Bankerupt (Ravi Subramanian) (20 page)

37

April 2008

Boston

The Snuggles Global CEO conference was in full flow. The India presentation had just got over and Shivinder had received a standing ovation. After all, India was the number one country in terms of growth for Snuggles across the globe. Next was the presentation by the Latin American team, the last for the day. While their presentation was in progress, a short and hefty African American discreetly walked into the large ballroom of the Hilton Plaza, went straight up to the global CEO and whispered something into his ear. The CEO got up with a pained look on his face, looked at the congregation and said loudly, ‘You guys carry on. I will be back soon.’ He then followed the man out of the room.

In the next twenty minutes, Shivinder was called out. He was ushered into a room where four people were already present: the Asia-Pacific head of Snuggles, the legal head, the global CEO and a fourth man he had never met.

‘Hello, Mr Singh. I am Nick Rand.’ The fourth man seemed to have read his mind.

‘Have we met before, Mr Rand?’

‘No. We haven’t.’ Nick was curt. The expressions on the faces of the others were quite cold, making Shivinder wonder what was going on.

‘You actually thought no one would find out, Mr Singh?’ Nick began to speak.

‘Find what out, Mr Rand?’

‘Fraudulent sales figures, padded up receivables, increased profitability and valuations. I don’t know where to begin.’ And he paused before getting up from his chair. ‘It all started last year, Mr Singh, with a lady complaining to Snuggles Inc. through her American associate about child labour at a factory manufacturing Snuggles shoes and leather accessories.’

‘So, did you find children working at any Snuggles manufacturing unit? I don’t think we have underage labour anywhere, Mr Rand. We follow strict procedures at all our manufacturing sites.’

‘Hold on! Hold on!’ Nick hurried to put all speculation to rest. ‘I have just begun.’ And he started pacing up and down the room, as if he were narrating a film script to a group of producers. ‘The complaint came to us through a professor at MIT who wrote to us on behalf of the complainant. The professor had done a fair bit of research for us in the past.’

‘So? What is this all about?’

‘The address where child labour was being used, as indicated by the complainant, did not match with any of our manufacturing facilities.’

‘It could be a unit manufacturing fakes. We have them all over the world, don’t we?’

Nick nodded his head. He raised his eyebrows and tilted his head to the left. ‘Possible. We would have assumed the same and intimated you had the images accompanying the complaint not been shocking.’

‘What image?’

‘Of the label stitched on to the tongue of the shoe. A label which indicates the size, place of manufacture, price, etc. But most importantly, a label which has a code.’ Shivinder knew that at Snuggles, every label had a unique code to indicate the model, serial number and the place and month of manufacture. ‘Strangely, the label in the image which was sent to us had that code too.’

‘Why would that be strange?’ Shivinder was being difficult. Aggression, he thought, would get him out of a difficult situation. ‘These days fakes look identical to the real shoes.’

‘Because, Mr Singh, I am yet to come across a fake which has a genuine code on the label. The worst we have seen thus far is that all the fakes manufactured at a given facility have the same code. They just pick up a label and replicate it across shoes and models. But in this case, the four images sent to us had different numbers—that too codes which matched the shoe models. Which meant there was a high probability of the labels being genuine. They had been generated using the same algorithm that we use in our factories.’

Shivinder raised his eyebrows and ridiculed Nick. ‘What are you trying to say, Mr Rand?’

Nick was not intimidated by Shivinder’s approach. He was used to such reactions. ‘Just out of curiosity we ran the codes through our database. And guess what? Shoes with these codes had already been sold through a certain franchisee in Mumbai.’

‘Maybe someone got hold of the numbers and generated the labels. If you want I can check it out and come back to you. This breach is easy to plug. Wish you had told me earlier.’

‘That won’t be required once you have heard us out, Mr Singh.’

