‘What does this mean? These accounts are also being “funded”.’
‘The incentive Sunder has made in these three months adds up to Rs 36,000. He has been a very smart cookie. He waited till the last day to figure out the shortfall between his target and his actual performance. For example, on 30 September he realised that he was short of his targets by four customer payments. He decided to pay those from his own pocket. The four payments he has made on 30 September are the following.’
And he opened his laptop and brought up a spreadsheet on his screen. Aditya glanced at it. It had four names on the screen
Ramaji Reddy – Rs 2200
Gopal Kanji – Rs 1800
B.V. Sastri – Rs 2450
Tulsiram – Rs 1979
‘The amounts are the instalment amounts for these customers.
These four instalments add up to Rs 8,429. Sunder paid these instalments on his own. Well, who wouldn’t? In return for this payment from his pocket, he hits the contest target and makes 12,000 in return. A straight gain of Rs 3,571.
‘Now comes the challenging part. Out of the pool of customers allocated to him for collecting from, how does he select which customers account to pay into? Here Mr Smart Ass picks up on a customer who in his view is a low risk customer, a customer who would eventually on persistent follow up, pay up his dues. In any case Sunder has made his money. If he is able to recover money from these customers on whose behalf he has paid, that would be a double whammy. Tulsiram was one such customer, who features month after month, in Sunder’s list – Sunder has in effect paid Tulsiram’s instalment for all the three months.’
‘Hmm . . . so that’s the story,’ Aditya was buying his view.
‘Sunder didn’t tell Tulsiram that he has paid on his behalf, and kept following up with him for his monies. Since Tulsiram never knew that his instalments had been paid by Sunder, whenever he would get a call from Sunder to pay up, he would presume that the call was from NFS, on account of the bounced instalment cheque.
‘What did Tulsiram’s suicide note say? The recovery agent from NFS demanded three instalments? Right? Tulsiram’s story of NFS following up for three instalments was correct. That’s what he thought. However, it was not us, but Sunder who was following up for his payment. Poor Tulsiram was not even aware that his instalments had been paid.’
‘How sure are you?’
‘I would not say so if I am not sure Aditya. Sherlock Holmes has always been my favourite detective series. For a change, I decided to play him in real life. Remember Jacqueline?’
‘Oh ya! Isn’t she that same chick who almost wrecked your home. The one for whom you nearly left Seema?’
‘Ha ha Aditya. Well tried! I have a squeaky clean reputation as far as women are concerned. You can never nail me in these things. Okay I will go on. You obviously know who I am talking about. She has now moved to Vodafone as head of customer service. Thankfully, Sundar carries a Vodafone mobile. I met Jacqueline and she helped me in pulling out Sundar’s call details. There have been calls and SMS’s from his mobile to Tulsiram’s mobile till as late as 16 December . . . and . . . and . . . Tulsiram died on the 15th. He has rigorously followed up with Tulsiram . . . at times he has even made as many as twelve calls a day.
‘Aditya, Tulsiram’s December cheque has cleared. We were lucky because his salary credit from Marriott got delayed and hence our cheque for his December instalment hit his account around the same time as his salary credit. He didn’t have time to withdraw the money from his account. Given this, he is not a delinquent customer as per our records. His name was not even in the collections list for December. If you think about it . . . there can only be one reason why Sunder has been regularly calling him. Sunder was recovering his own money!’
‘So you are saying Tulsiram was not aware that Sunder had paid his instalments to NFS and was following up for recovery of his payment . . . and that Sunder, in a way was accountable for Tulsiram’s suicide.’
‘In a way, yes.’
‘So we are clean. No one can nail us, right?’
‘No. No one can come back at us or hold us accountable for Tulsiram’s death. We can publically state that Tulsiram is not delinquent with us and hence the question of following up to recover three instalments does not arise at all.’
‘Good.’
‘That was as far as Tulsiram was concerned. There is a bigger problem that we have to deal with in Hyderabad.’
