Corrupt Practice

By Vijay Patel

Taylor, the newly appointed General Manager of a Kenyan subsidiary of a major US pharmaceutical giant, is faced with a dilemma. The companys ethos is NOT to do any business through bribery in line with the US laws. But this conflicts with the local culture where such practices are the norm.

Taylor decides to take matters into his own hands.

Then someone in the company blows the whistle on him, and the US auditors jump on him. What ensues is a battle of wits between the auditors and Taylor.

Taylor faces another, simultaneous, battle as well. An influential official at the ministry is murdered, and Taylor ends up as the prime suspect at the same time as the audit inquiry.

The author is one of the very few people who can make a page turning suspense out of an audit inquiry.

CORRUPT PRACTICE is a fast paced commercial thriller with lots of twists and turns.

The storyline is gripping and will have you mesmerised throughout.

A must read for all whodunit fans.

• Language: English
• Publisher: AuthorHouse UK
• Release date: Nov 10, 2011
• ISBN: 9781456793043

Book preview

© 2011 by Vijay Patel. All rights reserved.

No part of this book may be reproduced, stored in a retrieval system, or transmitted by any means without the written permission of the author.

First published by AuthorHouse 08/12/2011

ISBN: 978-1-4567-9305-0 (sc)

ISBN: 978-1-4567-9304-3 (ebk)

Printed in the United States of America

Any people depicted in stock imagery provided by Thinkstock are models, and such images are being used for illustrative purposes only.

Certain stock imagery © Thinkstock.

Because of the dynamic nature of the Internet, any web addresses or links contained in this book may have changed since publication and may no longer be valid. The views expressed in this work are solely those of the author and do not necessarily reflect the views of the publisher, and the publisher hereby disclaims any responsibility for them.

Contents

PREFACE

Prologue

1975-1977

CURRENT YEAR

1992

Friday, January 17: 3.00 a.m.-7.00 a.m.

CHAPTER 1

1977

CHAPTER 2

1977-1981

CHAPTER 3

July 1981

CHAPTER 4

July 1981

CHAPTER 5

July 1981-September1981

CHAPTER 6

September 1981

CHAPTER 7

October 1981-December 1981

CHAPTER 8

December 1981

CHAPTER 9

September 1981

CHAPTER 10

January 1982-February 1982

CHAPTER 11

March 1982

CHAPTER 12

March 1982

CHAPTER 13

April 1982-June 1982

CHAPTER 14

July 1982-September 1982

CHAPTER 15

October 1982-Mid November 1982

CHAPTER 16

Mid November 1982-December 1982

CHAPTER 17

January 1983-December 1984

CHAPTER 18

1988

CHAPTER 19

1991

CHAPTER 20

October 1991-December 1991

CURRENT YEAR

1992

Tuesday, January 7th

Wednesday, January 8: 11.00 a.m.-4.15 p.m.

Wednesday, January 8: 4.15 p.m.-7.00 p.m.

Thursday, January 9: 5.00 a.m.-7.30 a.m.

Thursday, January 9: 8.00 a.m.-10.00 a.m.

Thursday, January 9: 5.30 p.m.-6.30 p.m.

Thursday, January 9: 7.30 p.m.-10.30 p.m.

Five days later-Tuesday, January 14

Thursday, January 16

CURRENT YEAR

1992

Friday, January 17

Saturday, January 18

Sunday, January 19

Monday, January 20

Tuesday, January 21

Wednesday, January 22: 8.00 a.m.-12.45 p.m.

Wednesday, January 22: 12.45 p.m.—2.00 p.m.

Wednesday, January 22: 4.00 p.m.-Midnight

Thursday, January 23: 7.30 a.m.-6.30 p.m.

Thursday, January 23: 7.30 p.m.-8.20 p.m.

Friday, January 24

Saturday, January 25: 7.30 a.m.-9.30 a.m.

Saturday, January 25: 9.30 a.m.-11.50 a.m.

