Capillary Technologies has appointed KPMG Assurance and Consulting Services LLP to conduct a forensic audit into suspected fraudulent and unauthorised banking transactions involving one of its recently acquired overseas step-down subsidiaries.
The company’s Audit Committee approved the forensic audit on July 31. The investigation will independently examine the transactions and the circumstances surrounding the incident. It will also review banking processes and internal financial controls, determine the root cause and recommend corrective measures.
The development follows Capillary Technologies’ July 6 disclosure that approximately €3 million, equivalent to about ₹32.7 crore, had been transferred from the subsidiary to unauthorised third-party bank accounts.
According to the company, the attackers employed sophisticated deepfake methods, including voice cloning, forged signatures and social engineering, to impersonate members of its key managerial personnel and secure authorisation for the transactions.
Capillary Technologies recovered approximately €450,000, or ₹4.9 crore, after detecting the incident and initiating recovery measures. The company also traced additional funds to certain bank accounts, which were subsequently placed on hold by the respective banks. However, the exact amount currently frozen has not been disclosed.
The Bengaluru-headquartered enterprise software company is coordinating with banks, law-enforcement agencies, cybercrime authorities and other stakeholders to trace and recover the remaining funds. The affected subsidiary is covered under a cyber and crime insurance policy, and the insurer has been informed. The extent of insurance coverage and the final financial impact are still being assessed.
Capillary Technologies has stated that, based on the information currently available, there is no evidence that its customer information, employee data or technology infrastructure was compromised. The company has also said that its business operations are continuing without material disruption.
