Salaam all,
Khatams are very common in the Indian sub continent. Some (general) hadiths have been used to justify this practice but in the main they have been promoted by imams as having great benefits especially to the deceased.
There is a concept that by people reciting the Quran and other supplications, the 'sawab' or 'reward'' of this act, is transferred to the deceased. This is clearly contradictory to the Quran.
Because of this misguided notion, you will see that the tradition of khatams being held for the deceased has been extended to being conducted on specific days after death and being completed on the 40th day after death. We can see how one thing leads to another and now, many people are under pressure to host such khatams as they are considered as being good and holy.
In the main however, the majority of people participating in this ritual have no idea what they are reading as the Quran is read in Arabic which is not understood by them.
The aim of the khatam is to finish the Quran at least once in the gathering as of course, according to these people, the more they read, the more benefit for the deceased. This in my humble view defeats the purpose of the Quran but I do understand that people think that they are doing a good act and God will judge them for their efforts.