by RV Raman
Knowing that CBS were PRL’s auditors, Daniel had called Sanjay to ask if he could help in some way. On learning that his friend of many years was PRL’s signing partner, Daniel had asked for a meeting on Monday morning.
Now sitting with Sanjay and two other people – a partner and a manager – Daniel waited for his friend to open the meeting.
‘As you are aware, Daniel,’ Sanjay began on a cautionary note, ‘we, as auditors, are bound by our ethics and guidelines. While we are perfectly willing to listen to whatever you may have to say, we may not be in a position to respond to your questions. Nor will we be able to provide any information you seek.’
‘I understand completely,’ Daniel responded. ‘And what I have to say will be at an unofficial level; I am here in an individual capacity rather than as an EOW officer. I’m just helping out a friend in Bengaluru.
‘As you will see, what I have to say is in our mutual interest. I think we can have a discussion without crossing any ethical lines. But if at any point, you do not wish to engage or respond, I will accept that.’
‘Thanks, Daniel.’ Sanjay nodded his agreement and gestured towards the two men with him. ‘Alok here is the audit manager who handles the audit, while Surjeet is the partner who heads IT Risk Management. Surjeet’s people recently completed a comprehensive IT Systems Audit of PRL’s computer systems. Now tell us what this is all about, Daniel.’
‘The Bengaluru Police,’ Daniel began, ‘are in the midst of a murder investigation, which seems to be inextricably linked to a data theft, espionage and other white-collar crimes. In the course of the investigation, they came across reports that suggest tax evasion, possibly by PRL.
‘A formal investigation would take weeks, if not months – time we don’t have on our hands. On the other hand, what needs to be done, in the first instance, is quite specific and limited. As PRL’s auditors, you would know their systems and processes very minutely. That’s why I approached you for help.
‘Also, if it does turn out that there is something wrong in PRL’s accounting, CBS, as their auditor, would face awkward questions. It is, therefore, in our mutual interest – yours and mine – to quickly and quietly investigate this matter.’
‘Are you expecting us to conduct this investigation without informing PRL’s CFO?’ Sanjay asked.
‘As far as I’m concerned, it’s of little consequence how you go about it,’ Daniel replied. ‘You’re free to do whatever you deem fit. My only request is that you not do something that could delay the exercise.’
‘Fair enough. We’ll take a call after we hear you out.’
‘The matter is quite simple, actually,’ Daniel continued. ‘We received information from two different sources that should have tallied, but doesn’t. That has got us worried and we need to get to the bottom of it.
‘From MyMagicHat, we got the list of orders placed in September with PRL through 37 different resellers. And from another source, we received the summary of PRL’s September sales to these 37 resellers. Since the resellers buy the goods from PRL and sell them to the customer through MyMagicHat, these two sets of information must match, give or take a little for month-end adjustments. But they don’t. And they don’t match by a long mile. Therein lies the problem – PRL’s September sales amount to about half the volume MyMagicHat’s transactions show it should be.’
‘Do you have both sets of information with you?’ Sanjay asked.
‘I have them here. I presume you would have access to PRL’s management information system reports for September. You can satisfy yourselves that the reports I have are accurate.’
Daniel pulled out two sets of papers from his bag.
‘These are the MIS reports from PRL,’ he said, pushing one set towards Sanjay. ‘Please satisfy yourself about their accuracy.’
Alok, Sanjay’s audit manager, opened his laptop and navigated to an email with the September MIS. He and Sanjay then compared the reports on the laptop screen with the one Daniel had brought. Ten minutes later, Alok looked up at Sanjay and nodded silently.
‘Very good, that’s settled,’ Daniel said crisply. ‘Now before I show you MyMagicHat data, let me reiterate that it has been verified several times. The data comprises about a million orders that were placed with 37 resellers. I am told that every order has been verified and established as correct and that MyMagicHat has also run a number of other checks, including hash totals.
‘The reports here have been prepared by summarizing these million orders.’ He pushed the second set of papers towards Sanjay. ‘Let’s start by taking one of the 37 resellers – New Horizon Traders. Please compare the figures in this report with the figures in PRL’s report.’
