I have been at Big 4 firms for almost my entire career spanning more than two decades. Things were in the usual steady state till mid of 2017 when I noticed some unethical crap happening, and for some inexplicable reason I blew the whistle. I had been in the system long enough to recognize that Deloitte was not very serious about ethics, but little did I know that its ethics program is really a booby trap, and I was blown away.
In middle of 2017 Deloitte concluded the acquisition of BMR. Almost the entire tax team of BMR became part of Deloitte India. One of the partners who came to Deloitte as part of this acquisition was Parul Jain. I had mentored Parul in the early 2000s when she had started her career with PwC. I could see that a lot had changed in her, especially after being part of BMR, which really was a new brand for the Arthur Andersen (which I will lovingly call AA) team post the Enron saga. She had imbibed the culture of AA that nothing that gets revenue is prohibited.
Ethics Concern №1: Data Theft at Nishith Desai Associates
Parul was also very close to a very high profile partner Shefali Goradia who had also come to Deloitte as part of the BMR acquisition. I found out that both had worked together at another law firm Nishith Desai Associate (NDA) before joining BMR. Shefali had convinced Parul to join BMR with a promise of accelerated promotion to partnership if she came to BMR with confidential documents of NDA and helped BMR poach its clients. Parul had taken this offer and had stolen confidential data of NDA including that of its clients that was marked confidential and attorney client privileged before she left NDA. Shefali and Parul had subsequently poached many of the NDA’s clients and Parul was rewarded with an accelerated promotion to partnership in BMR.
There was another person who was a witness (whose identity I have promised to keep confidential and will be referred to as ‘witness’ in this story) of this criminal and unethical act, and both Parul and Shefali made a desperate attempt to erase any evidence that that person had. I counseled Parul to not play with fire and to not indulge in such unethical practice. But her acculturation had happened in BMR. She also felt that she had to prove herself in Deloitte and was even more determined to continue on the unethical path. Another senior partner was also pepping her to do so.
I proceeded to report this on the internal ethics portal of Deloitte India through an anonymous ethics concern. I did not hear back from the ethics team for a while. The ethics team acknowledged my ethics concern after two weeks and informed me that it was looking into the matter and that it takes such matters seriously.
Tardy Response of Deloitte India’s Ethics Team
Just 2–3 weeks after receiving this canned response from the ethics team I learned that Parul Jain was representing Deloitte at the prestigious IFA Congress in London. This was confirmed by another colleague who was attending the conference. That colleague also told me that Parul was indulging in heavy duty business development activity in the conference targeting many of the NDA and BMR’s clients and spending significant time with one of the founders of BMR who had not joined Deloitte. This came as a shock to me and showed that the ethics team was not working seriously on my ethics concern. I immediately wrote to the ethics team.
Attempt to Find My Identity
The ethics team responded and told me that they were looking into my ethics concern. To my utter shock, it asked me for a meeting or a phone call. While the ethics team assured me that they have a no retaliation policy against whistleblowers, I was not comfortable disclosing my identity. I had this apprehension that I being an employee of Deloitte, it could really destroy my career for opening this can of worms. There was a reason why there is a provision of reporting anonymously on the ethics portal and there was no justification why the ethics team wanted to meet me and know my identity. What else could be the reason?
Connecting with the Witness
But my witness was not part of Deloitte and consequently it had no leverage over him. They could do nothing against him. At most they would disclose his identity to people involved in this ethics breach, but the odds of that were low because that would tarnish the reputation of Deloitte and destroy the facade of its ethics program. Anyways, the witness was far better informed about the ethics breach than I was. So I convinced the witness to have a conference call with the ethics team. The ethics team also assured me that the identity of the witness shall be kept confidential.
A bridge was set up and the ethics team spoke with the witness. I was obviously not a participant in the conference call. I only know that the ethics team asked the witness to share the evidence of the ethics breach. As per the witness he did so.