Saturday, January 25: Noon-Midnight

Sunday, January 26

Monday, January 27

Tuesday, January 28

Wednesday, January 29

Friday, January 31

ONE WEEK LATER

EARLY FEBRUARY 1992

Epilogue

PREFACE

The world has witnessed many cases of bribery and corruption involving major corporations.

In the late 70’s the US airplane manufacturer Lockheed Aircraft Corp. was implicated in a bribery scandal; in recent years Britain’s Serious Fraud Office has been investigating allegations against the UK defense giant BAE Systems, accused of paying hundreds of millions of dollars to foreign authorities to illegally win defense contracts in countries such as Saudi Arabia and Hungary.

Again recently, Daimler AG of Germany is believed to have agreed to pay about $200 million to resolve a U.S. investigation into whether it paid bribes to secure business overseas.

Thus, it is true to say that this book is inspired by actual events; however, the principal characters in the novel are entirely imaginary, as is Anglo-Marshall Inc.; and neither is based upon actual persons or any corporation.

Though a few real names of corporations have been used, there is no suggestion that these corporations have acted or will act in the way described.

The episode and development portrayed in the prologue, however, is a matter of history and fact.

Prologue

1975-1977

IT WAS THE KIND of news that rocked the financial world. A major U.S. multinational was at the center of bribery and corruption allegations.

While the media took keen interest in reporting the news, Corporate America stood still almost in shock as the story unfolded in the papers. Lockheed Aircraft Corporation was under investigation by the Securities and Exchange Commission for having made under-the-table payments to officials in several foreign countries to promote sales.

Mr. Sporkin, the director of the SEC’s enforcement division was pressing the company to turn over documents giving details of the foreign payoffs. Mr. Sporkin told the court, We don’t know what the stewardship of this money is. We don’t know if it’s been given to the official of some foreign government, as the company tells us, or if it came back into the country and went into someone’s backyard as a swimming pool.

The lawyer representing Lockheed, Mr. Glendon, responded that the reason the company was reluctant to hand over the documents was that they contained rumors as well as facts about foreign officials. There are people in there who clearly received monies, there are other people in there who appear to have received monies, and in some cases it could be read either way.

Clarifying the matter, Mr. Glendon added that the documents contained references to a number of officials in almost 15 countries where the company made payoffs. In certain cases, the documents named up to 10 officials, not all of whom were paid off. He went on to say that the people mentioned were government leaders and in some cases heads of state.

Noting the company’s stance, the SEC threatened that it might send officials to foreign countries to trace the money. Mr. Glendon responded by stating that he saw two problems, They might have a problem getting in, and if they ask the kind of questions they say they’re going to ask, they might have a problem getting out.

THE CONGRESS PASSED THE Foreign Corrupt Practices Act in 1977.

The main substance of the FCPA is to prohibit U.S. multinational corporations from making facilitating payments to any foreign official. For those in breach of the Act, there are severe penalties: fines of up to two million dollars for individuals and even imprisonment of up to five years.

CORRUPTION, BRIBERY AND KICKBACKS were at the crux of all the newspaper reports of the time. Lockheed was one example, but there were many other companies which had acknowledged wrongdoing.

The scale of the scandal caused uproar in boardrooms of many U.S. companies, prompting them to take a close look at their own policies and procedures in order to insure that they were not unwittingly falling foul of the new rules of conduct. Whilst the past was generally forgiven, U.S. multinationals came under renewed pressure to observe new standards. The companies most prone to react were the multinationals having operations in Africa, Asia and the Middle East.

Many such companies instituted detailed investigations of their trading practices in relation to their dealings abroad. Overseas operations were shut down, managers were replaced, sales representatives were fired and distributors were ordered to review their operations as companies vigorously attempted to clean up their act in a final bid to avoid even the most superficial hint of impropriety.

Overnight, company after company declared mission statements laying out new ethos, which would hence forth dictate the conduct of their business overseas.

During this entire period, the media remained equally busy, reporting heavily on the issues of ethics. Generally, in the corporate world, there was over-all consensus that it was improper for companies to make payoffs in order to facilitate business. However, there was that general disenchantment too, that unless there was a level playing field-one, where all corporations, U.S. as well as non U.S., were subject to the same rules—the new rules of conduct were somewhat unfair to U.S. multinationals.