With the practised ease of someone who had been checking numbers for a lifetime, Sanjay pulled out a pencil and marked the corresponding figures in the two reports.
‘They are way off,’ he observed matter-of-factly. ‘One is almost half that of the other.’
A moment later, he carefully placed his pencil on the desk and looked up at Daniel.
‘But we’re comparing apples and oranges here, Daniel,’ he said. ‘How do we know that New Horizon Traders placed all the orders on PRL? They may have placed only half the orders on PRL and fulfilled the rest from elsewhere.’
‘I have it on good authority that New Horizon Traders places 95 per cent of its orders, if not all, on PRL. You know the group well, Sanjay. New Horizon Traders is one of the IRs – independent resellers – Sashikant Puraria had set up, isn’t it?’
Sanjay remained silent, noncommittal.
‘The raison d’être of New Horizon Traders,’ Daniel persisted, ‘is to connect PRL with MyMagicHat in a way that doesn’t violate the rule that no reseller should have more than 25 per cent share of an e-tailer’s business.’
‘Let’s look at some other resellers,’ Sanjay suggested, turning to his manager.
Half an hour later, their comparison had been carried out and the picture that had emerged was stark.
‘It’s too early to arrive at any conclusions,’ Sanjay said carefully, skirting any semblance of a commitment. ‘However, the two sets of numbers are sufficiently dissimilar to warrant an investigation. Although the possibility remains that these 37 resellers placed half their orders elsewhere.’
‘Not likely, is it, Sanjay?’ Daniel said. ‘They are the IRs –’
‘Can I weigh in?’ Surjeet asked, speaking for the first time. He seemed to be a quiet, soft-spoken man.
‘Sure.’
‘Let me understand what is being implied here,’ Surjeet said. ‘Are we saying that a million orders were placed with PRL by the 37 resellers, but they are only partly reflected in PRL’s reports?’
‘That is an excellent summing-up.’ Daniel smiled his appreciation and nodded animatedly. ‘That is, indeed, what has been suggested.’
‘That’s impossible, Daniel,’ Sanjay cut in. ‘Not a single product – TV, AC, fridge or anything else – can leave PRL’s stores without the transaction entering their ERP system. Take my word for it; this is the very core of our audit. Their processes are pukka. Not a single order can be fulfilled without the details being recorded in their systems.’
‘And once an order enters the system,’ said Surjeet, taking up where Sanjay had left off, ‘there is no way it can be removed, deleted or, in some way, overlooked. If 1,000 orders enter the system, you can’t just account for 500 and leave out the rest. Modern ERP systems that automate all these back-end functions simply won’t allow it.
‘Every order has financial components too – a set of debits and credits while shipping, and another set of credits and debits when payment is received. In addition, there are linkages into inventory and logistics. Every outbound shipment depletes stock. There are several other linkages, too, that automatically trigger supplementary back-end functions. There’s no way transactions can vanish without a trace.’
‘No way, Surjeet?’ Daniel asked.
‘None,’ Sanjay declared firm
ly, jumping back into the discussion. ‘I have no hesitation in saying this, as I am not divulging any confidential information. I am only reiterating what we have implicitly stated when we signed PRL’s financial statements.’
‘Are you sure, gentlemen?’ Daniel persisted.
‘Just as MyMagicHat couldn’t have invented a million transactions, half a million transactions cannot just disappear from PRL’s systems. These are modern, state-of-the-art systems, Daniel; they are robust and reliable. And, as auditors, we check them. Such large sums of money – hundreds, if not thousands of crores – cannot vanish just like that!’ Sanjay snapped his fingers to emphasize his point.
‘My team did a full systems audit in August,’ Surjeet added. ‘Take it from me – such a thing is impossible.’
‘However, Daniel,’ Sanjay said, striking a conciliatory note, ‘since you have brought this to us, we’ll conduct some checks today. We will also search for transactions relating to each of the 37 reseller names. Give us 24 hours and I’ll get back to you.’
‘Thanks, Sanjay,’ Daniel said, closing his bag. ‘Thanks for being candid.’
