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Question of Corporate citizens' accountability

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Governance

My posting a link to this comment on the non-professional methods adopted by BBMP to collect property tax dues (going by BBMP's claim) from WIPRO, on OneBengaluruGoogleGroup, led to the following exchange with DV (incidentally, a journalist):

DV: It is true that Wipro is evading tax. Mallya owes 10 Cr as property tax, even after devaluing UBCity ... looks like BBMP lost the chance to beat drums there!

Me: The question very simply is why is it that the BBMP isn't locking up these premises if the owners actually owe that kind of money.

DV: Wipro is in court - there's a stay. All big guns bring a stay, and it goes on for years and years!

Me: Courts don't grant a stay unless a prima facie case is made out

DV: Not necessarily... we know how the judiciary works :-) They can bring an interim stay on request and drag the case on and on. There is corruption everywhere - in judiciary too - we just don't talk about it in open.

Me: I know there's corruption in the judiciary; but it's still a lot better than many other institutions. Now, if you go on the assumption that "there's corruption everywhere", then there's no point in coming onto platforms like "OneBengaluru", which is essentially for figuring out solutions to existing problems, and not for market gossip. For instance, do you have facts and figures about what Wipro owes the BBMP, or even Mallya?

Now, Wipro has a fairly clean image, and that's how they have even dared to take BBMP to court for defamation. And, the fact remains that BBMP couldn't substantiate their claims in the court even after sufficient notice had been given. It is essentially these inept ways of the BBMP that has to change, and our job should be to damand that. Their ways are allowing many others get away not paying taxes. They take on Wipro because Wipro generally refuses to pay bribes.


DV: Well. The problem is, when we ask, none from Wipro is ready to speak about their version. If you know anyone who might speak regarding this, please give us the contact, as otherwise our story will be one-sided. Coincidentally I was working on a story on property tax when this mail came in, and had spoken to BBMP, but Wipro PR hasn't responded to our queries. I don't know any other insider who can speak, contacts will help.

Me: Yes, you have a point there. Not many corporates like to be totally transparent - obviously they too have a few things to hide. But, most of it comes out of government's own doings. For instance, if this property tax collection is professionalised, no Wipro or Mallya, or for that matter any of the big mafioso, can get away avoiding/ delaying paying taxes - that's all there's to it. But, the mafioso within the BBMP is desperate to protect its vested interests, and that's why it's not happening.

I know a senior official in Wipro. Let me see if I can get him to connect me to the right person handling the issue. I'll revert.

Subsequently, I spoke to this fairly senior person that I know in Wipro, and thereafter mailed the Head of Corporate Communications (whose mail id was furnished to me by the senior person), asking for their version of the story. There has been total silence inspite of repeat reminders.

Yes, Wipro can maintain a stance of who the hell is DV or me to snoop into their matters. But, as a responsible Corporate Citizen, doesn't WIPRO owe it to the people of this city to tell them what their stance is in the matter of alleged property tax non-payment, which tax helps maintain the city?

Muralidhar Rao

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murali772's picture

perhaps we need to ask Wipro to recue BBMP

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City-based software exporter, Wipro has been named ‘World’s Most Ethical Company’ by the Ethisphere Institute for the fourth straight year.

A statement from Wipro said the award recognises organisations that have had a material impact on the way business is conducted by fostering a culture of ethics and transparency at every level of work. “We are happy to be recognised by Ethisphere for the fourth time in succession. We see this as a reaffirmation of what we stand for,” Anurag Behar, Chief Sustainability Officer of Wipro Ltd said.

Ethisphere Institute generates scores in five categories: ethics and compliance programme (35 per cent), corporate citizenship and responsibility (20 pc), culture of ethics (20 pc), governance (15 pc) and leadership, innovation and reputation (10 pc).


For the full text of the report in the New Indian Express, click here.

Now, why would a company like that try to avoid paying property tax dues, as claimed by BBMP, particularly when the so-called dues whatever are none too significanr for the kind of profits the company makes? Very obviously, the problem lies in the lack of professionalism in the various aspects of BBMP's management, more on which is discussed here. The answer perhaps may then lie in BBMP outsourcing its accounts management, to begin with, to Wipro.

Muralidhar Rao
murali772's picture

Apparently, World Bank had once banned Wipro

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Now, even as I made the above post suggesting that Wipro, the "World’s Most Ethical Company" as chosen by the Ethisphere Institute, be asked to rescue BBMP, and posted a link to it on a Yahoo-group, a member responded with this link to a Hindustan Times report dated 13th Jan, 2009, which interalia talks about a ban on Wipro (amongst others) by World Bank for "following corrupt practices to bag deals". The relevant excerpts are reproduced below:

After Satyam’s fall from grace follow revelations of the World Bank banning India’s third largest software services firm, Wipro, for following corrupt practices to bag deals. The bank said Wipro was one of the six companies and individuals “debarred along with their affiliates under the Bank Group’s corporate procurement programme”. It said Wipro had “provided improper benefits to Bank staff” — which was one of the reasons cited for imposing a similar ban on Satyam Computer Services for eight years.

In it's defence, Wipro had stated as below (as reproduced from the same report):

Wipro said the charge is related to allotment of 1,750 shares worth about $72,000 to employees of the World Bank in the company’s maiden offer of American depository shares (ADS) in 2000 at the issue price. “Wipro representatives offered the World Bank, through its chief information officer and a senior staff, participation in the (ADS) programme and they directed this offer to members of their family and friends,” the company said in a statement. “All participants in the programme signed a conflict of interest statement that their purchase did not violate any ethics or conflict of interest policies of their company.” Wipro further said “to date, Wipro’s revenue from World Bank is insignificant. Our inability to get future business from World Bank will not adversely affect our business and results of operations.”

