Jul 12, 2012, 08.23 AM IST

Taking steps to address internal weaknesses: OnMobile

Shares of telecom value-added service provider OnMobile saw a smart 8% upmove after a weak start as the management denied media reports of misappropriation of funds.

Source: CNBC-TV18

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Shares of telecom value-added service provider OnMobile saw a smart 8% upmove after a weak start as the management denied media reports of misappropriation of funds. The company's co-founder and CEO Arvind Rao had stepped down after a board meeting yesterday following reports of financial irregularities.

Arvind Rao, founder, MD and CEO of OnMobile had resigned following a KPMG probe that confirmed faulty corporate practices under his stewardship.

OnMobile is conducting an independent review of existing controls, a company official told CNBC-TV18. "The special review has highlighted weakness in internal controls," the official said adding, "steps have been initiated to addressed this weakness."

However, the official added Rao "was not guilty of any misappropriation of funds" and he continues to be a shareholder of the company as on date.

Further, the OnMobile official said the matter is not likely be referred to further government or investigating agencies.

Following Rao's resignation, Mouli Raman, co-founder and executive director (and the whistleblower), will now act as interim MD and CEO until the search for a new CEO ends.