CONCEPT OF WHISTLE BLOWING

IN CORPORATES :CASE OF MR. SATYENDRA DUBEY

Group 7
Anubhav Tuli(48)
Amitabh kumar(52)
Manoj Sardana(160)
Arvind Rathi(166)
Anil Deokar(168)
Rahul Thakur(170)
FLOW OF PRESENTATION
 Introduction
 Whistle Blowers

 Satyendra Dubey’s case

 Company Whistle Blower policy

 Indian Law: The Whistle blower Protection Law

 Case study : Challenger

WHISTLE BLOWER
A whistle blower is a person who tells the public
or someone in authority about alleged dishonest or
illegal activities (misconduct) occurring in a
government department, a public or private
organization, or a company.
 THERE ARE TWO TYPES OF WHISTLE
BLOWERS:
 Internal whistle -blowers  External whistle-blowers
report misconduct to another report misconduct to outside
employee or a superior within persons or entities
their organization
HUMAN DILEMMA
 In practical term, if an employee is concerned about
wrongdoing or risk that threatened others, he/she have
four option :-
 To stay silent;
 To blow whistle internally;
 To blow whistle outside; or
 To leak information outside.
WHEN TO BLOW THE WHISTLE
 A violation of a law, rule or regulation
 Gross mismanagement

 A gross waste of funds

 An abuse of authority

 A substantial and specific danger to public health

or safety
HOW TO BLOW THE WHISTLE
 Do it anonymously
 let the evidence speak for itself and protect yourself if possible
 Do it in a group
 charges have more weight and won’t seem like a personal vendetta.
 Present just the evidence
 leave interpretation of facts to others.
 Work through internal channels
 start with your immediate supervisor or follow the standard reporting
procedure
 Work through external channels
 go public (biggest risk)
STATISTICS
 PollingGroup:
233 individuals polled, 40% responded

Average age: 47

Employed for 6.5 years at job

Almost all lost job

STATISTICS
 Negative Effects:
 51% of gov’t employees lost their job
 82% harassed by superiors

 69% watched closely after blowing the whistle

 63% lost job responsibilities

 60% fired

 10% attempted suicide

 Positive Effects:
 20% felt their actions resulted in positive changes
 More than 50% (of responders) would do it again
REASONS FOR INVOLVING WHISTLE
BLOWER ACT BY CORPORATE

 To whistleblowing reminds everyone at the organisation

that they owe a loyalty to the organisation and not just to
their manager.

 a safe alternative to silence is one of the most

effective ways to deter and discourage people
from abusing their position and authority.
 EFFECTS OF WHISTLE-BLOWING

 Forced to leave  Physical or psychological

organization/demotion
 Credibility ruined
 Family, health, and/or life
in jeopardy
 Outrage and divisiveness
of people directly or
indirectly involved
isolation
 Organization experiences
loss of money, restitution,
productivity, and positive
reputations.
 Incarceration
SHERRON WATKINS
 Former Vice President of Enron Corporation

 Alerted then-CEO Ken Lay in August 2001

to accounting irregularities within the
company

 Warned that Enron 'might implode in a wave

of accounting scandals.'

 Testified before Congressional Committees

from the House and Senate investigating
Enron's demise.

 Lauded in the press for her courageous

actions, but left her job at Enron after a few
months when she wasn't given much to do
BUNNATINE (BUNNY) H. GREENHOUSE
 Former chief contracting
officer Senior Executive
Service, United States Army
Corps of Engineers.
 alleging specific instances of
waste, fraud, and other
abuses and irregularities by
Halliburton with regard to its
operations in Iraq since the
2003 invasion.
 Greenhouse suddenly soured
INDIAN WHISTLE BLOWER AND RESULT
MANJUNATH SHANMUGHAM
 Manjunath Shanmugham, a
sales manager of the IOC.
 ordered two petrol pumps at
Lakhimpur Kheri to be
sealed for selling adulterated
fuel for three months.
 When the pump started
operating again a month
later, Manjunath decided to
conduct a surprise raid
RESULT OF WHISTLE BLOWING
 Manjunath had been shot dead in Gola Gokarannath
town of Lakhimpur Kheri.

