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Case Study: Watchdog In The Doghouse

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Ranbeer Singh spun the salt cellar over and over, the rattling sound dulling the sound of thoughts inside his head. Beside him sat his tenth grader son, Uday, arguing a news item with his mother Radha. Their words were layering Ranbeer's thoughts.

Uday was saying, "How can a department refuse to do its work because they were not given free tickets to the cricket match?" And Radha was saying, "If your father refuses to do what is right, won't you also refuse to do what is right?" Uday leaned over and hugged his dad and said, "Mmmm... my dad will never refuse to do what is right... he is so cool, that is why, no dad?"

Ranbeer looked at his son and mouthed, "That's right, beta! I am far too cool... and yes, one must never be frightened of doing right."

Saying that took a lot of courage for Ranbeer. Now, he would have to do what had to be done... 

The past several days had unleashed a fury in the life of the otherwise mild and happy Ranbeer. This is what happened.

Ranbeer had joined Stalsky India six months ago as its CFO. Two weeks ago, there had been an enquiry by the Telecom Regulatory Authority of India (Trai) into what they claimed were telecom licence violations. Reading further, he gleaned that there were particular services where there was revenue sharing with the State and in this one instance, Stalsky India had, eight years ago, arranged to get their connectivity by deploying their own infrastructure thereby allegedly denying revenue to the state. There was an opinion note on the file from a law firm, although the question posed to them appeared warped, even misleading. The allegation levelled against the company was grave. Wilful intent to deny revenue to the government is a criminal offence and Ranbeer was the CFO.
Ranbeer now wondered if it was a genuine mistake or had they kept the truth away from him? He was disturbed. When he had interviewed at Stalsky, the directors he had met, the owners, everyone had come across as very dependable, professional and desirous of running a successful business.

Now, with the Trai's verdict in his hands, he met the chairman, and said, "We can get to the root of the how and the why soon, but we need to convince Trai of our wish to be with the law, not against it. So, I think the best course of action is to admit to the errors and come clean."

The chairman froze him with a look, and said,"I won't come asking and you don't come telling; we will all pretend nothing happened. But you, my boy, will go fix the damn thing no matter what you have to do!"

Ranbeer was agitated. What did that mean? Or was the chairman using metaphors that his poor English did not comprehend? Who could he go to for counsel? And how does one even talk about these things?

The next day, Trai slapped a penalty of unthinkable crores. This time, Ranbeer went to the MD, who said, "The chairman must be wondering how the Trai got to hear of this... you had better have an answer!" Ranbeer was alarmed. Things were getting from bad to worse.

Ranbeer spent the next four days poring over the transactions, the signatories, the communication and exchange of mails on this... but could not see anything that pointed to a planned fraud. He met the officers again and asked for leniency. He showed his workings and calculations, and pointed to some assumptions forgotten, some assumptions made, some interpretation of the Act, some joint reading with other Acts, some new rules...

The officers were smarter. They said very well, we too understand that companies commit acts which they believe are in the interest of the business but which end up being harmful to the exchequer. So how about we settle this: you give us an undertaking that none of the other businesses is defaulting and we will actually let you get off with a penalty that is far less.

Ranbeer took this to his chairman. "I have had a very useful discussion..." and he explained.  The chairman did not even waste time to look up, and said, "I have hired you to manage my costs and profits and cash flow and finances; what I pay you per month is what a large school spends on salaries for 25 teachers. Please do not come to me with your worries and inabilities. I don't know, I don't want to know. Go fix it. I am giving no undertaking and paying no penalty! That is what I am paying you a salary for!"

Ranbeer was seeing a rude side of his chairman that was earlier hidden behind his practiced Boardroom smile. He had been mesmerised by the tinkling glasses and inane talk about how wine was made during the World War. Then it had seemed like terrific intellectual discussion; people who could talk about breweries and bullets with that lilt in their voices. Oh! he had missed the charade completely.

Now the truth that unravelled before him was going to define his life. After a whole day in preoccupation, and a dialogue with himself, Ranbeer concluded: This mess is not of my doing; this mess was not revealed to me at the time of joining. This mess had germinated in the period before he had joined Stalsky and was not part of what he would like to sustain for a living.

So, on Friday, Ranbeer wrote to the Board, wishing to leave Stalsky as he could not bring himself to don attitudes he did not possess. He was expecting them to call him and build bridges where both parties could walk the path of right. But through the weekend, no call came. And Ranbeer had been unhappy, restless and bothered all weekend.

Monday morning, as he walked out of the lift and into the hallway leading up to his cabin, he saw Dipanshu, Arya, Stanley and Madhuveer along with other employees near his room, all huddled and whispering and looking ashen-faced. It had the makings of terrible news.