‘And that is . . .’
‘The collections process here sucks. It has been completely manipulated by the collections officers. This is the last quarter of the year. The quarter when performance appraisals happen. Bonuses for staff get decided. Any screw up in the collections process in the last three months of the year influence the portfolio quality and directly the performance rating right up to the top. Hence in any company, the October–December collections performance is very very important.’
‘Why are you telling me this? If I didn’t know this I wouldn’t be where I am?’
‘I didn’t mean it in that manner Aditya. That was not the intent. I got a bit suspicious when I saw the payment receipts for Tulsiram. They were blank. When I saw the receipt book audit process, I freaked. And when I came across the Shoba Debt Recovery Agency bills, it just blew my lid. I also picked a sample of customers whose payments have come in on the last day and telecalled on them. I mentioned this to you earlier.
‘I checked with Nirmal, the guy who has audited the receipt books. It’s clear that he had done it only for an academic purpose. He comes from branch network. Reports into Gowri’s chain of command. The audit report was prepared by Raman Bhaskar and signed off by Nirmal. How can someone do this? What is the sanctity of the audit process?
‘And this Raman Bhaskar . . . he comes with a background . . . with a not so good past. I told you about his relationship with Gowri earlier. When I confronted him with the various audits and the billing issues, he resisted for some time. Gave vague answers, but when I didn’t let go, he agreed to have funded these accounts, through the collections agency. There are many more Shobha Debt Recovery Agencies in Hyderabad alone. This has become a menace in Hyderabad. If group audit gets wind of this, we will be terribly embarrassed. This is a collections malpractice, which is like a termite attack. If not fixed, it will eat up our entire system. This could have been identified and fixed, if only they had a robust audit process. That was not to be. Gowri managed to fix this process through his own guy.’
Aditya suddenly sat up at this comment from Manish. ‘And why do you say that Gowri fixed this process through his own guy?’
‘Gowri pushed Raman Bhaskar into collections in Hyderabad and had his performance on paper audited through Nirmal. Gowri was aware of everything that was going on in Hyderabad. Amit would not have even suspected this because as far as he was concerned an independent channel was auditing the collections performance. And the audit reports were fine. If I was him, given the equation with Gowri, I would have expected Gowri’s man, Nirmal in this case, to go all out and critically examine my team’s performance and try and pick holes in my delivery. If there was anything wrong in collections, then I would have expected Gowri’s team to be the first ones to identify it and create a scene. I would not have backed Gowri to get entangled in this in such a manner.’
‘What is your recommendation?’
‘I think you should sack the guys in Hyderabad. Raman Bhaskar needs to go. Even though they will put in their papers, we should terminate them and not give them an option for an honourable exit. Nirmal compromised the audits and he needs to go too. You will have to quietly review collections processes across the country . . . and . . . and . . . you will have to take a call on Gowri.’
‘Why Gowri?’
‘Aditya, he was the one who legalised this practice in the branches. If I were to believe Raman, funding is happening in almost all branches and has executive sanction from Gowri. There had been times in the past, when Gowri had tried to inf
luence me to get into this practice. I resisted and hence became unpopular with him. I am sure he would have tried to influence Amit too and would have failed. However, this time around he went a step ahead. He successfully manipulated this through the branch managers. He placed his own guys strategically to conduct the crime and policed it through the branch managers, who were also his own guys. He has systematically corrupted the entire place. I wouldn’t have believed it till I saw it with my own eyes. As an evidence for his innocence, Raman Bhaskar showed me an SMS from Gowri, which said . . .’ and he paused.
‘Wait for a minute Aditya. I actually asked him to forward the same to me. Let me read it out to you. It says, “Raman go ahead and manage it as per our discussion. Do what you have to. Nirmal will help you clear the agency bills. Take his assistance if required to make the payout.” This was a message he had sent among many others asking him to manage the funding of the portfolio. He has legalised this menace within NFS. As I said, if we do not curtail it, we will be in trouble.’
