Dainik Bhaskar joins Tata Steel, Ranbaxy to hire UK firm to attend to whistleblowers

13 Mar,2015

By Sachin Dave


Indian companies are increasingly roping in specialists to manage their whistle-blowing mechanisms at a time when employees don’t hesitate to vent out their frustrations on social networking sites or to rush to regulators in case of a suspected fraud or an irregularity.


While the Companies Act makes it mandatory for the listed firms to have a whistle-blowing mechanism, some companies such as Tata Steel, Ranbaxy Laboratories and DB Corp have gone a step ahead to hire the UK-based InTouch MCS to attend their whistle blowers through a specialised BPO facility in Bengaluru.


“As Indian companies aspire to go global, whistle blowing is something they cannot afford to ignore. While setting up call centres inside the company do work, but it’s not as effective and a whistle blower may not always get the confidence to report to them, on a fear of being identified,” said John Wilson, managing director at In-Touch, which has set up independent whistle-blowing mechanisms for about 15 Indian firms.


InTouch has 40 people working at its Bangalore facility to deal with whistle blowers who either call on the hotline or mail them. These complaints are then forwarded to the concerned to the senior official in the company who may or may not investigate the matter. InTouch has tied up with Ernst and Young recently where the latter could take up the investigation in the frauds in case the company wants them to do so.


Girish Agarwal

“We wanted to boost employee confidence, so we decided to include a multi-channel option for whistle blowers. The employees were provided with several options, which range across a 24×7 hotline, website reporting and email,” said Girish Agarwal, director at DB Group.


According to industry insiders, hiring is the toughest part for the specialists as convincing the whistleblower to share all the details may not be easy. Psychiatrists and trained councillors are in demand to handle nervous whistle blowers.


Industry trackers say that often Indian companies have been looking to just “tick the box” by setting up whistle blowing mechanisms in house. Insiders say that many Indian companies tend to get worried about the whistleblowers and often don’t want the allegations to backfire on the company.


“Often Indian companies are worried that if a proper whistle blowing mechanism is set up it can backfire on them. However, the risk of having none is worse, as the whistleblowers can then go to regulators or take it to the social networking platforms,” said a senior official who is currently investigating a whistle blowing case in a multinational based in India. In the case, initiated after a whistle blower had shot emails alleging fraud, the investigations are now being carried out by one of the big four audit firms, the person said.


Globally, independent whistleblowing firms get about 2.4 complaints per 1,000 employees. While 50% of the total complaints are made on phone, the remaining are made through email and a miniscule 5% through post.


“It is tough to say how many of the concerns raised by the whistle blowers are genuine. But companies tend to investigate the more serious ones, especially around sexual harassment and fraud or bribery allegations,” said Arpinder Singh, partner and national leader, fraud investigation & dispute services (FIDS), EY India.


Research says that about 60% of the whistle-blowing complaints are about HR issues like sexual harassment and about 10% are about corporate governance issues. Going ahead, it is expected that even Sebi may have to set up a whistleblowing mechanism.


Source:The Economic Times

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