‘Nick was in India for a few months, Mr Singh.’ The regional manager Asia-Pacific spoke for the first time. Unknown to Shivinder, or for that matter anyone else from his insider team, Nick had spent six months in India in an undercover operation, trying to dig deep into the Snuggles scandal.

Nick continued, ‘I went to the factory located deep inside a slum. A four-storeyed building. Big facility. Over two hundred and fifty workers. Forty-five of them children. As in forty-five I could count as being visibly underage.’

‘You just said that it was not listed amongst our manufacturing sites. So I don’t know. I’ll have to check.’

‘Thanks, Mr Singh. But you know about the facility.’

‘The presupposition is ridiculous.’ Shivinder was losing his cool now.

‘You might want to see this.’ Nick handed over the order copy, signed by Deven Khatri, to Shivinder. ‘I picked up a copy when I was there.’ Shivinder didn’t have an answer and was beginning to look defeated. Taking a deep breath, he looked up. In a voice filled with sorrow, he said, ‘I hope you are aware, Deven Khatri disappeared a year ago. A missing person complaint has been registered with the Mumbai Police, who have been unable to trace him.’

‘Yes, we are aware. We are really sorry about that. He has signed this purchase order.’

‘I just wish what you are saying is not true. Deven seemed like such a nice guy. Committed to the organization and to me.’

‘We are sure about the latter. A bit doubtful about the former, though. Moving on,’ Nick continued, ‘we went to the store from where shoes with these numbers had already been sold. This is the one on Linking Road, in Bandra, Mumbai.’

‘Yes, we have a showroom there.’

‘We visited that store. The retailer proudly told us that he had another store—half a mile from where we were. He took us there and showed off his store. A new one, opened in the last twelve months. And guess what?’ He paused and added, ‘There is no record of the new store in our central systems.’

‘Oh, is that so? I am sure it’s a mistake which can be corrected.’

‘It’s not a mistake, Mr Singh. The code on the tongue of each shoe at the second franchisee we went to matches a shoe which has already been sold elsewhere. This store is not connected to our global system. No one at Snuggles knows of this except your confidants in India. And this is not the only such store.’

‘Are you insinuating that we run a fraudulent set-up?’

‘Your game is up, Mr Singh. You took advantage of your knowledge of our internal systems. You knew that the only time the code is used after a product is sold is if it comes back for warranty. And in case it did come back, you managed it at your end, so that it never blew up into a service issue.’

Shivinder knew he was exposed but fought on. ‘I am appalled at this accusation.’

‘Well, you would have had reason to be if this was just a mistake. But it seems to be a conscious effort at defrauding the company. I have visited most of your franchisees in western and southern India and personally compiled a list of outlets which appear to be fraudulent. My list has two hundred and sixty-eight stores. God knows how many such stores there are in the country. And each one of them claimed to have paid twenty thousand dollars as a non-refundable deposit.’

‘Never in my wildest dreams would I have imagined that Deven could do something like this.’ In a last-ditch effort, Shivinder tried to shift the blame onto Deven.

Nick looked at the head of Asia-Pacific. There was a look of disgust in their eyes. ‘Greater Boston Global Bank.’

‘What about it?’

‘The account in the name of Snuggles India Private Limited. Opened and operated by you and your CFO, Deven Khatri. Can you explain why the amounts in that account never made it to any of the financial statements?’

‘No clue. Why are you asking me questions which you should ideally be asking the CFO?’

‘Because, Mr Shivinder, there is no way that you didn’t know about the account. You have made the payout to this manufacturer of fake shoes in Dharavi from the GB2 account. You signed the cheques, Mr Singh. You.’

‘I sign most of the cheques which have been validated by the CFO.’

‘Maybe then you could explain how and why you continued issuing those cheques even after Mr Khatri disappeared. Mr Khatri was not authorized to sign the account on his own, whereas you were. The slumdog millionaire shoe manufacturer that we visited had been paid through cheques from GB2 signed by you as recently as two months back. It can only mean you knew about the account, the fake shoe manufacturers and the mysterious franchisees.’