Well, that was in 2009. Perhaps, Wipro has mended its ways from 2001, going by the fact that it has been in the reckoning of Ethisphere Institute, since then.

Muralidhar Rao
murali772's picture

Need for professionalism in place of drum-beating

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Incidentally, I got an opportunity to bring up the matter of BBMP's drum beating tactics to collect property tax dues, with Mr Siddiah, IAS (retd), the then BBMP Commissioner, who is presently one of the panelists in the Sri B S Patil (IAS retd) headed committee for making suitable recommendations for re-structuring of BBMP, which had organised a public interaction session at the Mayo Hall, yesterday. My submission was that with Wipro being chosen as the "World’s Most Ethical Company" by the Ethisphere Institute, for the fourth straight year, it seemd illogical that they would want to avoid paying tax dues, and as such, the whole issue perhaps reflected on BBMP's unprofessional procedures and processes. And, I went on to suggest that perhaps BBMP should engage a company like Wipro to help professionalise its financial and management systems.

Mr Siddiah, in his brief response, seemed to hold his ground, and continued to accuse Wipro of using various loop-holes to avoid paying the dues. Now, tax avoidance is totally legal, not evasion, and that's perhaps how Wipro has got its way in the matter with the judiciary.

Well, there again comes the matter of professionalism - has the BBMP bothered to close the loop-holes, so that the avoidances are eliminated in future atleast? Perhaps, the best advice can come from Wipro itself, who, though will then require to pay the full extent of taxes, will gain ten times that amount through their consultancy billings on BBMP, even as BBMP gains a hundered times the amount, evaded and avoided by others, all these years. Eventually, a win-win for all.
 

Muralidhar Rao
Promod Kapur's picture

Need for professionalism in place of drum-beating

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I am afraid Murali, getting a cetrtificate from  Ethisphere does not mean that an institution is totally ethical in its dealings. And let me hasten to add that BBMP is the least ethical in its dealings with citizens, who they are meant to SERVE. Having established this balance, let me state that  I have had the occasion to deal with Wipro who also have their office in Koramangala and with great difficulty we were able to get them to disassociate from managing a park. It was infact total abrogation of their committed responsibility to maintain the park that led us to get them out. And they made no bones about not bothering what happened to the park and security. In fact they were cussed in their attitude. Not to say that I dont admire WIPRO on several counts, but to say that they have got a certificate from Ethisphere and therefore are above board is fallacious. Also remember how one of their buses abused and almost ran over late Mr. Zafar Futehally on 8th Main when he tried to persuade the bus driver to drive carefully in residential areas? I wrote a letter to them, addressed it to even the top gun, and they did not even have the courtesy to acknowledge leave alone reply. So much for their ethics.

But I see your other point that BBMP could use services of professionals to get their records of properties updated and outsourcing to a competent company like WIPRO may not be a bad idea. Private sector may be more efficient than BBMP, but I am afraid private sector is also not always above board either.

 

Major Kapur

murali772's picture

ethical TISCO?

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Three Indian companies Wipro, Tata Steel, and Tata Power have been named among the World's Most Ethical Companies by the Ethisphere Institute, a global leader in defining and advancing the standards of righteous business practices. The designation of "World's Most Ethical Companies" recognises those organisations who truly go beyond making statements about doing business "ethically".

For the full text of the report in the Economic Times, click here.

Now, even as that report got published, there appeared this report in "Tehelka", which is highly critical of Tata Steel (TISCO), largely from the point of view of supposedly depriving Jamshedpur citizens of the basic civic amenities by denying the city the right to have an elected municipal body. I was most surprised to read this since the impression I had had, from my reading so far (I have not visited the place), was that it was a model city. The readers' responses largely confirm this too. As such, if at all there are shanty towns in the overall city limits of Jamshedpur, they must be in the areas not coming under the governance of TISCO. As to why this should be so, when TISCO can very easily take care of the entire city, perhaps one needs to look for the answers in the state politics. And, now with a stable government in place, and the changed outlook of the politicos, hopefully, things should improve, benefitting all the citizens equitably.

The above apart, what could be of concern are the reported air and river (Subarnarekha) pollution, supposedly caused by TISCO. Yes, there are far worse polluters in the country, including PSU's like Coal India. But, Tata's can't take shelter under that, all the more so now, since they have been recognised as amongst the most ethical companies in the world. 

Muralidhar Rao
havan3's picture

TISCO and Jamshedpur

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I lived in Jamshedpur in 1961 for 1 year.  The city administration was run by TISCO through a Town Department set up by them.  It was efficiently run and was a model city from a civic point of view.

I read long ago that TISCO handed over the civic administration to the Government at some point in time.  If that is so, TISCO cannot be blamed now for what you write.

 

Hiroo

 

murali772's picture

not my views, Sir

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Hiroo-ji namaskar. Firstly, welcome to PRAJA. Now that you have posted your first comment, in addition to reading many of them (as you have told me), keep them coming, so that Prajagalu can benefit from your wisdom garnered over years of rich experience in various fields. 
 
And, Sir, the writing was not mine. I was just pointing to the report in Tehelka, the total veracity of which, I myself have expressed doubts about, particularly going by the views expressed by the readers, almost totally opposed to the authors' views.
 
Praja however is open to fresh inputs, if anyone can provide them. 
 
Muralidhar Rao

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