The Mysterious Exit of Parul Jain
After this conference call there was a radio silence on my ethics concern from the ethics team. However about two weeks post this call, Parul Jain suddenly stopped coming to work. There was a mystery surrounding this as there was no formal announcement. Some of the associates at Deloitte were under the impression that she was on leave. While some others who worked closely with her were told that she had quit. This was very surprising that she had quit so suddenly and without serving the notice period! It was only a month back that she was representing Deloitte at the prestigious IFA Congress in London. Shefali Goradia continued at Deloitte, however.
Ethics Concern №2: Conflict of Interest in IL&FS Scam
While pursuing this ethics concern I had figured out that there was more to it than theft of confidential data. I realized that some of the clients serviced by Parul Jain and Shefali Goradia were beneficiaries of the IL&FS scam. IL&FS scam is one of the biggest scam to be reported recently in India. Deloitte’s role as an auditor of IL&FS is under the scanner and being probed by various statutory and regulatory bodies in India.
A real estate company Silverglades is named as the primary beneficiary of the IL&FS scam and is a client of Parul Jain. Silverglades had colluded with the executive management of IL&FS to procure debt and equity financing by bypassing risk management processes, and this eventually turned into an NPA because Silverglades is undergoing insolvency proceedings. Parul had advised Silverglades group to set up Cyprus based offshore shell entities which were used to siphon off these funds from IL&FS. Hence there is a clear case of conflict of interest and independence issues for Deloitte which was also an auditor of IL&FS. Deloitte should have disclosed this conflict of interest, which it had failed to do.
Similarly, Ind-Barath Power Infra Ltd is another beneficiary of the IL&FS scam. This company and its investors Sequoia Capital, Bessemer Venture Partners and UTI VC fund are clients who have been serviced by Shefali Goradia and Parul Jain. Therefore this was another example of conflict of interest that Deloitte had failed to disclose.
I therefore filed another ethics concern raising this conflict of interest issue. This ethics concern met with the same fate as the earlier one. I got a canned response from the ethics team more than a month later acknowledging my ethics concern and that Deloitte takes such matters seriously. Few days later, I started getting pressurized to reveal my identity and the ethics team strangely asked me to provide some documents pertaining to the IL&FS scam which have been in the public domain. In short even this ethics concern was buried.
The Blatant Cover-up & Hounding of the Witness by Deloitte and NDA
This second ethics concern pricked Deloitte very badly. It appears that Deloitte traced the identity of my witness and got in touch with NDA. A blatant effort was made to suppress this matter and destroy all evidence. It was also critical for NDA to destroy its data that had been stolen as it revealed to illegal structures in tax havens it had helped its client form in order to evade taxes and do money laundering. NDA along with PwC (the stolen data also had some documents belonging to PwC- remember that Parul Jain worked in PwC prior to NDA) forcibly entered the house of my witness and ransacked it. It took away all his electronic devices in order to destroy all evidence that he had. I don’t know too much details of this raid and what happened with my witness subsequently, because it has been very difficult to communicate with him because all his electronic devices had been taken away, he also was reluctant to speak to me, perhaps because he believed that I was behind this raid or he was worried that NDA and Deloitte were snooping, and also because of the lockdown due to COVID pandemic. I also learned that Parul Jain had joined NDA after she had quit (or fired from) Deloitte. This came to me as a shock that a firm whose data she had stolen had reemployed her! I also came across this video that shows the bonhomie between NDA, Shefali and Deloitte even after so much water has flown under the bridge.
My Harassment by Deloitte and Exit
I have a strong apprehension that Deloitte was also able to find my identity. Around the time my witness was raided, I started experiencing harassment at work and was being targeted. This harassment reached another level during the lockdown. I was getting a feeling that grounds were being created to fire me or implicate me in order to discredit me. The harassment became unbearable and I already had a bad taste due to my nasty experience with the ethics team. Few months down the line I quit Deloitte and became an independent tax consultant.
Email to the Global CEO and Chief Ethics Officer of Deloitte
After quiting Deloitte and giving some time for detoxification, I wrote an email to Punit Renjen, Global CEO of Deloitte and Glan Stastny, Global Ethics Officer of Deloitte. In that email I narrated my horrific experience with the ethics team in Deloitte India that forced me to quit. Here is the text of the email:
Subject: Deloitte’s ethics program and prosecution of whistleblowers
Dear Mr. Renjen,
I am compelled to write this letter to you to express my utter dismay on the unethical practices which are prevalent and are being encouraged in Deloitte. More specifically, there is no sanctity of the ethics program left. I have given some of my best years to Deloitte but I had to quit after it became too unbearable to continue.
