Hexaware Board appoints special committee to investigate forex option transactions; provision for a $25 million loss

26 November 2007

The Board of IT and BPO services company Hexaware Technologies, has announced the appointment of a special committee that will conduct an internal investigation and make recommendations for changes to its foreign exchange management practices.

This action is due to certain actively concealed and potentially fraudulent foreign exchange Option transactions conducted one Hexaware official.

The Hexaware official, who exercised unauthorised fiduciary powers, has been immediately suspended, pending investigation, a company release said.

Hexaware plans to provision between US$20-25 million to cover any potential exposure as a result of these transactions.

According to the company, the series of foreign exchange transactions in question were initiated over the last few months, and were unauthorised and outside the company''s normal hedging program.

 Information regarding these transactions, according to a company release, was intentionally withheld from the senior management and the Board of Directors, and the company says it was even excluded from internal reports. The first transaction came to light on Thursday, 22 November, post which preliminary investigations were conducted over Friday, Saturday and Sunday, which uncovered an entire series of such transactions.