‘Is it happening in other parts of the country?’
‘I am sure it would be. Despite us separating collections from sales, I am sure they are hand-in-glove across the country. The relationship between Gowri and Amit is not helping either. They just don’t speak to each other to resolve issues.’
The balance of the conversation was lost on Aditya. He was just stuck on three points. Gowri was involved in funding of accounts. He was the one who legalised the menace in the collections team of NFS. He still wielded significant authority over the branch credit and collections teams. With him around, things wouldn’t improve. He had to have a conversation with him. Things were not going as per his plan. Aditya had to act before things blew up in his face. The suicide issue was staring at him. It was sure to have its repercussions.
The plane was flying over Mumbai. The air traffic congestion over Mumbai made sure that the plane was in the air for much longer. It gave time for him to dwell over the issue at hand.
‘Amit too could have been at fault,’ muttered Aditya as the lights got dimmed for the plane to land.
‘Unlikely,’ said Manish. Aditya was startled. He was just speaking aloud and had not expected Manish to hear and respond.
‘I don’t think so,’ Manish continued. ‘Given that the audit reports were all fixed and clean, there was no way he could figure out that something was wrong in Hyderabad. Had he known it, he would have fixed it. You can’t blame him for something he didn’t do.’
As the plane dropped in altitude and the landing announcements happened, Aditya sat up straight. He had made up his mind. Some decisions had to be taken in the interest of the organisation. Some decisions had to be taken in his own interest . . . to protect his own job. As if stung by the troubled decisions that Aditya had made, the plane landed with a huge thud and swayed for a couple of seconds before it steadied itself and taxied to the parking bay.
‘In life, you are often confronted with situations when you become victims of incomplete information. You will, when put in such a position, have to back your gut and take decisions. Not taking a decision is the worst thing you can ever do,’ mused Aditya, and made up his mind. The conversation with Manish was a telling one.
From the airport, Aditya went to meet Amit at the Bandra police station. Manish was too tired to go anywhere. He hadn’t slept the previous night. Aditya’s secretary had booked him into Hotel Sahara Star, right next to the domestic airport. He went to the hotel and hit the bed.
Aditya met Amit and Chanda at the police station and assured them that the weight of the entire organisation was behind him and that they would do everything physically possible to get him out. Ravi Subramanian, the bank lawyer, joined in the discussion and helped Aditya give solace to the two of them. After the lawyers left, Aditya also shared with Amit the crux of his discussion with Manish. Amit seemed shocked and devastated at what Aditya told him. ‘Do not worry Aditya. Let me get out of here. I will fix everything. If the system needs a flush out, I will not hesitate,’ he had said. Aditya smiled and left with a promise to meet him the next day, in court.
As expected when Amit was presented in court the next day, the Mumbai high court granted a stay on the warrant issued by the Hyderabad court. At around noon, Amit walked out of the police station, a free man, albeit temporarily.
That very evening, a mail was sent out from Aditya’s office which had the following contents.
Dear colleagues,
As all of you are aware, we have over the past twenty-four months seen extraordinary progress and growth in NFS. From a little short of 150 branches in 2006, we have now grown our branch network to over 400 branches. We have achieved leadership status in personal loans and mortgages and we are also a large player in the durable finance business. All this has been accomplished under the able stewardship of Gowri Shankar. Gowri has been instrumental in taking NFS to higher than expected profit levels of USD 55 million in 2007 and this number is expected to be even higher in 2008.
After a successful stint as head of NFS, Gowri moves on to take over a more challenging assignment as head of a newly created asset management company for the group in India. He will be charged with building this company from scratch into a world class company, something which he successfully did at NFS. His distribution ability and skill at building scale in business will be leveraged by the asset management company.
