1st Answer

Introduction: In December 2008, Deepak Kocchar and Venugopal Dhoot (Videocon MD) started a
company named Nu Power Renewables. 50 percent stake in the company was owned by Venugopal
Dhoot owned and the remaining 50 percent stake was owned by Deepak Kocchar, Pacific Capital which
was owned by Deepak Kocchar’s Father, and Chanda Kocchar’s brother’s sister.

In January 2009, Dhoot resigned as director of NuPower Renewables and he sold his 24,999 shares in
the company to Kocchar for a mere amount of Rs. 2.5 Lakh. In March 2010, NuPower received a loan of
Rs 64 crore (as fully convertible debenture) from a company called Supreme Energy Private Limited
which was 99.9 per cent owned by Dhoot. In 2012, ICICI sanctioned a loan of Rs 3,250 Cr. to the
Videocon group of companies, as part of Rs 40,000 crore consortium loan deals.

  The CBI stated that ICICI Bank sanctioned loan facilities of Rs 3,250 crore to several companies
belonging to Videocon group such as Trend Electronics, Century Appliances and others which were in
violation of the Banking Regulation Act, Reserve Bank of India rules, and the bank’s credit policy. The Rs
3,250-crore credit amount was part of a total loan of Rs 40,000 crore sanctioned to the Videocon group by
a 20-bank association. The CBI also mentioned that in 2012, the outstanding payment of these six major
accounts (Rs 1,730 crore) was adjusted under refinance of domestic debt. Later, in 2017, Videocon
Industries Limited and its group companies were declared as Non-Performing-Assets

Arvind Gupta, a shareholder of both the Videocon group and ICICI Bank blew the whistle. He emailed a
letter to the banking regulation authorities, including to the Prime Minister’s Office, mentioning a
suspicious sequence of financial transactions between ICICI Bank, the Kochhars and Videocon’s
Venugopal Dhoot. The letter, dated 15 March, 2016, sought investigation into illicit banking and financial
transactions involving Dhoot and the Kochhars and accused them of illicit banking and that for illegal
personal gratification, all these parties acted in a non-transparent manner with respect to huge
commercial transactions.

Ethical issues such as, non-disclosure of information, conflict of interest, nepotism, and quid-pro-quo
were evident in ICICI’s easy sanctioning of Rs 3,250 loan in favor of MD Videocon group under the
leadership of Chanda Kocchar, the then CEO & MD of ICICI Bank, and wife of Deepak Kocchar.

Conflict of interest & non-disclosure of information: It involved conflict of interest as family members
of the then MD & CEO of ICICI bank would have obviously gained a financial benefit/gratification through
Videocon MD, Venugopal Dhoot. It was alleged that the loan was easily sanctioned to Videocon because
Chanda Kocchar’s husband had business partnership with Videocon MD Dhoot through a company
named Nu Power Renewables.

The ethical issue of falling corporate governance was also evident as the information regarding the
company Nu power Renewables jointly owned by Deepak Kocchar and Venugopal Dhoot was not
disclosed to the other board members of ICICI. If the information was disclosed the decision of
sanctioning the loan would have been otherwise. It was important to disclose the information as the
borrower had business connections with the CEO of the bank and member of the committee (Chanda
Kocchar) sanctioning a huge amount of Rs. 3250 crores loan.

Nepotism –The loan was sanctioned easily to VIL because Videocon MD had business partnership with
the husband and family members of ICICI bank's CEO Chanda Kocchar. She was a part of the committee
that sanctioned the loan to VIL. However, she could have simply left the meeting and left the decision to
the other board members. Her presence in the meeting and opinion strongly influenced the decision of
passing the loan in favor of VIL. The only reason for her to not leave the meeting was that she knew her
husband had a company in partnership with Mr. Venugopal Dhoot and that if she passed the loan, her
husband would get good financial gratification through Mr. Dhoot.