Middle of last year, I had reported on the online ethics helpline some serious unethical practices by two of the partners in India. I had anonymously raised that concern (ref: 331037840902) and provided information on how these partners had stolen confidential data from another firm where they were employed earlier and thereafter misused this stolen data to win business for Deloitte. Initially, I only received a standard response that the firm takes such ethics concerns seriously and my concern will be investigated. But no action was taken against the partners and it was business as usual for them.
I was dismayed at how my ethics concern was languishing and I expressed my dissatisfaction. At that point, I was asked by the ethics helpline team to reveal my identity and meet the ethics team. I was shocked at this request. Because the ethics team appeared to be looking for some way to corroborate my allegations, we finally agreed that I will connect the ethics team with a third person who was a witness of and had documents to prove the criminal acts I had reported, provided that the ethics team will do so in a manner that the witness remained anonymous and his identity was protected. Thereafter, the ethics team spoke with this witness and got the documentary proof it was seeking.
Few days later one of the partners stopped coming to the office, but the other one continued to. The documentary proof also revealed a conflict of interest for Deloitte because it showed that these partners also were servicing some clients who were beneficiaries of the IL&FS scam in which Deloitte’s role as an auditor was also under the scanner. I raised this conflict of interest concern (ref: 576839803702) with the ethics team. And few days later I got another canned reply.
I came to know around this time that one of the partners who had stopped coming to the office had quit Deloitte and had surprisingly joined the same firm (namely NDA) from whom she had stolen the data. The ethics team had somehow found the identity of my witness, perhaps by doing some electronic tracing. It got together with the partners against whom I had filed this ethics concern and the firm whose data had been stolen, i.e. NDA, and started a cover up operation. NDA entered the house of the witness, ransacked his house and took away all his electronic devices. NDA then tried to destroy all the evidence. Needless to say, after this happened, my witness believes that I was responsible for all this.
It appears that the ethics team also found my identity, and I started getting targeted at work. I had to quit few months down the line.
This is really shocking. In particular, I am appalled by the manner in which the ethics program is being run. One might accept if the ethics concerns are not acted upon, but it is certainly unacceptable that the ethics team is only interested in finding the identity of the whistle-blowers and thereafter going after them. You, being the global leader, need to take responsibility for this.
All these years that I was at Deloitte, I saw that the level of ethics was quite low. But I never anticipated that this is how the ethics program and the helpline are being run. May be what happened in my case was due to few bad members who are part of Deloitte India, but very likely this is true for Deloitte globally. I hope you will look into this matter and prove my perception wrong.
I received a response from the Deputy Global Chief Ethics Officer more than a month after I had sent my email. My grievance was assigned to the Deloitte India’s Ethics team, the same team against which I had complained. It is like asking a thief to probe itself. Here is the reply:
Your message to Mr. Renjen was directed to me as Deloitte’s Deputy Global Chief Ethics Officer. I wanted to confirm receipt of your email and thank you for reporting this matter. Deloitte takes ethics matters seriously. Because your concerns relate to Deloitte India, this matter will need to continue to be handled by the Ethics Officer for Deloitte India. We have coordinated with the Deloitte India Ethics Officer regarding your email and we understand that Deloitte India has appropriately inquired into your allegations. The Deloitte India Ethics Officer will be responding to your email separately.
I concurrently received an email from Deloitte India’s Ethics team which shamelessly stated that it had closed my ethics concerns and denied any collusion with NDA. Here is the text of the shameless reply from the Deloitte India’s Ethics team:
We refer to your emails/communications in which you have anonymously raised certain concerns.
We observe from your email dated 15 December 2020, that you have for the first time also raised certain new issues with us. We neither know your identity, nor did we try to ascertain your identity or that of ‘your witness’. Therefore, there is no question of having targeted you or ‘your witness’. There was certainly no cover up operation as alleged by you. There are also certain matters raised by you relating to a third-party action, which we are not aware of.