Taking over from Gowri as managing director of NFS will be Amit Sharma, who has excelled in his role as head of credit and collections in India. He has been instrumental in developing a world class analytics and credit management platform and we look forward to his leadership and team building skills to grow the business in India and also lead our initiatives as we pass through a tough credit environment.
I have also requested the group to release the services of Manish Kakkar who will now be back in India to take over the credit and collections role for NFS that he had handed over to Amit. Manish is not a new face to NFS and I expect him to seamlessly take off from where he left and apply the skill sets that he learnt during his stint overseas. He will also be managing the overall credit strategy for NYB in India, in addition to his role at NFS.
Amit and Gowri’s move is effective immediately. I will shortly announce Manish’s date of release in consultation with the Singapore regional office.
Please join me in wishing Gowri, Amit and Manish, all the very best in their new role.
Regards,
Aditya
As a consequence of this, later in the day, the movement of Chanda to NYB as their customer service head was also announced. She couldn’t have continued in any role in a company where her husband was the managing director. NYB internal regulations did not allow such an arrangement. She was not happy about it, but she didn’t have any choice.
Amit moved in and took over the role from Gowri almost immediately. For Gowri, the clock stopped ticking at NFS, the moment he got a call from Aditya asking him to meet him. Aditya had called him and spoken to him on his way back from the police station, on that fateful night, when he had gone to see Amit. It was at Aditya’s request that he met him at 8 a.m. the next morning.
When Gowri arrived at the Grand Hyatt at eight in the morning, Aditya was waiting for him at the reception. Over breakfast, Aditya presented the head of asset management company opportunity to him. He projected it as if it was the next biggest thing for NYB and that this initiative required the skills of a dynamic individual like Gowri.
Deep within, Aditya didn’t want to lose Gowri. He knew that Gowri had great business building skills, business acumen and overall he was a great leader who had high levels of emotional quotient. His connect with his people was brilliant . . . though he had to temper down his aggression and desire to get to the end at any cost. Gowri was a potential retail bank head, and Aditya knew that.
‘Can I think about it and get back? Say by tomorrow?’ Gowri tried to buy some time. He did not want to react immediately.
Aditya initi
ally told him that he was in a bit of a hurry to close this and make the change, but when Gowri did not agree and kept pushing him for time to think it over, Aditya dropped the bombshell. ‘Look Gowri. I believe that this is a great opportunity for you. Unfortunately this is also the only opportunity that you can get within the group. You either take this and move to the asset management company or else you will have to move to some project role within the group. You cannot continue as managing director of the NBFC.’
Gowri was stunned. Was he being served the notice? Was the AMC only a honourable exit route that was being provided to him? Gowri, being Gowri was not the one to be easily cowed down.
‘But why? What have I done?’
‘Gowri, a number of issues at the branches have been traced back to your support. You have been running this place now as MD and even in the past as the network head on your whims and fancies – as your personal fiefdom. There have been several acts of indiscretion at your end.’
‘Is it something to do with your and Manish’s visit to Hyderabad yesterday?’
‘So you have already heard about it. Well, partly Amit. Even in Hyderabad, many malpractices in collections have been linked to Raman Bhaskar. You knew that the guy’s integrity was suspect. Yet you got him placed there whereas you should ideally have sacked him. Manish even cautioned you against him. Various practices in the branches are being followed at your behest. I don’t think you want me to get into this.’ Aditya cautiously stayed away from mentioning the collections funding issue.
Gowri didn’t respond. He could not recollect which instruction he had given and when. What was Aditya referring to? Could be anything? He was scared to ask. It was true that he had been running the company as his own. A number of his decisions had been ad hoc and may not have complied with the group rules and regulations. He had given out of turn promotions, increments, doled out club memberships, expensive gifts to staff, etc. He had rewarded people aligned to him and the rewards were often not in line with NYB policy. He did not know what was being referred to here by Aditya. He had lived life on the edge. It was clear that his mom-and-pop style of running a large company had created monsters difficult to manage and control.
Devil in Pinstripes Page 25