 Quid-pro-quo: The loan was sanctioned by ICICI Bank's CEO was because Dhoot would favor a loan of
Rs. 64 cr. to Nu power Renewables. This was after he received 3250 crores loan from ICICI, and later
Dhoot transferred all his shares to Deepak Kocchar, thus giving the entire ownership of Nu Power to
Deepak Kocchar. ‘Quid Pro Quo’ means favor in exchange for a favor. Mr. Deepak Kochhar was made
the owner of Nu Power ltd., post-sanctioning of the loan and other financial favors drawn by the other
family members like acquisition of properties and financial assets at concessional price.

Negative Impact on Bank: Shares of ICICI Bank fell 7 percent, wiping out Rs 11,353 crore from its
market valuation, amid the investigation into the alleged conflict of interest involving the ICICI; it’s CEO
Chanda Kocchar and Videocon Group MD. Their stocks fell 7 percent to Rs 258.90 on the BSE and the
ICICI stock was the worst hit among the blue-chips on both Sensex and Nifty during the morning trade.

The investigation into allegations that ICICI Bank, under the leadership of Chanda Kocchar extended a
loan with a potential conflict of interest raised many questions over the lender’s failure in governance and
exposed the bank to legal penalties and reputational risks. The investigation also led to fall of investor
confidence in ICICI bank, with potential implications for funding costs and liquidity in an extreme scenario.
Also, the bank faced a financial penalty, as well as legal action. The banking sentiment was very negative
after the central bank fined ICICI 589 million rupees ($9.1 million) for not abiding by the rules around the
sale of government securities.

Conclusion: Later, the VIL groups of companies were declared as NPAs, and this resulted in reputational
damage to ICICI and Videocon Industries Limited. It also led to fall in investor confidence and a negative
market sentiment and around 86% of the loan amount remained unpaid. Other ethical issues such as
NPAs, governance challenges, un-professionalism, weak management culture, regulatory lapses and
subversion of rules for favoring particular individuals/business entities were evident and become an
important area of concern for the overall banking industry.
2ND Answer:

Introduction: All the internal departments of Nestle Maggi worked together to re-launch Maggi in such a
way that it re-earns the trust of the consumers and its market share. The PR, advertising and social media
team of Maggi decided to implement certain impactful strategies that had an emotional appeal to set the
stage for Maggi re-launch after the ban was lifted. The crisis management began on the communication
front with a three-film campaign on social media. It started with the #WeMissYouToo campaign on social
media that targeted the young consumers through a personal appeal. The brand name ‘Maggi’ was not
taken. At the end of each video, the Maggi logo appeared on-the-screen, along with the words
#WeMissYouToo

The PR team appointed for Maggi re-launch stated that consumers only trust people who think like them
and have the same outlook and concerns as them and that’s what Nestle smartly targeted on via roping in
mothers for a digital campaign that showed mothers declaring Maggi safe for consumption.

#NOTHING LIKE MAGGI: The objective of this campaign was to bring back the memories of having
Maggi after coming back from school. After the Papa's cooking and hostel video, where the brand brought
back the Maggi memories of couples and hostellers, who basically survive on this 2-minute noodle snack,
it has now taken up to showcase the hungry siblings.

Maggi Mother: The first ad after Maggi’s re-entry featured a mother speaking nostalgically about her
child’s tryst with his favorite 2-minute noodles, adding to the emotional value of the customers especially
children who missed Maggi. # Letyourmomknow

The videos released just as the crisis/ban was about to end had a personal appeal. During the crisis, their
responses on Twitter and Facebook lacked, most of the responses being automated. The PR team
realized that their poor communication was the main reason they failed to maintain trust among
customers. Hence, after the ban their responses/communication had a great deal of understanding and
were personalized with an emotional connect present in the videos wherein kids, bachelors (young adults)
were featured expressing why they missed Maggi.