‘And Mr Singh,’ the Asia-Pacific head spoke up again, ‘this only points to the fact that you knew about this entire operation and ran this clandestinely. You opened over two hundred and sixty-eight franchisees, unauthorized by Snuggles, despite being explicitly prohibited from doing so; flooded them with fake shoes manufactured at a dirt-cheap cost, siphoning off the money in the process. Not to mention the enormous risk of brand dilution.’

‘Would you care to tell us where the money is, Mr Singh?’

‘I don’t know what you are talking about. I need to talk to my lawyer before I comment.’

‘You will have an opportunity for the same. But just as a professional courtesy to the CEO, I would like to let you know that we debated if we should let you resign. But the consensus was that you should be terminated with immediate effect and legal action be initiated.’ The Asia-Pacific head was angry but firm.

Shivinder got up from his seat. ‘I will consult my lawyer and let you know what needs to be done. Thank you, gentlemen.’ And he walked out. He knew that his game was up.

The Asia-Pacific head and Nick continued smiling as he opened the door. ‘Before you leave, you might want to see the charges filed against you this morning in India,’ said Nick as he got up to follow Shivinder outside the room. Shivinder stopped in his tracks. A police complaint had been filed against him? Was his game really up? He turned and took the papers from Nick’s hands. It was a six-page document which he read till the last word and then looked up. ‘You can’t do this.’

‘Just fifteen minutes ago, Mr Singh. Fifteen minutes. We did just that. Charges against you for siphoning off money and causing losses of over fifty million dollars to Snuggles Inc.’ The global CEO was categorical.

Shivinder turned and headed for the exit. The moment he stepped out of the door, three uniformed officers surrounded him. They had badges on their shirts which Shivinder recognized as the Boston Police Department’s logo. Below the logo were three words which made him shiver—Economic Crime Department. He quietly walked with them, even as they read him his rights. As his steps slowly dropped in sync with those of the police officers, a strange look appeared on his face. It was pure unbridled rage. It was all because of Cirisha Narayanan that he had got into trouble. Everything was going smoothly until she visited his factory in Dharavi. He would make her pay for it.

38

March–May 2008

India

As Shivinder was fighting a battle with the team at Boston, an entirely different saga was unfolding halfway across the globe. In Delhi, an anti-corruption crusader had cornered the government on its inaction with regard to bringing back the thousands of crores of black money stashed by Indian politicians and entrepreneurs in tax-friendly and privacy-intensive banks overseas. Issuing a clear threat to make public the names of Indians with accounts in overseas tax havens like Switzerland, he had sent a chill down the spines of everyone involved. GB2 was specifically named by him as one of the banks involved. He claimed to be in possession of a list of over three hundred Indians who had clandestine accounts overseas and that too with GB2.

Narayanan was worried that his name would be on that list. His withdrawal of over ten crore rupees from the GB2 Geneva account to pay creditors and investors their dues had caught the fancy of the media. In larger cities like Delhi or Mumbai, this amount would not have raised eyebrows. But in Coimbatore, a few hawks from the media watched his every move. A hungry, hyperactive media, busy speculating on who those three hundred people could be, egged on by a few jealous small-time competitors of Narayanan, suddenly took note of the fact that the latter had produced ten crores out of thin air and paid back the investors in cash. The issue blew up into a scandal. And when the local media took note, could the national media have been far behind? The source of the funds started being questioned. This intense trial by media had its impact.

The day Narayanan realized that he might be exposed in the GB2 Geneva account scam, he applied for an American visa. The reason given to the visa authorities at the American consulate was that he was going to visit his daughter in Massachusetts. And the day the media included his name in the possible list of Indians with black money overseas, he decided to bail out. Leaving his emu business in the hands of a few caretakers, he took the first flight to Boston from Chennai. Cirisha was at the airport to receive him. She was very excited. Her father was coming to visit her for the first time after her marriage.