Employee Caught Cheating Overseas: How Should We Handle This Without Hurting Our Reputation?

Dear Friends,

One of our employees on an overseas assignment has been caught manipulating accounts and cheating the company. A few documents have come to light which show the manipulation and dishonesty. How should we handle this situation?

Should a police complaint be filed, or should he just be packed and sent back? Please suggest how to handle this so that the company's image is not sullied, and at the same time, the message is sent that one cannot get away with misconduct.

Thanks,
Anil K. Chopra

Dear Anil Chopra,
· First initiate quick and through investigation of fraud. Dig as deep as possible to establish the extent of damage and loss and involvement of others (if any). Your action against fraudster will depend upon the extent of damage and loss.
· Try and collect as much proofs and evidence to nail the fraudster.
· Do above things with utmost secrecy.
· Try and catch fraudster by surprise, giving him no time to think and hide things.
· Ask him to confess his wrong doings in writing. Extract confession by giving threats of serious action, police case etc. Lure him to confess by falsely committing that he will not loose his job and no police action will be taken, in case he confesses in full.
· His colleagues, bosses may try to underplay the fraud and hush-up the things as some blame may come to them. Just ignore them.
· I am assuming that, fraudster being on overseas assignment must be senior employee (manager/officer/engineer) and will not have any protection from any labor law.
· Involve your higher-ups in whole process.
· Depending upon extent of damage decide action. Either terminate or ask the fraudster to resign.
· Make sure fraudster agrees to pay back money made by him with interest. Rather collect it from him.
· Let hire-ups decide on the police action. Police will not accept FIR easily. They will be lured only if amount of fraud is attractive or some other attraction is there.
Thanks & Regards

This employee must be asked to go. He'll willingly do so once legal action is suggested for the malpractices.

Dear all,

Two ways to handle these situations are: (i) To punish the culprit - so that the same will be an example setting to other employees, e.g., police complaint, proceeding with court cases, etc. (ii) To find out the actual problem (internal circumstances) which led the employee to do so. For example: financial issues, non-payment of salary on time, bad management, etc., and then try to sort out the issues by having a detailed discussion with the said employee. Find out the epicenter of the problem and then make a decision, whether to punish the employee or take corrective actions so that the same may not be repeated again in your concern. I suggest the second option will be better to prevent such issues in the long term.

Best wishes,

P.K.M.Kumar, Manager Legal, Bangalore. 09379770903.

Has this person broken the law in the country that he's working? If so, you may have an obligation to refer this to the local authorities, as well as take action yourselves.

Dear Akcind,

If there is a misrepresentation done by the said employee in regards to the company with a third party, or if the name of the company, assets, or position of the said employee has been used for personal benefit by representing or providing malicious information, thus causing a third party to do something they otherwise wouldn't have done, and such act or omission of the third party causes the company to be liable.

If either or both of these actions have occurred, you need to report the incident to the local law enforcement authority to protect the company from liability for the wrongful acts of the individual. You may terminate the person immediately based on the proof accumulated.

If the above incident has occurred outside India, then deport the Indian employee back to India and proceed to have the individual resign. If they wish to contest the case in a court of law, they will have to do so in India.

Regards,
Octavious

Three steps to be taken:

1. Recover the amount of money lost by assessing the exact loss.
2. Initiate disciplinary action that may lead to punishment, including possible dismissal.
3. Initiate criminal action as per the Indian Penal Code (IPC) or any applicable laws, especially since the individual is in another country.

The proper procedures must be followed, and no actions should be taken hastily.

Dear Love,

All legal options are open to you, if it is not a critical situation. But if it is not critical, you might not have asked for advice. If the situation is most critical, discuss the issue directly with the top management before any legal action against the gentleman and do not disclose this to anybody, even to your superiors.

There is a real story in the corporate world, and both the companies are existing; hence I do not disclose the name of any company but give you the details about the story.

A big company having a turnover in a few hundred crores had a general manager (GM) who was working with the company for many years. He was making money from raw material purchase, and the Chairman cum Managing Director (CMD) was aware of it, but he used to ignore it deliberately, as the GM was so capable and influential in the trade. The GM has poured his blood for the growth of the company, and with his great efforts and skill, the company could reach the monopolistic era and enjoy a sound position and fantastic growth.

An elder son of the CMD returned from his abroad study in management and resumed the company as director of finance. One day he found something fishy while the GM was talking on the phone in his chamber. That doubt led him to an investigation, and through inquiry, and after two months of exercise, he found some documentary proof against the GM.

He went to his father and briefed him about the fraud by the GM, and his father told him that he knew it for years, hence no need to worry about. But the son was educated at the best university in the world and argued with his father. Finally, the father left the decision to him.

The son attended the very next board meeting with all the proofs he had and asked the board of directors to take punitive actions against the GM, and finally, it was decided to sack the GM with immediate effect.

The competitor company, when they came to know about it, immediately offered double the salary to that GM and recruited him as director of sales. Today that competitor company is the number one company in India, and the once number one company is pushed to the number two company.

If you are close to some senior executives, you will know the name of the company and the GM I am talking about.

Hence deal with the situation after due analysis. Know how important the employee is for the company. Know the present losses versus future losses. Know the possibility of replacement and its consequences. Know how big the fraud is. Know the ways he made this fraud. Improve your system and introduce more checks, so that the same or similar situation does not arise in the future.

If the situation is not critical, you may go ahead with legal action as per the advice of your legal department or consultant and recover the losses and also terminate his services.

His Blessings,

Sharad Shah