Maggi made exclusive: Consumers thrive on the feeling of owning a product or service ‘exclusively’.
Taking this into account, Maggi played it very smart by dealing with Snapdeal, which became the only
platform where Maggi packets were sold before it made an official comeback into the shelves-stores of
retail and supermarkets. This increased its demand to a great extent and customers even tried to outbid
each other for the ownership of the packets, and some of them were even ready to pay more, before it
went out of stock. The company thus set the stage for Maggi’s official re-launch into the markets. The
registrations for Maggi’s welcome kit (It contained 12 packets of Maggi, a 2016 Maggi calendar, a Maggi
fridge magnet, Maggi post-cards and a ‘Welcome Back’ letter) began on 9th November 2016, and around
60,000 kits were sold in 5 minutes when the sale began on 12th November on Snapdeal.

Why was Maggi banned?

In June 2015, the Food Safety and Standards Authority of India (FSSAI) recognized three things that
violated the food standards in India. Nestle’s Maggi range of products had higher lead-levels of 17.2
(ppm) than the permissible quantity of 2.5 ppm (parts per million); misleading labeling on the pack that
said “No added MSG”; and release of “Maggi Oats Masala Noodle with Tastemaker” without product
approval. As per to FSSAI regulations, foods with any ingredient that naturally contain MSG cannot add
a label “No added MSG” on their packets, as it gives a misleading impression that the product contains
no MSG at all. Also, Nestle defended its highest-selling product Maggi in court and said that the lead in
Maggi is below detectable limits and contested the testing reports by the FDA.

Contribution by Maggi’s design and packaging department: Since the re-launch of Maggi after the
court lifted its ban, the product packaging department of Nestle ensured that the claim “No added MSG.”
was removed from all the labels of Maggi.

The pack no longer stated: “Maggi masala noodles is a source of protein and calcium: essential nutrients
for you at all stages of life”. That’s been replaced with the message: “Consume along with fruit and milk”

Also they removed: “70g of Maggi masala noodles provides 10% RDA (recommended dietary allowance)
of protein and 18 per cent RDA of calcium” from all the labels of Maggi packets that were re-launched.

The ingredients list and nutritional information, however, remained the same as before. Product
packaging is a good medium and effective to educate and inform consumers. The packaging team stated
that their consumer insights indicated that the message of balanced diet is more relevant for consumers.

Although, Nestle never admitted that it contained excessive amounts of lead, they must have obviously
been aware and internally discussed regarding the excessive amounts of lead the noodles contained
since the Food Safety and Drug Administration (FDA) tested samples of Maggi and found lead
concentration of 17.2 (ppm). The FDA officials said the acceptable limit of lead ranges between 0.01 ppm
and 2.5 ppm. Hence, the production department of Nestle must have ensured to manufacture the new
packets of Maggi with reduced amounts of lead and MSG to avoid any further reputational and financial
risks post-ban.

Conclusion: Post-ban, Nestle increased the emphasis on health and nutrition, simplified the corporate
structure and increased their advertising, especially through social media. However, the main ingredient
for successful re-launch was improved PR and communication strategy. While test results of noddle
samples technically caused the crisis, the company, especially the PR team realized that its main problem
had been shortcomings in communications with the public, the media and other stakeholders. During the
re-launch of Maggi, the advertising videos had a happy and cheerful feel/appeal with people of different
age groups celebrating the comeback of Maggi. Also, it ensured that the designing and labeling
department strictly abides by all the rules laid by FSSAI regulations.

3rd Answer:
(3a)

If I act as a whistleblower against my company, I am being disloyal to the employer, but at the same time,
it’s my first moral responsibility to be loyal towards the society. Loyalty is a powerful ethical value that can
stop a would-be-whistleblower from coming forward. There are so many instances where loyalty trumped
higher ethical values, such as honesty and integrity, which led to consequences such as non-disclosure of
financial fraud/business relations with borrowers were not disclosed and nepotism was prevalent (e.g.
Enron and WorldCom) with disastrous results for shareholders.

The following are some of the ethical reasons for whistleblowing:

Integrity Trumps Payouts: Whistleblowers are often encouraged by their own personal sense of integrity
and a genuine desire to protect the public or society at large. Many individuals raise concerns regarding
unlawful and unsafe practices at their workplace because they are not willing to participate in something
they believe is illegal or hurts moral values, even though blowing a whistle against their
employers/managers/colleagues may negatively impact their careers.

