Bankerupt (Ravi Subramanian) (11 page)

18

April 2006

Mumbai

The audit committee meeting at Step Up Shoes (now renamed Snuggles India) was to be chaired by Rohit Lal, a quintessential chartered accountant. With an eye for detail, he had built quite a fearsome reputation in the realms of audit, financial and regulatory compliance. Lal had been associated with Step Up Shoes for a long time.

A fortnight before the audit committee meeting, Shivinder was a worried man. For two reasons. One, the fudged sales numbers for the previous year showed up as receivables not collected—amounts overdue from retailers for over a year—and that was not a good sign. And two, this year too, they had fudged over twenty-five crores in sales receivables to meet top-line and profitability numbers. Snuggles was a global corporate, these amounts were small. Sixty-five crore Indian rupees—forty crores the previous year and twenty-five crores this year—added up to roughly fifteen million dollars: petty cash compared to the global financials. However, any adverse comment by the audit committee would seriously dent the credibility of the Indian team.

‘You don’t need to worry,’ Aditya declared when Shivinder shared his apprehension. ‘As of now, our stated position is that all the receivables are recoverable. Last year we showed fudged sales figures of forty crores from the large retailers. All of them have bought huge quantities from us this year too. So they would have paid us in the normal course this year too. Adjust those payments against last year’s dues and show this year’s dues as outstanding. That way we will be able to show recovery of the previous year’s outstanding. Your CFO should be telling you all this. What is he there for?’

‘Sometimes hiring idiots in these roles has its own negative impact, Aditya. But how do we handle Rohit Lal?’

‘I know Lal. I will handle him,’ Aditya reassured.

‘But how?’

‘Every individual, however upright he might be, has one weak point, an Achilles’ heel. We just have to find Lal’s whoring price. A price above which he will bend. I have a fair idea of it. I will manage. Lal won’t be a threat to you.’

The audit committee meeting for the quarter passed off peacefully, much to Shivinder’s surprise. Lal did not raise any adverse query on the receivables issue. Just before the meeting ended, Lal stood up and began his concluding remarks. ‘This is the first annual audit committee meeting for Snuggles after its Indian acquisition. I have been associated with the Step Up Shoes group and Mr Jigar Shah for over seven years. It has been a very fruitful association. Now, as I sign off the eighth annual audit report for the group, I would like to request Snuggles India that, for the sake of propriety, they should empanel the services of someone else to head the audit committee. I thank everyone for their assistance and support in helping me deliver. With that, I herewith tender my resignation from the audit committee. A new head will chair the next meeting. Thank you.’ He took his seat at the head of the table for one last time to the sound of thunderous applause.

Aditya, who was also on the board of Snuggles as the bank’s representative, looked at Shivinder from the corner of his eye. A sinister smile played on his lips. Shivinder too smiled. The problem had been addressed for now. But in the next six months they had to find a way out of this self-created web of deceit.

19

Mid-2006

MIT, Boston

Cardoza was peering into his laptop, studying the latest research results from India, when a knock on the door broke his concentration. ‘Mr Etienne Lucier is here to see you. Says he has an appointment, but it’s not in my diary.’ It was his secretary, Louisa.

‘I don’t remember having granted an audience. What does he want?’

‘He won’t say.’

‘Can you check my diary and give him another appointment if you think it is OK for me to meet him? Use your discretion. I am a bit tied up right now. I also have to prepare for class tomorrow. Haven’t even rehearsed the anecdotes for my session yet.’ Cardoza, like every other academician, loved things to be planned and organized. So much so that he even rehearsed the jokes he would crack in class.

‘OK, Michael,’ she said with a smile. Realizing that it was not a good time to disturb him, she turned to walk back to her workstation.

‘Oops. I’m sorry!’ The moment Louisa turned back, she ran into Lucier who had followed her into the room and was standing right behind her. Six foot four, well built and broad-shouldered, Lucier would surely have been a basketball player in his youth. Age had made his shoulders droop and skin sag. The bags under his eyes indicated excessive drinking. Louisa could tell the age-related and sleep-deprived eyebags from the alcohol-induced ones.

‘You might want to hear me out before you ask me to come back again, Dr Cardoza. It won’t take too long, I promise.’ Without waiting for an invitation, he headed for the lounge chairs in the corner and made himself comfortable. Cardoza was initially taken aback, but was quick to recover. He waved off Louisa, who was standing at the door, and walked up to the visitor.

‘This better be good. The last thing I tolerate is someone infringing on my privacy. Mr …’ and he stopped. He didn’t remember the man’s name.

‘Lucier. My name is Lucier.’ Without waiting for any reaction, he continued, ‘Pardon my rudeness, Dr Cardoza. But it is important.’

Cardoza nodded. ‘I am sure it is. Going by the way you barged in.’

‘Surely you’ve read about the incident in Tennessee where a fourteen-year-old shot the assistant principal of his school? This was a couple of months ago.’

‘Nicholas Klingman? More than a couple of months, in fact.’

