New Delhi, Dec. 24 -- Kajaria Ceramics' recent disclosure of fraud is a sentiment dampener as it raises corporate governance issues. During the rollout of a new vendor onboarding system, Kajaria found an embezzlement of around Rs.20 crore.

The fraud, spanning the past two years, involved an advance payment made as capital expenditure for a new plant at Kerovit Global Pvt Ltd - a wholly owned subsidiary of Kajaria Bathware Pvt Ltd. A senior employee created a fake vendor and siphoned off funds.

In an analyst call on 22 December, the management said the financial impact of Rs.20 crore will be recognized as an exceptional item in FY26. Also, the accused chief finance officer (CFO) has been terminated.

The financial impact appears manageab...