Whistleblowing as an Ethical Obligation: Most employees/executives blow the whistle/ speak out
since they genuinely believe they have an ethical obligation to do so. It is also practical for them to do so,
since a negative impact on society may sooner or later impact their business.

These individuals act at a great personal and professional risk to bring the wrongdoings to limelight, and
in most cases they always face serious retaliation from their companies, government or employers.

The retaliation may be in the form of discipline, demotion, termination and sometimes are even killed.
Employers are usually unfair to characterize whistleblowers as disloyal employees holding a grudge, and
industry groups usually complain that rewards systems initiated by government encourage whistle
blowing and disloyal behavior. Whistleblowers are often conscientious individuals acting on behalf of the
public, with no intention of getting a financial windfall.

While whistleblower awards programs are not motivating enough for many whistleblowers to come
forward who were not already determined to speak out, they still serve a crucial function. These reward
programs indicate the employees to act as the eyes and ears of the society, and also provide meaningful
compensation for some whistleblowers who assist with crucial information in major investigations.
Fortunately for the public, most whistleblowers don’t require a big payout to blow the whistle– their
courage and integrity is enough.

Avoid negative consequences: On many occasions, the unethical behavior is way more serious than
cheating on a test or not paying back money that they owe someone. Many innocent lives are harmed by
the wrongdoings of others on a daily basis. For instance, all the financial scams we hear about in the
news impact the interest and deposit rates for middle-class population in India, thus making their lives
difficult. A lot of lives have been ruined and made difficult by crooks and frauds! So, I believe it’s better to
blow the whistle as it helps to avoid the negative consequences for a lot of people and also discourages
fraudulent activities from many people. But before that, a whistleblower needs to ensure they do their
research - especially the dos and the don’ts.
3b.The following could be the reasons to study ethics that could make good business, managers and
society.

Good managers: The study of ethics is an invaluable tool when entering the workforce in your chosen
career, especially at higher levels of management where important decisions are usually made without
considering the damage it may have on society, natural resources and local communities

As a manager, it also requires you to empathize with others and use your people’s skills. So, I think it is
imperative, as in the future we all will be in a position of decision-making which may affect certain
stakeholders in a way or another. So, having a good background in ethics studies is significant.

Operational efficiency: Efficiency increases when organizations invest in eco- efficiency in ways
relevant to their business reduce waste, optimum use of raw materials and reduce carbon emissions. This
saves the environment as well as money.

Profitability and Value: CSR also increases company accountability and its transparency with
investment analysts, media and shareholders. This in turn enhances its reputation among investors such
as mutual funds that integrate CSR into their stock investment decisions. As a result, the company's stock
value increases and its access to investment capital are eased. By reports mentioning their sustainability
initiatives, companies can strongly convince potential sources of equity that they are competitive and
lower-risk investments.

Reduction on legislative costs: Proactive environment strategies result in decreasing cost related to
current and future legislations.

Reputation: A company adopting a transparent CSR policy providing all the information on the internet
generates goodwill and enhanced reputations that reduce a risk of boycotts and minimize negative press.

Makes a good society: Business ethics are beneficial for the company by attracting customers, investors
and employees) But that’s not all. When a company cares about its behavior, impact and environmental
footprint, it’s also better for society overall.

Risk management: Most of the natural raw material comes from agriculture and forestry. By adopting a
zero deforestation policy, a resource base made for sourcing natural raw materials is made more secure.
This helps them to avoid the variation in raw material pricing and also remove the operational and
reputational risks associated with unsustainable farming practices. It also offers growth opportunities for
smallholder farmers and small-scale distributors. Moreover, transparent information about the source of
raw materials, production process and alliance certifications is made available on product packages and
company websites, leading to enhanced reputation of the company as well as increased sales.

Conclusion: Hence, we can conclude that ethics such as honesty, integrity, and moral responsibility can
help avoid negative consequences of wrongdoings and studying business ethics enable businesses and
managers practically implement the ethics making it a win-win situation for the society as well as the
companies and shareholders.