‘Not at all, Daniel.’ Sanjay flashed him a pleased smile. ‘We haven’t divulged any confidential information or done anything inappropriate. On the contrary, we have actually helped our client.’
‘How so?’
‘You came here to find out if there was a prima facie tax evasion case against PRL. I hope we have convinced you that there isn’t. Our client can breathe easier now.’
‘Will you have to inform PRL before you run your checks?’ Daniel asked.
‘I’m afraid so. This is a serious matter.’
■
‘As expected,’ Dhruvi quipped, hanging up. She had just finished speaking to Daniel. ‘PRL’s auditors are unequivocal in maintaining that there is no way the company could have suppressed so many sales orders and falsified accounts.’
‘I knew it!’ Alex moaned. ‘Just as I thought we were getting somewhere, somebody had to throw cold water on our hunches.’
‘I warned you this would happen, didn’t I?’
‘Yes, you did. Just as MyMagicHat couldn’t have fabricated a million transactions, you’d said, PRL couldn’t have made half a million orders vanish. But why are you looking so pleased?’
‘Because Alex, it narrows down our field.’
‘Narrows down! How, ma’am? A confirmation would have narrowed down our field to PRL. How does this –’
‘What this tells us is that the deception isn’t being carried out either at MyMagicHat or at PRL, but somewhere in between. It is happening after the transactions leave MyMagicHat, but before they reach PRL.’
‘At SM Retail?’
‘And at New Horizon Traders, Supreme Electronics and the rest of the 37 sellers. But we’ll deal with that later. Right now, we have to meet Puneet, along with the psychiatrist handling his case. Come, let’s get going.’
Half an hour later, they were with Puneet. The doctor and his patient sat facing each other, while Dhruvi sat a little away from them. Alex was seated on a chair near the door.
‘Your father says that you want to return to Mumbai,’ the doctor began. ‘I’m not sure I can allow that yet.’
‘I feel fine, Doctor,’ Puneet insisted. ‘Except for my inability to remember anything that happened during that one crucial week.’
‘You’re certainly looking better, Puneet,’ the doctor said encouragingly, patting the young man’s hand. ‘And that is excellent news. But I would also want to test the rest of your memory – before and after the missing segment. If that is functioning perfectly, it will make it easier for me to let you go. I need to be sure that your memory loss is restricted to just that one week.’
‘Okay.’ Puneet sounded cautious but optimistic. ‘How do you want to go about it?’
‘I’ll ask you random questions – simple ones – from the time preceding your memory loss and from the time following it. I want you to relax and say whatever comes to mind spontaneously. Think you can do that?’
‘Sure.’
‘I need you to relax first. Would you like to lie down on the sofa?’
Puneet moved to the sofa, kicked off his slippers and lay down with a cushion under his head.
‘Are you comfortable?’ the doctor asked.
‘Yes.’ Puneet burrowed into the upholstery and settled down. ‘I’m ready.’
‘Okay,’ the doctor said in a mild, singsong way. ‘Here goes. What is your date of birth?’
Puneet answered easily.
‘Your mother’s birthday?’
He answered correctly.
‘Your CGPA at engineering college?’
‘8.87.’
‘What colour shirt was Nilay wearing on the day you disappeared?’
‘White and light blue – stripes.’
‘Who brought you food when you returned to MyMagicHat?’
‘Mervyn.’
‘What did he bring?’
‘Four idlis and three vadas.’
‘What was Mamata wearing yesterday?’
‘Blue jeans and a pink shirt.’
‘Her footwear?’
‘White sneakers.’
‘Who showed you a report yesterday when Mamata was here?’
‘Inspector Dhruvi.’
‘What was the report about?’
‘It was an MIS report from Puraria Retail.’
‘For which month?’
‘Last month. September.’
‘Name two or three companies the report mentioned.’
‘Supreme Electronics, SM Retail, New Horizon Traders.’
‘What day is it today?’
‘Monday.’
‘Date?’
‘24 October.’
‘Okay, Puneet,’ the doctor said. ‘You may sit up.’
