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Monthly Newsletter

Volume VIII Issue 1


In its eighth year of operations, AuthBridge proudly re-launches its monthly corporate newsletter to share its experiences in this evolved Screening Industry. Much has changed in the environ; national laws, global compliances, Client perspectives, market dynamics making it imperative for the screening companies to evolve, innovate and be alacritous to match strides. The inaugural April issue features Mr Krish Shankar Executive Director, Human Resources, Bharti Airtel in the ClientSpeak segment sharing his views on Background Screening, its impact and evolution. Future issues will feature views from our other clients and experts. Through our monthly newsletter we expect to share with you the current happenings in the country and around the globe which either impact screening and due diligence norms or give a new perspective to how or what needs to be verified, complied to, screened to keep our organisations and our people safe within the constraints we operate under. We will also use this medium to keep you upto speed on Best Practices in Screening and share with you infographics on screening trends as they emerge with our regular analysis of our data. New products and services from AuthBridge will be showcased here. Your feedback will of course be extremely valuable in helping us evolve the medium to be effective and informative.

Content 1. News 2. Legal Update 3. A Point to Ponder 4. ClientSpeak 5. Best Practices in Screening 6. Screening Trends 7. Case Studies 8. Products and Services

News Stirrings within the Nation ‘Operation Red Spider’, the sting operation conducted by an online portal Cobrapost purportedly shows a number of senior executives of the three private sector banks verbally agreeing to take huge amounts of cash from an undercover reporter and putting them into a variety of long-term investment plans so that the black money ultimately is converted into white. The three private banks accused of indulging in money laundering both within and outside has revealed a money laundering scam.”Allegations do not mean flouting norms. There is not a single transaction which has taken place. KYC violations will happen in any system. These are all transactional issues and have nothing to do with money laundering,” said KC Chakrabarty Deputy Governor Reserve Bank of India [RBI] told reporters after a meeting with bankers on March 21. He further said, “There is no scam (that) has happened...As no transaction has taken place.” “Let us not unnecessarily downgrade ourselves. Our system to prevent money laundering is perfect, absolutely nothing (wrong with it),” he said.

Bitti Mohanty, the absconding-from-parole son of Odisha ex-DGP is finally arrested as an employee of State Bank of Travancore with a fake id and fake documents in Kerala and now taken back to Rajasthan for identification. The state police have charged a case of impersonation, cheating and forgery against Bitti. Bitti has been taken to the bank where he worked, the Chinmaya Institute of Technology here where he did his MBA using forged certificates and the places he stayed here. Police said they would again file a plea in the court for further custody as they planned to take him to Odisha for taking further evidence to confirm his identity. A police team has been to Odisha and questioned former Odisha DGP B B Mohanty, who identified his son through the photographs shown to him. Another team which went to Puttaparthi in Andhra Pradesh had also collected evidences of forgery from the documents they got from the flat where Bitti was staying before he moved in to Kerala. After fleeing jail in Rajasthan, Bitti had spent a few months in Puttaparthi, where he was alleged to have forged documents using which he enrolled as student in a private institution in Kannur and later obtained the bank job.

Global Ripples Three Nortel executives orchestrated a widespread multimillion-dollar fraud created history by decimating a nearly $300 billion worth Canadian company to it filing for bankruptcy in North America and Europe and selling remaining businesses piecemeal to various buyers within 5 years.

Russell Foundation, an Indianapolis-based organization founded in 2003 by Michael Russell, was ostensibly a religiously affiliated non-profit intended to provide community leadership and poverty relief. Michael Russell, age 54, pleaded guilty to 20 counts filed against him and admitted to defrauding an Indianapolis investor out of $1.7 million over the course of six months in 2007


Legal Updates Prevention of Money Laundering (Amendment) Bill has become law of the land with President Pranab Mukherjee giving assent to it. The Prevention of Money Laundering (Amendment) Bill, which seeks to enlarge the definition of money laundering offences and could help curb funding of terrorist operations, was approved by Parliament in the Winter Session. The Bill had sought to remove existing limit of Rs. 5 lakh as fine under the Act. It proposes to make provision for attachment and confiscation of the proceeds of crime even if there is no conviction so long as it is proved that offence of money laundering has taken place, and property in question is involved in money-laundering.

New FCPA guidelines sift out gifts from bribes - The US has seen a surge in the number of high-profile investigations into bribery and corruption in the last two years. The Foreign Corrupt Practices Act’s (FCPA) enforcement actions registered by the US Securities and Exchange Commission (SEC) includes 13 corporate cases and three individual cases in 2011. For 2012, the figure stands at seven corporate cases and two individual cases. The upsurge in investigations has raised concerns not just in the US but in India as well, given the close business relations between the two countries and the extraterritorial nature of the FCPA.