FALL 1977

THE TALL, POWERFUL figure of Jack B. Houston, newly elected president and CEO of Anglo-Marshall Inc., the giant pharmaceutical conglomerate, finished reading for the umpteenth time the newspaper stories and editorials that were stacked on his table. His company, like many others, had just emerged from the negative publicity of bribery scandals, which had resulted in the resignation of the previous president.

Later during the day, he was to preside over an urgent meeting of the full board of directors, vice-presidents and other key personnel, who for the past month were working fervently on a draft policy document which he had personally initiated.

The meeting took unusually long. It started late and lasted five hours. The draft statement was explained, discussed, deliberated, debated and contested. What finally emerged was a policy statement that was duly approved and unanimously adopted by the board.

Before bringing the meeting to a close, Houston addressed the board. He spoke in a solemn voice, Our stockholders have entrusted us with the high office as caretakers of the company, and it behooves upon us that we conduct our business with honesty, integrity and the highest standard of business ethics. Let the lessons learnt from the past enable us to turn a new leaf, as the company enters a new era with a new vision for the future.

There was a round of applause.

I urge all the members present here today to capture the spirit of the FCPA in revolutionizing the conduct of our businesses abroad, making absolutely certain that our dealings with foreign officials are in strict adherence to U.S. laws.

What evolved out of that momentous meeting was a one-page policy document called the Code-of-Ethics policy. Its purpose was to spell out exactly how managers were expected to act on ethical matters when presented with the dilemma of bribes. The CoE policy document bearing Houston’s name was transmitted by telex to every manager above a certain grade in over a hundred countries in which the company did business, and the recipients were required not only to abide by the policy but also to learn its contents by heart.

THUS, ANGLO-MARSHALL INC. adopted the CoE policy in 1977, soon after the enactment of the FCPA. In the ensuing years, the company vigorously implemented the policy, making down right certain that every manager was in full compliance of it.

So much was the pressure on managers to adhere to the policy, that sometimes, out of contempt, some managers secretly mocked that the name of the policy was perhaps a play on the title of its creator. They were allowed that whimsical indulgence, but never were they allowed to lose sight of the fact that this was the single, most sacred policy statement which none of them could possibly afford to ignore—not unless they didn’t give a damn about losing their jobs!

The task of policing the CoE policy was entrusted to the much dreaded international audit department, who conducted systematic audits of their overseas operations. Additionally, as part of their review procedure, the auditors required every manager to sign a statement, biannually, confirming three things:

ΠThat the manager was aware of the Code-of-Ethics policy;

ΠThat the manager was in compliance with the policy;

ΠAnd finally, the manager was not aware of anyone else in the company who was violating the policy. If, on the other hand, he had knowledge of anyone in the company possibly violating the policy, he was obliged to disclose that fact.

It is this last aspect, one of the most destructive weapons in the inexhaustible arsenal of the present-day auditor, often dubbed as whistle-blowing—a phenomenon becoming increasingly common in the hierarchy of the modern corporate structure—that plays a prominent part in this book.

CURRENT YEAR

1992

Friday, January 17: 3.00 a.m.-7.00 a.m.

WE HAVE COME TO make inquiries regarding a homicide in which you might be implicated.

The words echoed in his mind, as he lay in bed.

Was it merely an inauspicious start to the day? Or was it something far more serious?

The night was warm and muggy. The room was generally dark, sparsely illuminated by the trickle of a distant streetlight emerging through the folds of the curtains, and enhanced by the reflection on the white shirt that lay on the couch. The only other item visible in the room was the clock in the VCR unit that flickered the time.

3.25 a.m.

He’d spent the past three hours turning and tossing, struggling to get some sleep. He finally gave up. Instead, he lay still, his eyes wide open. After some time, he propped himself to a sitting position with the aid of a couple of pillows, and instinctively wiped the sweat off his forehead with the back of his hand.

He was genuinely apprehensive.