Puneet rose swiftly and took the chair he had been sitting on earlier.
‘How did I do?’ he asked. ‘Did I pass the test?’
‘Your memory is perfect, Puneet,’ the doctor replied slowly. ‘But …’
He turned to Dhruvi.
‘But,’ the Inspector continued, ‘you failed the test.’
‘What!’ Puneet exclaimed. ‘I answered everything correctly!’
‘Indeed.’ Dhruvi’s expression was severe. ‘You gave information you shouldn’t have.’
‘What do you mean?’
‘This is the report I had shown you yesterday.’ Dhruvi thrust a bunch of papers at him. ‘Look at it and tell me if it’s PRL’s MIS report.’
Puneet’s eyes flew to the report and his face blanched.
‘The name at the top is Purposive Rentals Limited,’ Dhruvi continued.
‘But I read it as Puraria Retail Limited. I’m mildly dyslexic.’
‘See which month the report is for – August. That can’t be dyslexia.’
‘But –’
‘Read the names of the companies the report mentions. They are not the names you just mentioned. They are Supreme Traders, SM Electronics, New Horizon Retail and not Supreme Electronics, SM Retail, New Horizon Traders.’
Puneet’s face was so pale, he looked ill.
‘Mr Kaul,’ Dhruvi said softly, leaning towards Puneet. ‘You are faking your amnesia. You had studied this report between 9.30 p.m. and 10 p.m. the night you were abducted. And you discussed it in detail with Ved Prakash, including the very companies you just mentioned.’
‘No,’ Puneet protested. ‘No –’
‘Please, Mr Kaul,’ Dhruvi cut in, ‘there’s no point trying to deny it. The clinching evidence is this: Ved Prakash emailed you this report at 9.27 p.m. that night. You could not have seen it earlier. It was not among the reports he had sent you that morning. It is amply clear to us that you do actually remember things from the time that you claim you don’t. In fact, you remember some very minute details too.’
Puneet dropped the papers and buried his face in his hands. A long, shuddering moan escaped him.
�
��I think I know why you faked the amnesia, Mr Kaul,’ Dhruvi continued gently.
Puneet looked up momentarily, his eyes haunted. ‘You were afraid to disclose what you had seen and heard, weren’t you? You were afraid they would kill Mamata if you revealed the truth.’
Puneet nodded miserably, still moaning as he hid his face behind his hands.
‘Thank you,’ Dhruvi said. ‘It’s so much easier this way.’
Puneet dropped his hands in his lap and gazed at her piteously. His lips were trembling. Sweat glistened on his brow.
‘You discovered a huge gap between the figures reported by MyMagicHat and those by PRL,’ Dhruvi continued. ‘Either MyMagicHat was overreporting sales or PRL was under-reporting income. You were going to bring that to Vikram’s Deswani’s attention that night.
‘But somebody overheard you. Somebody who had installed listening devices at MyMagicHat. They abducted you, with every intention of killing you, just as they would later kill Moin. But you escaped.
‘Just escaping was not enough, however, as Mamata and your family were in danger. You had to do something that would stop your abductors from taking that extreme step. So you feigned amnesia. It was your way of telling them that you wouldn’t expose them. Am I right?’
‘Yes!’ Puneet gasped.
Alex brought him a bottle of water from the fridge, which he accepted gratefully.
‘You’re right,’ Puneet said, after gulping down some water. ‘But what could I have done, Inspector? I couldn’t let them kill Mamata. Oh God! What will happen to her now?’
‘Mamata is safe,’ Dhruvi said gently. ‘She and Ved have been taken to a safe house. You would be safer too, if you told me all that you know. A lot has happened in the past 48 hours that lets you off the hook.
‘Vibha and Nilay discovered the huge gap between MyMagicHat’s sales and PRL’s revenue and we met PRL’s auditors this morning. That news has reached everyone. Everyone who needs to know is aware that this information came from the Adigas, not from you. That news would have reached the perpetrator of these crimes as well.’
‘Am I safe, then? Is that what you’re saying, Inspector?’
‘But we need to catch the culprit first, Mr Kaul. Do you know who it is?’
