Mainboard-listed Darco Water Technologies, the provider of integrated engineering and knowledge-based water treatment solutions, says the former General Manager, Admin Manager and Accounting Manager of its Taiwan subsidiary, Darco Engineering Taiwan (DET) are suspected of defrauding the company of NT$186.2 million ($8.09 million).

Darco Water says the findings came to light as a result of the investigation by DET to conduct checks on the accounting records of DET after the group suspected earlier this year of possible misappropriation of funds following several extraordinary and large administrative cash advances, unsubstantiated project costs and unusual cost overruns and losses in DET.

The investigation uncovered “considerable financial account manipulation” by DET’s former General Manager Mr Chen Kuai, 54 years old; former Administration Manager Ms Nina Chiu, 46 years old; and former Accounting Manager Ms Lydia Chiu, 40 years old.

Darco Water says numerous fraudulent transactions have been passed off either as legitimate administration expenses or project costs and petty cash. These transactions were generally conducted with the assistance of third parties in the creation of false contracts. The group’s fund was then fraudulently transferred once tax invoices were received from the third parties. The investigation also discovered that the Parties had regularly instructed DET’s accounting staff to withdraw large sums as petty cash without adequately accounting for their usage.

DET has since filed four police reports to date involving more than 100 transactions against the three former employees for working with other companies and individuals to cheat DET for the total amount of NT$186.20 million.