His mind was racing away recalling the developments of the past week or so, which were troubling him. How the hell did he get caught up in a homicide inquiry? How did his gun end up at the scene of the crime? These were some of the questions haunting him. He speculated if he would ever get out of this mess.

As if in response, the shrill ring of the telephone shattered the silence of the night. Glancing at the phone on the bedside he wondered who it could be at this time. He could have picked up the receiver straight away, but he waited. Consciously striving to control his rising panic, he pushed the blanket to one side and forced himself to answer the phone on the fourth ring.

Hello.

Hello. Scott, is that you? asked the voice at the other end.

Taylor was wide-awake, but even if he’d been half-asleep he’d still have recognized that voice. It was the high pitched voice of Mark Gavin, his boss in New York.

Mark, do you know what time it is over here in Nairobi? I must be dreaming, he strove to sound humorous, just as he switched on the bed light.

Yes Scott, it’s me, Mark Gavin, calling from New York. You’re right; the time zones are a huge headache. I had to call you straightaway as I have a very important message—something that you must know. I hate to say this—it’s extremely distasteful, his voice was ice cold.

Taylor couldn’t believe his ears. He knew he had a problem with the police in Nairobi, but, surely, this could not have anything to do with Gavin in New York. It must be some other matter. Perhaps, some stupid report that he’d forgotten to file, and Gavin getting worked up about it.

Then he remembered something. Yes, he hadn’t filed his previous two CoE-3 reports. The boys in New York must be getting uptight about the outstanding reports to have asked the area manager for Africa to chase him.

Or, was it some other issue altogether?

A chill passed through his body. He didn’t wish to admit it, but he knew that something was seriously wrong. He could tell from Gavin’s tone.

Hello? Are you there?

Yes,

Scott, continued Gavin, the international auditors of the company are already in town. Mike Gazara, whom I think you’ve met, has arrived in Nairobi, and along with him is Paul Benito. The two gentlemen are booked in at the Mirage-Boulevard, and they have asked me to contact you. They want to be picked up and taken to our offices at eight.

What! The auditors are in town? Scott uttered in disbelief.

They wish to conduct an official inquiry into certain allegations that have come to their attention. According to them, the allegations are very serious. Gavin spoke solemnly as if it was part of a well-rehearsed statement. His voice was trembling. Given the traditional nervous disposition of Gavin, Taylor would have ignored his tone, but this was different. Taylor sensed the distinct element of fear in his voice.

I know Gazara quite well. I’ve met him a few times at company conventions, Taylor forced himself back to the conversation.

Gavin continued in the same monotonous manner, Obviously this is not one of his routine visits. This one is different since the two of them are together, he paused.

Taylor froze for a moment.

Did they say anything as to why they’ve showed up all of a sudden?

Scott, these are corporate auditors! Surely you know their style? They’ve told me nothing. And even if they had, they’d have made sure that I don’t divulge it to you. We all know their modus operandi! They like to pounce on their quarry suddenly, without warning,

I see, Taylor said as he thought for a brief moment. In that case I’ll do the best I can to assist them with their inquiry. After all, I’ve nothing to hide.

That’s good! But do be careful! These guys aren’t exactly angels. They can do a lot of damage. My advice to you is to be open and honest in your answers. Don’t try to cover up, or protect anyone. These people are thorough and will grind away until they find what they are after. Remember that they have unlimited powers and the backing of the entire company, Gavin kept going as if he was reading out the salient portions from a script. Then he added, Ordinary mortals don’t stand a chance in hell against them.

Taylor was quick to grasp the situation. He was all too aware of the awesome powers of the auditors.

I appreciate your advice, Taylor uttered. Pardon me for saying this, but don’t I get the impression that you know something more than you are prepared to divulge? Surely, they can’t just show up here without discussing the essentials with you? For God’s sake, isn’t there any hint you can drop as to what these guys are after?

"Please try to understand. The impression I got is that they want to ask the questions personally without prior warning, he emphasized. Even if there was something I knew, I couldn’t possibly disclose it, as it would prejudice the course of their inquiry. That’s the way they like to play the game."