All the concerns raised in your complaints i.e. 331037840902 and 576839803702 have already been duly inquired into. We have concluded the inquiry and note that none of your allegations has been substantiated. The case stands closed.
As indicated to you, we take matters of ethics seriously and take action, as appropriate.
I responded to the Deputy Global Chief Ethics Officer with the following email:
Thanks you for your email.
My grievance was against the ethics program of Deloitte India. It is unfortunate that the Deloitte India Ethics team has been asked to enquire into this complaint which is directly against it. No useful purpose is being served by having an accused investigate a complaint against itself.
Not surprisingly I received a response from the Deloitte India Ethics team immediately after receiving your email. They have dismissed my complaint and the earlier ethics concerns without stating any reason whatsoever. I am placing my objections on record to the manner in which my complaints and concerns have been dealt with:
1. As per Deloitte India Ethics team they have never tried to ascertain my or my witness’ identity, nor are they aware of it. That this is a blatant lie can be ascertained from the logs of my earlier ethics concerns where I have been asked multiple times by the ethics team to meet physically even when there was absolutely no need for that. Unfortunately my witness was too naive and he committed the grave mistake of joining a conference call with the ethics team from his own phone number. He dearly paid for this lack of caution and ended up getting trampled by the law firm (NDA) whose data had been stolen. To be perfectly honest, I am least bothered with the fact even my identity was discovered and I was targetted at work. Now that I am out of Deloitte it does not matter anymore.
2. As per Deloitte India Ethics team there was no cover up operation. I find that hard to believe that one of the partners reported in my first ethics concern namely Ms Parul Jain stopped coming to work a week or so after my witness had shared evidence of the ethics breach. This happenned so suddenly and none of the other associates in Deloitte India had any clue of this. The reply of Deloitte India Ethics team is even more incredulous in this respect because Ms Parul Jain immediately joined the same “third party” law firm NDA whose data she had stolen. NDA also ransacked the house of my witness in order to destroy all the evidence.
3. As per Deloitte India Ethics team they are not aware of the “third party” action i.e. action by NDA. I am told by my witness that NDA itself admitted to him while ransacking his house that it was in touch with Deloitte India in the context of this episode. Given the sudden exit of Ms Parul Jain, her immediate joining NDA and the coercive action by NDA, I find it hard to believe that Deloitte India made no contribution to the action by NDA.
4. As per Deloitte India Ethics team they have closed all my concerns and complaints after duly inquiring into them and finding them to be unsubstantiated. This just shows how seriously they have taken my concerns. My witness had provided irrefutable evidence in support of my first concern. The exit of Ms Parul Jain and the coercive action against the witness proves my ethics concern. The role of Deloitte India in the IL&FS scam is a matter of record. The clients I had mentioned in the second ethics concern are clients of Deloitte India and beneficiaries in the IL&FS scam. So there is prima facie conflict of interest. It is prepostorous to say that my concerns are unsubstantiated. On the contrary they are beyond any doubt.
I am dissappointed that my complaint has been handed over to the Deloitte India Ethics team. I do not think I will achieve much by replying to their email as I know what fate it will meet. I had approached Mr. Renjen because I had lost faith in Deloitte India and was hoping that things are different at the global level. But the fact that you decided to transfer this to the Deloitte India team makes me believe that perhaps I am mistaken. I am requesting you to enquire into my complaint at your level. Otherwise I will conclude that it is all the same through out the Deloitte world and I should raise my issues elsewhere.
So that’s it! Deloitte’s Ethics program is a sham. It is a boobytrap for the whistleblowers. It’s a sick culture over there.
- There is an OP on reddit regarding this episode concerning Deloitte, Nishith Desai and Parul Jain:
2. Here is the transcript of my first ethics concern:
3. And the transcript of the second ethics concern:
4. The news story in The Pioneer titled India’s ‘Panama Papers’ on shell firms, tax loopholes gather dust
5. A related blog The Fall of Nishith Desai captures the Nishith Desai Associates part of this story.