A Point to Ponder

AICTE declares ISB and IIPM with all its branches as unapproved institutions among 300+ others. ISB said the management programme offered by the institution “is one of the best courses in the country” and it need not have a stamp of approval from the council. “In fact, the ISB is accredited by the Association to Advance Collegiate Schools of Business (AACSB) and is the first business school in South Asia to be recognised by this premier global body. Since its inception, the ISB has been offering one-year courses which now became a norm with other schools like IIMs. The All India Council for Technical Education (AICTE) has issued a show cause notice to the Indian Institute of Planning and Management (IIPM), asking it why the technical education regulator shouldn’t initiate action against it. Footnote: Following a complaint from an IIPM business partner alleging “defamatory web material” targeting the “institute”, a Gwalior court last month ordered the blocking of 73 uniform resource locators (URLs).



Krish Shankar Executive Director, Human Resources, Bharti Airtel Leading the HR function in Bharti Airtel, a 10bn USD company since April 2007, Krish has successfully led various organization development and transformation initiatives, making Airtel among the best companies for leaders. Prior to Airtel, Krish, a Post Graduate Diploma in Personnel Management and Industrial Relations from XLRI, Jamshedpur, worked with Unilever for over 20 years, lastly as Vice President, Human Resources- Asia- Africa Region. Krish has over 25 years of professional experience in enterprise level roles, with a focus on change management, performance management, people alignment and driving the HR transformation agenda to deliver strategic value for the business. A keen runner, Krish’s other interests are reading, trekking & photography. In an exclusive interview with AuthBridge, Krish Shankar shares his views on Background Screening below: Screening: an effective tool to further risk mitigation strategy In a market environment like India where one in every 10 applicants is reported to be showing some kinds of incongruity in his/her resume, a thorough background check increases the objective information available to a prospective employer. Experience and trends prove that background screening acts as an effective tool to further risk mitigation strategy. Ineffective employee background verification process might increase possibility of fraud, dilution of brand/reputation and workplace violence. Acceptability and implementation of the employee background screening process has risen exponentially in last five years There has been an exponential rise in acceptability and implementation of the employee background screening process in the last five years as Industry encountered pitfalls of negligent hiring leading to drain of wealth. As per the reports, every 8 out of 10 employers complete criminal background checks on applicant before hiring them. A background check may uncover deception, can affirm an individual’s professional or personal integrity by validating information supplies and highlight any anomaly in criminal, employment and education history. Overall quality of hires has improved with reduction in error rate Considering its huge impact on the hiring process we have been over-cautious in designing and staging the background verification process along with being highly careful and robust in monitoring it. This has resulted in our error rate declining to 9% in FY 12-13 vis-à-vis 13% in FY 11-12 thereby improving the overall quality of hires. Experts estimate that hiring a wrong person can cost an organization between one and five times that person’s annual salary. In the last one year, because of robust pre-hiring checks, 10%-15% of error cases were terminated. Though there is a cost involved in including an additional step in the hiring process, however it represents a fraction of the cost of terminating an individual. Continued...


Critical to screen facts which contribute to 80% discrepancy The following 3 areas of background screening are not only critical before taking a hiring decision but also account for almost 80% of incorrect data supplied: • • •

Past Employment History – discrepancies found relating to tenure of employment to title held to compensation. Education Credentials – issues relating to fake certificates, incorrect period & course are most common Criminal Record Check – to avoid making a high risk decision which can have a long term impact

Education from institutions not recognized by Indian regulators but having Industry patronage is advisable to be considered given current times As we develop & enter into an era of larger private sector participation in Education Industry, we should see better interface, partnering & integration between different regulators & other Government Bodies. This would standardize & ease the whole recognition process and make it more relevant for current times. Therefore, in its present state or form where we have larger population seeking education vis-à-vis available Government Infrastructure supporting it, it is advisable to consider education from these institutions after validating the records. Networking Sites are best used to validate pre-screening results till they mature to mitigate legal wrangles We work in a dynamic business environment & fastest growing economies of the world. Businesses are expanding & availability of quality manpower is not in line with the growth. Hence the need of the hour is to come up with innovative ways for screening & verifying candidates to ensure legitimacy & quality. Amid security concerns, corporate scandals and workplace violence, pre-employment screening has been gaining ground. One of the recent trends is use of networking sites like Facebook & LinkedIn to establish common connections & verify the details being submitted by candidates. In its present form – it is being best used as a channel to validate results of pre-screening report being run by partners till it matures to a stage of mitigating the legal liabilities in case of unpleasant situations. We can also see financial credit history check playing a crucial role in times to come as data regarding this become readily accessible with required credibility. Economy of scale through trained staff, better utilization of paid data records and greater thoroughness and accuracy through advanced analytics are derived through professional screening services. Managing end to end background screening process internally may be a time consuming, costlier & operationally challenging activity. Professional screening company derives economy of scale through trained staff, better utilization of paid data records and greater thoroughness and accuracy through advanced analytics. In addition, background checking is highly regulated and therefore it is all the more challenging for firms to ensure regulatory compliance.