Taylor stopped probing.

He told himself that what Gavin was really saying was that he’d been with the company for twenty-seven years, the past fifteen as area manager for Africa. In a couple of years he would be coming up for retirement, so why the hell should he endanger his career for Taylor, or, for that matter, anyone else? In this game when it came to the crunch, everyone was for himself. Past acquaintance meant very little.

A wave of depression swept over Taylor as the callousness of Gavin’s attitude sank in, as did the full purport of his words. Here he was, caught up in the middle of a serious audit inquiry, and all Gavin was doing was keeping a safe distance. This was odd since they’d known each other for the past decade. The boss could have inspired him with some soothing words of encouragement.

On the contrary, Gavin had succumbed to the might of the international auditors and opted for the safety of the back seat.

Taylor thought about Gavin’s attitude and sighed. As it was, he was already fighting a mammoth battle with the homicide police, and was quite capable of fighting another one with the auditors.

I understand your position. If that’s the way you feel then I won’t ask you to compromise yourself.

Taking the hint, Gavin ended the conversation. Bye. Don’t forget, eight o’clock at the Mirage-Boulevard.

Taylor replaced the receiver and slumped into the bed, feeling desolate as if the world around him had collapsed. Getting to sleep was out of the question, not with two major problems looming over his head. He’d been with Anglo-Marshall for more than a decade and on the whole had enjoyed working for the company, but this was the first time he was experiencing such hard times.

For just over a week now, the homicide police had been questioning him in connection with a murder. Taylor recognized that this, in itself, was a serious problem, but it was strictly a personal problem that had nothing to do with the company. It was true that the person murdered had some connections with the company, but no one else in the company except his close friend Abdul knew that the police were interrogating him. Surely, neither Gavin nor the auditors were likely to have any inkling of this?

His mind raced away wildly, conjuring all sorts of ideas. What could the auditors possibly want from him? Could it be the simple matter of the outstanding CoE-3 reports or another more complicated matter that only he knew about? He would have preferred it to be the outstanding reports, but then, he argued, someone as high-powered as international auditors weren’t likely to spring on managers for something as routine and mundane as company reports.

Damn it! It had to be the other matter. Something, he’d managed to keep a lid on for so long.

He got up, switched on the main lights, wiped off the perspiration on his face and sat on the settee. His mind was busy, thinking all sorts of scenarios. As general manager of the company for more than seven years it was more than likely that he had done things that might be criticized by the auditors. Yet he was certain that, wherever possible, he had covered his tracks appropriately.

Almost certain.

Excepting the single instance involving a check.

He stared blankly at the contents of the bedroom without really registering anything.

The time on the VCR unit showed 3.48 a.m.

He eased out of the bed and dragged his sorrowful frame to draw the curtains. He peeked outside. It was quiet and still. The night was almost moonless, thickly dark, accentuated by the shadows of the tall jacaranda trees in the forecourt of the house. The stars were few and spread around and looked cheerless.

After a long time he pulled out a towel from a drawer and trudged to the bathroom. First he would take a cold shower and then worry about the inevitable grilling from the auditors, he told himself.

He was looking terrible, as evidenced by the dark circles that had formed around his eyes. The mental pressure of the events of the past week and the anticipation of the troubles still to come was definitely showing on his face.

On reaching the bathroom, he raised his arm and slowly flicked the light switch. He undressed lifelessly, throwing his clothes in the empty basket on the floor. Finally, he made his way to the shower.

He shut his eyes to relish the water, cherishing the first bit of relief against the background of his current problems. The cool, heavy spray drenched his body, refreshing him totally. Momentarily, all his troubles seemed to fade away. The thud of the water falling on the hard terrazzo floor in the dead silence of the night evoked memories of the neighboring Thika waterfalls, just a few miles outside of Nairobi.

What a picturesque sight! Millions of gallons of water cascading down below, gushing away, eventually finding its way into the stream. Water turning into vapor, rising to the clouds and manifesting in a multicolored rainbow. The overwhelming moistness everywhere, as he stood on the edge of the bridge holding Julia’s hand.