"What is it?" he asked them and they told him about CEO Kasturi Barman, who had been arrested on the weekend. "Bada ghapla ho gaya hai!" they said. There had been a raid regarding mis-declaration of export and imports at Textalsky, a sister concern of Stalsky. "The CFO was arrested yesterday, for colluding with Barman in all this. The chairman himself filed the FIR on Friday saying that his own people were colluding behind his back!"

Ranbeer felt sick. He knew CEO Barman and the CFO Sameer Naik. They were good chaps ... Arya was saying, "...Textalsky had used over-invoicing of imports to transfer funds out of India and then brought these back as foreign capital through benami companies abroad.."  

Ranbeer sensed a deep-rooted and sinister plan taking shape. It was the shape his own fate was going to assume if he did not act right now.
An hour later, a tag wearing-employee landed at his door. "I need to check your laptop for compliance issues," he said. Ranbeer nodded as the young man, Duleep Oza, ran some tests, slipped in CDs and pulled out CDs and asked him if he had copied any files to his personal mail box and he would like to examine those too. "You want to check the company account, you did," said Ranbeer. "If I copied files, the trail will tell you. If you don't know about computer audit trails, go, study and come back."

Very annoyed, Ranbeer now wanted to get to the heart of why or if Barman and Sameer were framed. The full extent of what else was going on could only be imagined. He decided to examine the ledgers, but one by one, subtle pressures were exerted upon him leaving him no time or mental energy to probe. In any case the story seemed to be unravelling.

He tried to log into Textalsky's account but he was being blocked. He was the CFO for the group, why was he being denied access?

Next came a phone call from the chairman , "It is a sad day for Stalsky that its own people have chosen to go against the organisation." Ranbeer chose to be silent at first, and then said, "I understand you filed the FIR?"

Chairman: Yes, I did! Get Trai off my back. I am an NRI and I need to trust the people who work for me!

Ranbeer: It's not you they have anything against. It's the organisation, for defaulting on licence.

Chairman: You are the CFO, the custodian of the books of accounts; clearly you know what you have done!

Ranbeer: Excuse me? I don't think I understand what you are saying. This has nothing to do with me!

But the subtle bullying had begun. Every hour or so the chairman's office came to verify some files, ask him questions, search his room.... Ranbeer nearly cancelled his lunch meeting with a key vendor, Viraj Daval, but mercifully the chairman's people left in time. But his mood remained dull and distracted through lunch and he apologised to Daval as he walked him to his car after lunch.

On the way back to the office, Ranbeer decided he would take a positive stance and try and help get bail for Sameer and Barman. That evening, the cops called on Ranbeer with an FIR filed by Daval alleging that Ranbeer had assaulted him in the parking lot for refusing to lower the prices of the material he was supplying. The cop, a friendly chap, said, "You are from a good family and educated. Does not look good getting embroiled in all this. I suggest you go to the man's office, shake hands and apologise."

Ranbeer was badly shaken. He was not going to call Daval, but a grander plan was unfolding, which seemed a lot like the ugly thrillers he watched on television. What followed was two weeks of being hounded. Within a day of Ranbeer having pieced the paperwork that pointed to both Barman and Sameer having nothing to do with the under-invoicing, the chairman called Ranbeer to his office.

Chairman: I am deeply ashamed to hear about the complaint against you....

Ranbeer: Daval? It's a lie...

Chairman: Okay, Daval lied. But Tulsa? She cannot lie, no? Her appraisal is proof, so we cannot be in doubt, no?

Tulsa was the next weapon that the chairman used. Tulsa, who worked as Ranbeer's coordinator, had alleged that Ranbeer had sexually harassed her and her appraisal was proof of his vindictiveness. She ‘complained' to HR and went on leave. The chairman was glaring at Ranbeer.

One by one they set upon him, hounded him, framed him, issued false warrants in his name.... Ranbeer had to go to the police station several times, the cops landed up at his home late one night to take a statement on something inane... Ranbeer's family was shaken.

Ranbeer met his friend Krishna Das and shared with him the sequence of events.

Ranbeer: I am too stunned to understand what is going on. The cops tell me Daval can bring pressure on them to issue an arrest warrant against me. The management is now getting remote and distant and I am being checked for all kinds of things; I am not feeling comfortable. This sexual harassment allegation is hanging on my head like a sword. Daily, I get an update from the chairman's office, but the lady herself is not in town! How can I request her for a meeting and find out what is going on? I had asked to quit but I got a not very good sounding call to ‘think really hard' before making any decision. That sounds like a veiled threat!