 His body, riddled with at least six bullets

 2 employees were arrested and the main accused, pump

owner Pawan Kumar ('Monu') Mittal, was held on
November 23 along with seven others.
AFTERMATH
 Indian Oil Corporation paid Rs. 26 lakhs compensation
to the family.
 The matter of adulteration in diesel was taken up by the
Energy Coordination Committee
SHASHEENDRAN
 exposed corruption in state-run
Malabar Cements.
 He and his two children were
found hanging inside their home
 Post-mortem report said that he
was physically assaulted before his
death
SATYENDRA DUBEY (INTRODUCTION)
 A Civil Engineer from IIT
 Project Director - National Highway Authority of
India(NHAI)
 Deputy General Director – Golden Quadrilateral Project

 27th Nov 2003 – Shot dead by unidentified gunmen in the

town of Gaya
GOLDEN QUADRILATERAL PROJECT
 Compromised by various criminal acts:
 Fudging of project report details
 Forging of documents on procurement
 Extension of tacit support by NHAI to bigh contractors

 Dubey reported this to PMO as the project was important

to the nation
DUBEY’S MURDER – SEQUEL OF
WHISTLE BLOWING
 Reported to PMO attaching his credentials on a separate
attachment, he requested PMO to remove the attachment
before forwarding
 File along with the attachment was forwarded to NHAI
for investigation
 Dubey received threat calls

 Dubey complained to PMO for leaking his identity

 Secret information and documents leaked by NHAI
officials
 Contractors were paid advance immediately

 Almost 100% of the work was sub-contracted to small

contractors
 Government should ensure the security of individuals
 Dubey’s Anonmity was ignored and the report was sent
to MoRTH
 Central government disapprove to leak his identity,
blames Bihar government for lawlessness in the state
 Bihar government pointed out irregularities in the
quadrilateral project
WHISTLE BLOWER
POLICY
HMEL - WHISTLEBLOWER POLICY
 Objective of the policy :
 HMEL endeavours to conduct its business with the highest
standards of integrity, ethics and legal compliance.
 To provide the stakeholders a way to raise issues or concerns
if they have reason to believe that these standards or the Code
of Conduct are being compromised.
 Provides a mechanism for the stakeholders to approach the
Audit Committee.
 The Audit Committee if it deems fit can approach the Ethics
Committee to be headed by COO to investigate into the
matter and report.
CONT….
 Coverage and Scope
 Covers HMEL and all its subsidiaries.

 Procedure

 All complaints / disclosures will be received, recorded and initially

enquired by the Ombudsperson who would thereafter send a report
of his investigations to the Audit Committee.
 It must contain as much relevant information as possible and
should help in initial assessment and investigation.
 The Whistleblower must disclose his / her identity in the complaint
and the Audit/Ethics Committee will not accept anonymous
complaints.
CONT…
 Investigation
 The Audit committee will go through the report and may ask the
Ethics committee or a senior person for the investigation
 The investigating authority would upfront contact the employee
against whom the allegation has been made.
 The Investigating authority will prepare a report and recommend
future course of action within 45 days on the basis of the
investigations and submit it to the Audit Committee.
 Composition of Ethics Committee

 COO, VP-Finance and VP-HR with COO as its Chairman.

CONT….
 Protection
 Try to keep the identity of the Whistleblower confidential
 Will ensure that there is no unfair treatment meted out to the
Whistleblowers.
 Any other stakeholder assisting in the investigation will be
protected to the same extent as the Whistleblower
 If a Whistleblower makes an allegation knowing it to be false or
with mala fide intentions, no protection will be provided under
this policy and he / she may be subject to disciplinary action.
Decision
 The Audit Committee will recommend to the Management about
the corrective or disciplinary action to be taken
 HMEL will initiate the necessary action.
INDIAN LAW: THE WHISTLE BLOWER
PROTECTION LAW
 NEED WHISTLEBLOWER POLICIES?
 Values ethical and lawful conduct
 Policies designed to:
Encourage timely, safe, and honest reporting of
alleged wrongs
Ensure consistent and timely institutional response
WHISTLE BLOWER PROTECTION LAW
 Key features :-
 It will protect the whistle blowers from any
discrimination or victimization in their workplace.

