From Satyendra Dubey to Arvind Gupta, a few brave men and women have over the years striven to expose the stinking caverns within Indian companies even as agencies and executives charged with that task failed to do their duty. Dubey was an Indian Engineering Services officer working as a project director for the National Highways Authority of India in which capacity he exposed serious financial irregularities by contractors of the project. For that brave deed he had to pay with his life, murdered in cold blood on the night of 27 November 2003.

His sacrifice though was not in vain as the uproar over his death led to the Public Interest Disclosure and Protection of Informers Resolution (PIDPIR) in 2004. Gupta, in the news now, blew the lid on the alleged loan fraud and the quid-pro-quo between Chanda Kochhar and her family and the Videocon group, a case which is now being probed by the Central Bureau of Investigation.

Dubey and Gupta and a handful of others like them, given the honorific label of whistleblowers, are only now coming out of the shadows and serving as models for others to emulate. Figures show that the number of complaints Indian companies are receiving from whistleblowers is increasing at a rapid pace.

Whether it is in the infamous Satyam fraud in 2009 or in the more recent case of the Zee group, it has been a missive from a whistleblower that has precipitated the crisis.

In the first instance, according to a report filed by the Serious Fraud Investigation Office (SFIO), Byrraju Ramalinga Raju’s admission of embezzlement came after an anonymous email to a Satyam board member apparently was sent by a former senior executive of the company. In the Zee case, too, a whistleblower’s letter to the SFIO ultimately led to Subhash Chandra’s admission of the acute financial crisis within his group.

One difference is that complainants are no longer restricting themselves to sending letters to regulators and then sitting back and waiting for action to be taken. They are actively pursuing cases of deemed fraud, communicating with regulatory agencies in India and even abroad, as in the case of ICICI Bank where the whistleblower wrote to the US Securities and Exchange Commission.

Poor internal control mechanisms along with leadership teams that lack integrity and supported by pliant independent directors have led us to believe either that frauds are rare or that their detection is difficult. Neither is obviously true. The Association of Certified Fraud Examiners in its 2018 Report to the Nations on Occupational Fraud and Abuse estimated that a typical organization loses 5% of its annual revenues to fraud. The report concluded that collectively these caused more than $7 billion in actual damages and, significantly, that 50% of frauds are detected following tips.

In an interview with National Herald, Gupta makes the point that his detailed alert to regulators and the bank’s committees was based on an analysis of whatever was available in the public domain. Yet, until he sounded the alarm, no one thought it necessary to make even the most basic of enquiries about the suspicious nature of the transactions and even after the media had highlighted the case, the ICICI Bank board chose to give a clean chit to Kochhar.

Corporate filings reveal that whistle-blowing is much more common within companies, evidence that employees are beginning to feel more secure about pointing out misdemeanours they see around them.

The 2011 Whistleblowers Protection Act, which became a law in 2014, also gives them the safety net that was missing earlier so that men like Gupta now don’t need the cloak of anonymity.

The Companies Act, 2013, as well as Securities and Exchange Board of India regulations have made it mandatory for companies to pay heed to all such complaints. Despite that, there are very few cases where a whistleblower’s warnings have been taken up in earnest by companies.

Effective action taken early when an alarm is sounded can prevent catastrophic consequences later. One of the champions of whistleblowing is Sherron Watkins, vice-president at the notorious Enron Corp. It was Watkins who sounded the alarm on the company’s fraudulent accounting practices that ultimately led to its collapse. However, in August 2001, when she first alerted then- CEO Kenneth Lay of accounting irregularities, she was ignored. We know where that went.

The fear is that unless more cases in India are promptly investigated and brought to their logical conclusion, the efficacy of whistleblowers as instruments of change will continue to be debatable.

Whistleblowers International, a practice group of the Brian Krauss law firm, has a fascinating history lesson on its site: “The concept of whistleblowing on behalf of one’s government dates back to 7th century England. The term qui tam, which today usually refers to False Claims Act cases, is shortened from the Latin phrase qui tam pro domino rege quam pro se ipso in hac parte sequitur that translates to he who prosecutes for himself as well as for the King."

We need many such hardy souls, willing to prosecute for themselves as well as for the health of Indian business.

Sundeep Khanna is an executive editor at Mint and oversees the newsroom’s corporate coverage.

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