I need to protect myself, first. I want to formally resign, but I also do not want to sign any papers. This man is dangerous. What section of the law can protect me? What is my recourse?
Krishna: Do you have any allies within the organisation?

Ranbeer: I am too new. But I can go to the auditors? They will understand.

Krishna: The auditors can't do anything. Then again they will want process; we don't have time for that.
Ranbeer: What do you mean ‘we don't have time for that'?

Krishna: Even as we are talking, those guys are plotting against you. These are people who know their game. When the cops come, they come, and when they whisk you away, they whisk you away. Reality is that a dirty game is being played at your expense....

At work, Ranbeer told his MD, Anand Malik, "I have done no crime, Anand, so why cops?"
Anand: Law is strange, Ranbeer. It does not hear first. I had a chat with a fellow yesterday; we will need to meet him today.

Ranbeer: What kind of fellow?

Anand: The sort who will protect us when we need protection...

Ranbeer went ashen. He called Krishna as he ran down the 11 floors to the parking lot. "I am coming over, drop whatever you are doing, please! This seems to be a crazy set up....We need to sit with that Corporate legal chap..."

(Back at Krishna's office)

Krishna: Ranbeer, face it, you are an employee who is being implicated. But that will have to be proven. In the meanwhile, we have the top management on a winning wicket, we have the Trai's findings and we have you. The law is intelligent, so it will add two and two and see that you were not at Stalsky when the first lot of frauds happened. But the company has cast a tight net around you — sexual harassment, criminal warrant...; all being done no doubt to keep you tied to their apron. So, you need to get real help.

You cannot save Barman and Co yet. The company has filed an FIR against them, hence chances of the law trying to protect them is out till they are proven innocent.

Ranbeer: See what I mean? (he paused, caught his breath, then...) Can't I go to the Company Law Board (CLB)? I am senior management. The company has defrauded its shareholders and it is now criminally attacking me.

Krishna: No, you cannot. The CLB cannot protect you no matter how much the company is wrong and you are right. Your only recourse is to go to the police station...

Ranbeer: Police station? The cops there know pick-pockets, murderers and wife beaters... what do they know about cooked books? They don't understand company law! Do you think the cop there will understand under-invoicing? Over-invoicing? Will he sense my urgency and angst when I say that because of all this they are framing me?

Krishna: I hear you. But your only recourse is the common cop. And even there, you cannot bring action upon the company. You can only ask for anticipatory bail.

Ranbeer turned white. "Bail? Why bail?" And that was when they reached the office of Sushen Mantri, the legal expert.

Sushen: The company will soon be filing an FIR against you. It is a natural progression in corporate self-defence. An FIR is a great offensive to prevent you from being a hindrance while they get the time to save themselves. My suspicion is your probing the accounts has probably disturbed something. A case of sexual harassment weakens your position by weakening your mind. Yeh sab games hain baba! Thereafter, they can allege all kinds of things. So rather than think of all this, simply go and seek an anticipatory bail. And if you come by any information about their transgressions, inform the CLB as a secret informer.

Ranbeer: Secret informer? Oh God! Mr Mantri, I am from a decent family... I don't understand this language of thugs! Besides, there are no more secrets in my life now. They have cloned my mail address and it is being read by them, my phone is tapped too, so I am using a new SIM card. I am living like a fugitive. You have no idea what I am going through.

Sushen: You have to fight. You have no choice. If you do not attack, they will attack. It is the art of war. They are implicating you, what will you do? They are using friendly cops to file cases against you so that they can appear clean and blame all wrongdoing, past and present, on the staff, claiming it happened without their knowledge. That way, they start looking like the wronged party rather than the ones doing wrong.

Ranbeer: Then what is the CLB for if they won't come to my rescue? After all, am I not trying to protect their laws? 
Sushen: The CLB is a regulatory body, not a protecting agency. It will give time to the promoters to prove their innocence, but it does not have any powers and rules to protect executive managers from their promoters. In fact, there are no bodies to protect managers in the course of their duty. Only cops; this is a pure civil or criminal case between you and the promoters. The onus of defence is on you.

So, first hire a lawyer and be ready with pre-emptive bail. Collect and put together in a diary all the information that is relevant to their misconduct. Then resign. Quit. Get the hell out of the city. No one should know where you are.
Ranbeer: Wow! I am the victim, I have done nothing. I am a clean, value-led person, but I am on the run! Why? Because they are more powerful? Then my being clean had no value? Those brutes will hound me and the law whose watchdog I have been, has no provision to protect company managers?

To be continued

Classroom Discussion
Can integrity ratings of an organisation assure a candidate that the company he is joining is safe?


(This story was published in Businessworld Issue Dated 21-05-2012)