 It provides for concealing the identity of a citizen who

discloses information about the misuse of power and
money. Those who reveal the identity of the whistle
blower will be held liable and penalized, by the Central
Vigilance Commission (CVC).
CONT..
 The offenders will be liable for imprisonment up to 3
years and a fine up to Rs.50, 000.

 There will be penalization in case of delays in response,

under the Right to Information Act. A fine of Rs.250 will
be imposed for every day of delay beyond the set
deadline.

 There will be penalization for officials who try to

mislead the CVC.
CONT..
 The bill provides for addressing complaints against
public sector employees and employees of the Central
and the State Government.

 The bill also ensures the honest government officials are

not harassed in anyway but those individuals who file
false complaints and charges will be liable for
imprisonment up to 2 years and fine up to Rs.30, 000.
CASE STUDY: CHALLENGER
January 28, 1986

Space Shuttle Challenger

exploded 72 seconds into
its flight, killing all 7 crew
members. The flight received much media
attention because a teacher, Christa
McAuliffe, was on board.
CHALLENGER: WHAT WENT
WRONG
 Explosion caused by O-ring
failure between segments of the
booster rockets.

 Several employees of the

manufacturer, Thiokol, had
been aware of the O-ring
deficiencies.

 No one listened to the

engineers who knew about the
problem
 MAJOR PLAYERS
 Roger Boisjoly, seal specialist at Thiokol
 Directed task force for a year to study the evidence
that hot gases eroded O-rings
 Allan McDonald, manager of solid-rocket motor
program
 Larry Mulloy, NASA official, manager of
booster programs
 George Hardy, NASA official
 TIMELINE
 July 31, 1985
 Boisioly wrote a memo saying, “it is my honest and
very real fear that if we do not take immediate action
to solve the problem [the company could] stand in
jeopardy of losing a flight.”
 No conclusive evidence to back up memo
 TIMELINE
 January 27, 1986, the day before lift-off
 McDonald was worried about temperatures dropping to 22 degrees
overnight.
 14 engineers “fought like hell” to get permission to present to NASA
 All 14 Thiokol engineers recommended postponing the launch
 Mulloy and Hardy challenged the recommendation
 Mulloy: “When do you want me to launch, next April?”
 Hardy: recommendation “appalled” him

 Thiokol: Management reversed the recommendation for postponement

What kind of dilemma was Thiokol forced into?

 THE EXPLOSION
 O-rings partially failed
on ignition (picture)
 Melted metal sealed the
gap
 Hit a wind shear, causing
the booster to flex and
the seal to dislodge
 Loss of cabin pressure
 Flames led to explosion
 TIMELINE
 After the explosion
 McDonald
 Went public
 Demoted by management

 Public outcry and Congressional investigation led to a reversal of

that decision and a promotion instead

 Became spokesman for Thiokol and new rocket boosters

 Boisjoly
 “I hope and pray that I have not risked my job and family security by
being honest in my conviction”
 Never worked on a shuttle again because it was too painful

 Wondered if there was more he could have done, even though the

record shows he minced no words

 Reassigned by management with altered responsibilities

 Took leave of absence, a year later went on disability

 TIMELINE
 Later Repercussions
 Boisjoly sued Thiokol for $1 billion in personal suit
 Dismissed because Thiokol’s actions were ruled not to have
been designed to cause him distress
 Biosjolysued Thiokol for $2 billion under False
Claims Act
 Filed on premise that Thiokol falsely certified safety and
knew that the rockets they supplied to NASA were defective
 Dismissed in 1988: Judge ruled that decision to launch was

not a false claim, but an engineering judgment with which

other engineers disagreed, and that NASA also knew the facts
behind the allegations, and was not deceived