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'Increased adoption of whistle-blowing by Corporate India'
Source: IRIS | 17 Mar, 2015, 05.50PM 

Renewed focus on ethical business practices, a heightened sense of individual integrity and regulatory pressure is driving corporate India to recognize whistle-blowing as an effective platform to detect and deter fraud.

In line with this, EY a leading provider of assurance and advisory services announced a strategic arrangement with InTouch, a UK based organization which offers independent whistle-blowing hotlines. Leading companies in India are now realizing the benefits of hotlines as a powerful medium to report complaints.

With this arrangement, EY's Fraud Investigation & Dispute Services (FIDS) and InTouch will enable corporates seamlessly institute and implement robust whistle-blowing mechanisms.

Arpinder Singh, Partner and National Leader, Fraud Investigation & Dispute Services, EY said, "The last few months have seen a major shift in perception, with individuals developing lower tolerance toward unethical practices and being more inclined to blow the whistle. This has compelled companies to adopt global practices to ensure high ethical standards in all areas of operation. It is anticipated that whistle-blowing will be embraced with improved enthusiasm companies will also critically evaluate outsourcing the entire function for greater economies and efficiencies."

Jagdeep Singh, Executive Director, Fraud Investigation & Dispute Services, EY who leads the Corporate Integrity practice that oversees whistle-blowing services added, "Whistle-blowing mechanisms are essential in identifying and mitigating risks related to fraud. Hence, it is important that companies have a strong mechanism which allows stakeholders to report their concerns effectively. EY's arrangement with In Touch will bring a unique proposition to companies to institute an appropriate and effective whistle-blowing mechanism seamlessly, from concept and advisory to operation. We believe that a third party service provider will generate more confidence and facilitate confidentiality, to augment the effectiveness of the process."

John Wilson, Director, InTouch India said, "In our experience, an independent hotline proves to be a very attractive channel for persons wanting to report concerns. These hotlines are trusted by whistle-blowers and are available 24/7, meaning that someone can make a report whenever is most comfortable for them. Furthermore, understanding the psyche of a whistle-blower is important. Our service centre representatives are trained to be sensitive to whistle-blowers, build a rapport with them and gather as much information as possible to help conduct a successful investigation."

EY FIDS and InTouch, through this arrangement, have already assisted many companies institutionalize whistle-blowing mechanisms. It puts them in an advantageous position to leverage the full range of services through one window and further ensures legal and regulatory compliance.

Assisted by EY and InTouch, the Dainik Bhaskar Group has been a frontrunner in instituting whistle-blowing internally.

Girish Agarwal, Director, DB Corp said, “The implementation of the whistle-blowing mechanism is a major boost to enhance our efforts in encouraging sound corporate governance within the company. EY's expertise alongside InTouch’s operational experience proved to be well co-ordinated and we see it bringing us immense value.''
The capabilities of EY Fraud Investigation & Dispute Services and InTouch India will help organisations establish a whistle-blowing mechanism by selecting the most suitable policy and mechanism, developing a fraud response plan, constituting a cross-functional committee, advising on response action and implementing of whistle-blowing channels. It will also deal with complaints by providing advice with regard to effective response action and spreading awareness by assisting in preparation of roll-out strategy, providing assistance in conceptualization and development of content for training.


Tata Steel, Ranbaxy and DB Corp hire InTouch MCS to attend whistle blowers
Sachin Dave, ET Bureau Mar 13, 2015, 04.00AM IST 
(According to industry insiders,…)

MUMBAI: 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.

"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 24x7 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 whistle blower to share all the details may not be easy. Psychiatrists and trained counsellors 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 whistle blowers 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 whistle blowers 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 whistle-blowing 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.

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