Capillary Technologies Gets KPMG Report on EUR 3.04 Million Fraud

KPMG found four payments at its Czech subsidiary were diverted through impersonation, not a technical breach, the company said.

Capillary Technologies fraud report: the Capillary logo over a laptop and phone on a cafe table

Key Takeaways

  • Capillary received KPMG's final forensic report on 30 October 2026 and disclosed it on 31 October.
  • Four payments worth about EUR 3.04 million were made between 26 June and 2 July 2026.
  • Outsiders impersonated a senior executive and an external lawyer, likely using a lookalike domain, WhatsApp and personal email.
  • KPMG found no malware, mailbox compromise or employee involvement.
  • The audit could neither confirm nor rule out deepfake audio or video.
Table of Contents 7 sections
  1. Capillary Technologies fraud report at a glance
  2. How the four payments were diverted
  3. What KPMG ruled out and what it could not confirm
  4. Capillary Technologies: from the July incident to the October report
  5. What Capillary says it has done since the fraud
  6. Where Capillary Technologies stands after the KPMG report
  7. FAQs

Capillary Technologies said on 31 October 2026 that it has received the final forensic audit report from KPMG on a payment fraud that hit its subsidiary Session M Czech Republic s.r.o. The report found that four disputed payments, worth about EUR 3.04 million in total, were most consistent with a payment-diversion fraud in which outsiders impersonated a senior executive and an external lawyer.

The company said the findings do not point to a technical break-in at its systems. KPMG found no evidence of malware, mailbox compromise or any involvement by employees, and it could neither confirm nor rule out the use of deepfake audio or video.

Capillary Technologies fraud report at a glance

DetailCapillary Technologies
CompanyCapillary Technologies India Limited
AuditorKPMG
Affected subsidiarySession M Czech Republic s.r.o.
Amount in disputeAbout EUR 3.04 million
Number of paymentsFour
Payment dates26 June 2026 to 2 July 2026
Report received30 October 2026
Disclosed to exchanges31 October 2026
Nature of fraudPayment diversion through impersonation and social engineering

How the four payments were diverted

According to the findings reported on 31 October, the fraudsters impersonated a senior executive and an external lawyer. They likely used a lookalike email domain and moved the conversation to channels outside the company's official systems, including WhatsApp and personal email.

Three of the four payments went to accounts of ZZDJB Co Limited at HSBC in Hong Kong. The fourth went to an account of Zhongxian Trading Pte. Ltd at UOB in Singapore. The company said the audit did not trace the funds beyond those accounts, did not identify who ended up with them and did not establish the recovery position.

What KPMG ruled out and what it could not confirm

KPMG found no evidence of malware, endpoint compromise, mailbox or account compromise, or traditional email spoofing. It also found no evidence that employees were involved.

The audit could neither confirm nor rule out deepfake audio or video, because the original recordings and related evidence were not available to the auditors.

Capillary Technologies: from the July incident to the October report

WhenWhat happened
26 June to 2 July 2026The four disputed payments were made
6 July 2026Capillary first disclosed the incident to the stock exchanges
31 July 2026The Audit Committee approved a forensic audit and appointed KPMG
30 October 2026Capillary received KPMG's final report
31 October 2026Capillary disclosed the report to the exchanges

In its July disclosures, Capillary said the loss was about EUR 3 million, roughly Rs 32.7 crore, at a recently acquired step-down subsidiary overseas. The company said about EUR 450,000, or about Rs 4.9 crore, was recovered after the fraud was detected, and that the subsidiary holds a cyber and crime insurance policy. The company's Audit Committee approved the forensic audit.

What Capillary says it has done since the fraud

Capillary said it has strengthened its payment controls and is pursuing recovery and legal remedies. It described the matter as payment-diversion fraud driven mainly by social engineering and impersonation, and said the findings do not point to a technical compromise of its endpoints or accounts.

Where Capillary Technologies stands after the KPMG report

The KPMG report puts the amount in dispute at about EUR 3.04 million across four payments made over one week in late June and early July. Capillary has said it received the final report on 30 October, disclosed it the next day and is pursuing recovery of the money and legal remedies.

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Frequently Asked Questions

What is Capillary Technologies?

Capillary Technologies India Limited is a software-as-a-service (SaaS) company that disclosed a payment fraud at its Czech subsidiary.

What did the KPMG report on Capillary Technologies find?

The KPMG report found that four disputed payments were most consistent with a payment-diversion fraud, carried out by outsiders impersonating a senior executive and an external lawyer.

How much money was involved in the Capillary Technologies fraud?

The four disputed payments add up to about EUR 3.04 million.

How many payments were diverted at Capillary Technologies?

Four payments were disputed, made between 26 June 2026 and 2 July 2026.

Which Capillary Technologies subsidiary was affected?

The affected subsidiary is Session M Czech Republic s.r.o.

When did Capillary Technologies receive the KPMG report?

Capillary Technologies received the final KPMG report on 30 October 2026 and disclosed it to the exchanges on 31 October 2026.

How did the fraudsters trick Capillary Technologies' subsidiary?

They impersonated a senior executive and an external lawyer, likely used a lookalike email domain and communicated through WhatsApp and personal email.

Did KPMG find a technical breach at Capillary Technologies?

No. KPMG found no evidence of malware, endpoint compromise, mailbox or account compromise, or traditional email spoofing.

Were Capillary Technologies employees involved in the fraud?

KPMG found no evidence that Capillary Technologies employees were involved.

Did KPMG confirm the use of deepfakes at Capillary Technologies?

No. The audit could neither confirm nor rule out deepfake audio or video because the original recordings and related evidence were not available.

How much has Capillary Technologies recovered so far?

In July, Capillary Technologies said about EUR 450,000 had been recovered after the fraud was detected, and the KPMG audit did not establish the current recovery position.

How is Capillary Technologies responding to the fraud?

Capillary Technologies said it has strengthened its payment controls and is pursuing recovery and legal remedies.

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