Best Practices in Screening What should your Background Screening Policy say? •

NAPBS offers the following best practices intended to benefit employers and job seekers who are planning for 2013:

Identify and categorise all risk parameters: •





Contractual Staff


1. Be Complete: Conduct a comprehensive background search to avoid negligent hiring. Relying on partial information or information that may be out of date can be as risky as not conducting a thorough background check at all. 2. Be Efficient: Time is a precious commodity especially for recruiters. Look for ways to utilize technology to help create efficiencies. Talk with your background screening provider about ways to improve your process to save you money and time.

Identify Sensitive Roles [High Risk]among employees

Identify physical or virtual resources which need to be protected

Identify at which stage of engagement the risk is

3. Be Thorough: As an employer, you have certain responsibilities under the law. Make sure that all background screening practices meet federal and state regulations as well as industry requirements. Be mindful of the new Equal Employment Opportunity Commission criminal guidelines and the Fair Credit Reporting Act.

to be mitigated •

Define the scope for screening

Identify steps how info for screening will be gathered.

Identify checks to be conducted

Define Severity Matrix with clear policy guide-

4. Be Analytical: Consider job responsibilities when screening candidates. Go beyond basic background information and assess job relatedness and business necessity.

lines for Action or Waiver •

Define procedure for Action

Define procedure for Waiver

Define Retention of records

Ensure Legal Compliance

5. Be Consistent: Develop a method for a targeted level of screening for each open job position to align with business needs and job relatedness.

Source: AuthBridge

Source: NAPBS

Screening Trends Data from 2011-12 has been analysed to show industry sectors with highest discrepancy percentage in Employee Screening Services. Next issue we will compare the 2012-13 data for these Industry Sectors to highlight any trend.


Case Studies Fake ID allows 6 years reprieve Six years after jumping parole, Bittihotra Mohanty, was finally arrested by Kerala police in Kannur. With a fake identity as Raghav Rajan, he got a job of Probationary Officer with State Bank of Travancore. Many questions arise from this one instance. • • • •

Did the institute from where he completed his MBA check the validity of the documents he submitted for admission? Do MBA Institutes and other technical institutes have a screening process? At what stage of his hiring-on-boarding process did the bank initiate the background check for Bitti? What documents were asked for the screening?

A standard background check on his education and police verification at his permanent address by the institutes and the employers during his 6 years would have revealed his fake education and his criminal past. The education document from Kalinga Institute of Industrial Technology being verified as fake would have stalled his future run and SBT & Chinmaya Institute of Technology at Chala would have saved themselves this unwarranted publicity and embarrassment.

Yahoo Blooper Scott Thompson stepped down from the post of Yahoo Inc.’s CEO after a misrepresentation was found in his academic credentials. Thompson’s resume mentioned a bachelor’s degree in computer science from Stonehill College which is, reportedly, false. This fake detail was reported to be present in Thompson’s bio-data even when he was a part of eBay, his previous employer. Would you risk your organisation’s credibility by hiring a leader who has proverbial skeletons? Would a detailed screening conducted on a leader’s past and current professional associations reveal other ‘misrepresentations’ ?

Product and Services AuthLeadTM An advanced background verification product designed exclusively for screening the senior-most of an organisation; this intense screening solution goes beyond the regular structured verification process to delve deep into individual’s professional associations at peer, subordinate and senior levels. Individual’s credentials are checked in all relevant databases, national & where applicable international. Driven by some basic client guidelines, AuthLead reports are a compilation of detailed research & interviews of references. As a highly customizable product, our consultants work closely with the client to understand the requirements and present a detailed dossier which allows the company to take an informed decision ensuring the individual is professionally capable for the defined role and is compliant to national and global regulatory and industry standards. Flags, if any, are reported.

A retail product from AuthBridge, IndiaVerify addresses the verification requirements of individual customers for domestic helpers, drivers, tenants and marriage partner. This online verification service allows AuthBridge the opportunity to serve the individual customer for securing their personal and domestic environs. Rise in the level of marital frauds and crimes committed by domestic helps, drivers and tenants, has heightened the need of a verification service of this nature. IndiaVerify eases the process of initiating verification for the individual.

AuthBridge Research Services Pvt. Ltd.

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Volume viii issue 1 april