Once upon a time long, long ago I used to be a practising Chartered Accountant. In 1988 I used to be at the ITAT (Income Tax Appellate Tribunal) quite regularly (definitely on Fridays when the department used to file its Reference Applications!). A few people who used to be regular thereat were some super seniors from D M Harish’s office, Mr. V Patil, etc. and some other seniors like Mr. Gautam Doshi.

Easy to approach, you could always ask him for some small favors….Surely after 33 years I do not think he will remember me, but I have fond memories of GD. Then I moved on became a member of National Stock Exchange and lost touch with people like GD on a professional basis.

Suddenly I saw that he had become a senior executive with Adag group.

I am a cash flow oriented  value investor. When I saw the books of the Adag group, it was very, very difficult to respect the group. However there are so many people at the top in that group that I could not believe it.

Not an appropriate time to name them, God bless them and hope they do not have to see the insides of a jail.

Where does the professional stop saying ‘I will do what my client wants’ or say ‘I will do what my employer wants’. In 1988 if some client had asked a Bansi Mehta or a Gautam Doshi to bribe an ITO to get an order, they would have been aghast. What makes them do things which are wrong?

GD is too intelligent not to have known what he was doing. Do we shrug and say ‘Arre these things happen in India?’ or do we take a stand saying ‘No, I will not do it’. I do not know. Thankfully in training there are no such calls. But the kids I train have to constantly battle between ‘what is good for the customer’ vs. ‘what is good for the manufacturer / distributor’. Tough choice for the kids. What happens when they do ‘what is good for the employer’ but get sacked when the regulator takes action against the distributor?

Will Adag continue to attract top flight talent or will there be a flight of top class talent – they have some brilliant people at the top (not just because I know them or they include a classmate!!).

tough questions. Thank God, I do not have to answer….

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  1. @Muthu – good one and I agree with you. 🙂

    @Subra – Nice post Subra. As always the debate between personal ethic and professinal ethics – there are no easy answers!

  2. I have had only one yardstick when a company approaches me with a product…”Will I sell it to my brother, sister, father, classmate with whom I wish to be in touch,?”…if the answer is no, then it is a no. There are easier ways to earn money than to see the floor. It is not that I have not made mistakes. A few of my friends lost money in equity investing and while lending money to some S.O.B. ‘friends’ who ran listed companies (these guys were not thieves, they were plain incompetent). From then on (say 1999 -2000) can proudly say all friends / clients have got REAL RETURNS and a premium to the index…

  3. Subra,

    You are lucky coz you are on your own.

    But a professional simply does what he is paid for! As always it is the ghulam who gets the axe – while raja presides without any clothes on!

  4. Subraji, Wen you mention selling to brother, sister, father or classmate, I recall those chain marketing businesses! Ppl actually fel for it and made their frens and relatives fall for it! And ofcourse lost relations!

  5. SAM people who are on their own, pay the price for being ethical or unethical. I know managers who will do all the wrong things and once the benefit goes down or goes off, will quit the job. I have nothing against it, but the businessman who makes a mistake – pays the price. Look at Ketan Parekh he is paying the price. None, NONE of the employees of PWC are paying the price for GTB bank audit or for Satyam (except the partner who signed!!). I think employees at least have that advantage…

  6. KalpK – in our country the businesses where people really LOSE money – shark like loans, credit card, mlm….are not regulated. LOL.

    the places where they are looted is regulated poorly –

    but we all believe if the new lokpal bill is passed, there will be no corruption in India. Long live India!!

  7. Mr.Subra – In a typical insurance company induction training (about which you may know better), advisors are always asked to prepare a list of 200 prospects – mainly relatives and friends. These prospects are considered ‘low hanging’ fruits.

    I’ve seen people carrying dozens of endowment policies (with different years of maturity) so that they can have ‘regular income’ every year after the retirement till they die.

    One gentleman had invested in 52 funds and 27 insurance policies.

    Another person, was paying premium in lakhs of rupees, some times even by borrowing.

    One lady lost very heavily in gold quest MLM scheme 2 years ago, whose founder is now in Chennai jail.

    The common thread in all the above cases are the sellers are either close relatives or friends.

    Two things – these sellers already enjoy the trust of the people and many a times customers are simply not able to say no to them.

    Like in the times of Judas, treachery always comes from the inner circle and it is very difficult to protect yourself from your near and dear.

  8. employee or entrepreneur , at some point we know that we are crossing a line. when we cross the line, there is a down side, only we usually shut our eyes and hope its not seen by people around us.guess thats what the law of karma is all about..

  9. The current society is turning good mannered people into movericks. When you receive calls requesting to subscribe loans or insurance, you are repeatedly harassed,if you decline politely, . You go to police station as an academia or medical practitioner and talk to them respectfully, it goes to deaf ears. Out of courtesy and gratitude, you give business to someone from your employer (ofcourse on merit), pat comes proposals to misuse just because you are soft mannered and approachable. A widow goes to claim nominated FD amount, bankers push ULIPs. Worse, recently I had seen case of demanding bribe from the victim who lost his parents in an accident. When you see all these things infront of your eyes, difficult to stop someone jumping into bad bandwagon.

  10. Krish when your mother told you Harishchandra story, Nala Damyanti, Ramayan, and Mahabharata you saw that good people went through trouble, correct?

    we do what is convenient but expect different results. We bribe, but expect the police force to be honest. We tell our ITO all entertainment is business ent. We throw paper (after all one bit of paper should not matter) and complain that Mumbai is dirty.

    My argument is simple – you cannot sow a mango seed and expect a jackfruit tree. Simple.

    If the police does not listen, complain. In a worst case scenario stand for an election. If it is convenient to bribe, bribe – but with the same hand do not light a candle in Anna Hazare’s meeting.

  11. I have been reading your articles of late, makes for good reading. But one thing sir, you seem to have a strong one sided bias about a lot of things. Years in markets has thought me to think both ways. You have to be on the fence, and jump on the side of opportunity.

    RCom isnt dead, its gonna come out strong from the 2g scam. Why am I saying this? Simply because the future is prewritten. Try and identify the future. Then you would do no wrong. Its difficult to predict the future, but you can surely do it. Be a student of life.

    You make for good reading. But leave out the bias… Everything has both good and bad sides. Everything is right, and everything is wrong, it just depends on your viewpoint, which will surely be different from another.

  12. Anon or who ever you are,

    a blog by definition has to be biased. Have stayed ONLY with Dhirubhai and Mukesh. No regrets, no change of mind. A value investor once, a value investor always. Stayed away from many such groups with great benefits…any change of mind? No, thanks

  13. Well, am no fan of Anil, neither of Mukesh.
    Am no fan of Shankar Sharma (who has a negative bias on markets a lot many times), neither of Rakesh Jhunjhunwala who has a positive bias at all times. Shankar Sharmas gonna be right in the next couple of years or so, Rakesh Jhunjhunwalas gonna be right the next few years after that.
    Well for some its about value investing, for some its about making money either the Test match way and the T-20 way, logic be damned as long as you are right most times. Either I make money fundamentally, or its money technically, or its money trading, after all everyones earning money.
    Would have liked to frame it some other way, but woefully short on time, hope it carries the message through. Just playful bantering, nothing serious.

  14. Subrabhai
    Now that you have another anon here, better to preface with this salutation.
    One of the things I learned from my late elder, a 1949 CA from England,is to always always have a Plan B. Always cover costs. He’d walked out of a boxwallah Brit job. Somewhere I have the same temper.

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