a senior finance executive at Kajaria Bathware Private Limited is accused of siphoning off funds over an extended period, with the total exposure estimated at around ₹20 crore.

The individual, Dilip Kumar Maliwal, served as chief financial officer at the bathware subsidiary. According to the company’s regulatory filing, the funds allegedly belonged to Kerovit Global Private Limited, another group entity operating in the premium bath fittings segment. The suspected misconduct is said to have taken place over nearly two years before being detected.

While the disclosure was brief, its implications were immediate. Kajaria Ceramics has long been regarded as a stable, professionally run company within the building materials sector. News that such a sizable fraud could occur within its corporate structure — and remain undiscovered for an extended duration — prompted analysts and shareholders to reassess assumptions about internal controls.

The company said it terminated the executive’s services and reported the matter to the Delhi Police. Management also scheduled a call with investors, signaling an attempt to contain uncertainty and provide clarity as scrutiny intensified.

Details about the exact mechanism of the alleged fraud remain limited, but the broad outline resembles patterns seen in other corporate governance failures: misuse of financial authority combined with insufficient cross-entity oversight. The fact that the transactions occurred between group subsidiaries has drawn attention to the challenges of monitoring decentralized finance functions within large conglomerates.

Kerovit Global, whose funds were allegedly misappropriated, is part of Kajaria’s diversification push beyond tiles into bathware — a segment that has seen rapid scaling and operational complexity. Market observers note that such expansion often involves layered reporting structures, increasing the importance of real-time checks and independent review systems.

From a financial standpoint, the exposure does not threaten Kajaria’s balance sheet, but it is far from negligible. With quarterly profits recently reported at roughly ₹134 crore, a ₹20-crore loss would represent a meaningful dent if absorbed in a single period. On an annual basis, the figure amounts to a mid-single-digit percentage of estimated profits — manageable, but material enough to affect sentiment.

Beyond the immediate numbers, investors are weighing secondary risks: legal proceedings, recovery prospects, reputational damage, and whether regulators or auditors may demand tighter compliance measures. In such situations, markets tend to react less to the loss itself and more to what it signals about governance culture.

As investigations progress, attention will turn to how the company strengthens its internal safeguards. Experts point out that multi-entity corporate structures require continuous reconciliation, segregation of duties, and independent review — principles central to effective auditing services in india — to ensure irregularities are detected before they escalate.

Kajaria has emphasized that the issue is isolated to a subsidiary and linked to individual misconduct. Whether that assurance holds, and how convincingly management reinforces oversight frameworks, will shape investor confidence in the months ahead.