‘Yes. In March,’ confirmed Lucier.

‘What about him?’

‘Our investigations show that it was a drug-related killing, but the school is concealing facts so that its reputation isn’t impacted. We found out that Nicholas Klingman had brought in the .22 calibre semi-automatic gun to trade it in for two OxyContin pills. Unknown to his parents, he had smuggled out the gun from his father’s vault and hidden it in his bag, amongst his books.’

‘And this is relevant because?’

‘This incident has restarted the debate on gun rights, Dr Cardoza. As a consequence, there has been a fair bit of public outrage over the Second Amendment in the past few months. Many pro-gun-control lobbyists have been using the media and this incident to whip up mass hysteria against guns.’

Cardoza nodded. ‘Go on. I am listening.’

‘The Democrats too seem to be interested in keeping this alive and fresh in public memory. It will help them as we get into election mode eighteen months from now.’

‘So?’

‘All of us know and acknowledge that the crime rate in the USA is higher than in most other countries in the developed world. That’s not because the US has liberal gun-control laws and consequently a higher proliferation of weapons. On the contrary, the crime rate is high because the US has more poverty than many other developed nations. It’s this poverty which leads to crime and violence. Gun control will achieve nothing. It will just make it difficult for decent, law-abiding citizens to possess guns.’

‘Mr Lucier, I have a research paper due for submission to a journal by tomorrow. I have a class for which I need to prepare. I’d be grateful if you could stop going around in circles and tell me what you are talking about. And I am finding it difficult to comprehend what your interest in this entire matter is.’

‘Well, Mr Cardoza, I represent the NRA.’

‘Aah … the National Rifles Association. You guys are leading all the lobbying against any amendment to the gun rights. You don’t want any of this gun-control bullshit. I should have guessed.’

‘We want you to research human behaviour. Behaviour that leads to crime. Research that adequately demonstrates that gun violence has nothing to do with gun rights. Or for that matter, lack of gun control. The NRA will be happy to make sure that the institute gets funded appropriately for the research.’

Cardoza smiled sarcastically. ‘So you want to presuppose the end result before the research itself?’

‘Well. No … but … you see, Dr Cardoza …’ Lucier began stammering.

‘A single incident of gun violence in a school in Tennessee gives the NRA the jitters and it wants MIT to give authenticity to its presupposition that gun control is unnecessary. So that all your gun shops can make a killing, pun unintended. It is common knowledge, Mr Lucier, that you and your organization have opposed even basic regulations which would make things like introduction of child locks in guns, monitoring of gun shops, background checks on gun buyers and so on mandatory. Buying a gun today has become as easy as buying a Barbie doll because of you.’

‘You misunderstand, Dr Cardoza.’

‘Rubbish!’ Cardoza shouted at the top of his voice. ‘You want me to lend credibility to the research so that you can use it as one of your tools in driving public opinion against the Democratic Party’s presidential candidates who have vowed to put an end to your misdeeds. I am not naive, Mr Lucier.’

‘That is not a completely correct representation, Dr Cardoza. But on the right track, I must confess.’ Lucier was calm and composed. Cardoza was getting worked up. ‘Nevertheless,’ continued Lucier, ‘we are willing to fund this project and its chair with a grant of ten million dollars. Of which, should you be interested, you will not be asked to account for two million.’

Cardoza got up from his chair. ‘Thank you, Mr Lucier. The offer is surely a generous one. But I am constrained to decline it. It is against my grain to take up a project which clashes with my moral values. I am fundamentally in favour of gun control and for me to take up a research assignment which is in conflict with that value system will not be appropriate. I’m not even going into the offer of personal gratification that you referred to.’

Lucier got up and walked towards the door. He had just opened the door and stepped outside when Cardoza called him back. ‘On a related note, MIT never accepts grants of any kind from parties which may have a vested interest in the research findings.’

‘Good day, Mr Lucier. You might want to call in advance whenever you decide to come in next,’ Cardoza’s secretary taunted him as he walked out.

20

Mid-2006

Mumbai

Aditya had managed to keep Lal and the audit committee quiet. Lal’s daughter had secured admission to Yale for a postgraduate degree in management and her fees had to be paid. It was no surprise that the amount was transferred from GB2’s Geneva branch.

In return, Shivinder and Deven Khatri had approved a corporate social responsibility programme for a similar amount, to be spent for the upliftment of textile workers in Tiruppur. As expected, the money was paid to an NGO run by Narayanan in the area.

In the corridors of the Snuggles HQ in Boston, Shivinder was a rising star. The growth in the last two years had been quite impressive too, at least on paper. Shivinder was given a fair bit of leeway in running the company. By mid-2006, he was inducted into the Asia-Pacific Board of Snuggles. After all, wasn’t India one of the largest markets? There was only one restriction imposed on him: any expansion in the distribution and franchisee network had to be approved by the board. Unknown to the India management, a team at Snuggles in Boston was working on an acquisition which would give them access to a large franchisee network in Asia. This was the rationale behind the curtailment of franchisee expansion.