He felt good. His mind drifted away, evoking memories of the times when he and his girlfriend, Julia, had frolicked in the gardens surrounding the waterfalls.

But, once again, reality crept back in. The memories of the happier times were quashed into oblivion as the harsh truth of his present predicament took charge of his thoughts. He reflected over the events that sprang to his mind, over all those years he had spent with the company and wondered how much of what had happened was pure coincidence and how much was self contrived. He couldn’t draw a definite line, as often, there appeared hazy overlaps.

However, the events of the previous years glared in front of him as he shut his eyes and took a trip into the past.

BOOK ONE

CHAPTER 1

1977

THERE WAS AN EXTRAORDINARY buzz of excitement in the air.

Kenya was just raising its head from the clutches of Colonialism. A little over a decade after Independence, now a Republic with new dreams, new aspirations, it had every reason to embrace the new era with confidence and optimism. Generous Foreign Aid was pouring in from the West, spurring the population to toil harder to reap the benefits of a hard earned freedom. Added to this were the inherent benefits of all-year-round pleasant weather and fertile, plentiful lands.

What had happened to Kenya was happening elsewhere, all over the continent of Africa. Hitherto the continent was predominantly under Colonial rule, then in the sixties the inevitable happened. Like a swift wind heralding a change, the outcry for freedom swept over the continent, and overnight, country after country obtained independence: The African map was changing fast.

With this change came renewed interest, new attention, seeking fresh opportunities. The climate for doing business in post-Independent Africa was ideal. The new leaders were openly wooing foreign investment and the economic conditions seemed encouraging.

For too long the Western world had kept away from the Dark Continent, adamantly adhering to their misgivings of the hazards of doing business in Africa. So much so, that there was a time when the only Western presence that did any serious trading on the continent was in the form of the British companies. Obviously, there was a good reason for this. Predominantly, it was the British who had colonized the continent, and naturally, the British entrepreneurs established their business wherever their masters established colonies.

In the main the countries were raw and undeveloped, but the lands were fertile and the natives tolerant. For any dynamic entrepreneur, the opportunities to reap rich harvests were endless. Hence, many British companies capitalized on the situation and prospered in these vast, flourishing regions. As years rolled by, these companies fortified their stronghold while their masters still controlled the colonies.

All along, the U.S. multinationals had missed out. And yet they recognized that the opportunity was just too good to ignore, but it was in the nature of these multinationals to dip their toe in the water, test the temperature, call a board meeting and then decide whether the water presented adequate opportunity for a bath. While the British, the Dutch and the Germans took the plunge, for the U.S. multinationals, caution was the key word in those days—especially when it came to jumping in the wild, murky waters of Africa.

No doubt the U.S. multinationals wanted to make money—and, who could blame them? But not at the cost of taking undue risks. And they weren’t entirely wrong about their perception of the risks involved. Some of the newly independent democracies were finding it difficult to reap the benefits of their hard fought freedom. The menace this time was from within their borders, in the form of military regimes.

One major country to have escaped this trauma was Kenya.

Kenya had become independent in December 1963, and even after a decade it was still a peaceful and flourishing republic. While some of its neighbors reeled under military coups and breakdown of capitalism, Kenya was enjoying a rare mixture of political and economic stability.

Kenya had a literate indigenous population that exhibited a benign tolerance toward its foreign population, mainly of European and Asian descent. And it had a democratically appointed government that worked. Although the country had a single-party political system—and this was often a sore point with the U.S. administration—by African standards, it still bore some semblance of a democratically elected government.

The British had left, leaving behind a legacy of a well-run civil service and the infrastructure that worked. In the ensuing period, the country’s political leaders gradually improved the infrastructure, so much so that its road network, water and electricity supply, and its post and telecommunication service soon became the envy of its neighboring countries.

Nairobi, being the capital city, was bustling with government offices, and was host to a vast number of foreign companies that had set up trading activities in Kenya. Situated at an altitude of six thousand feet above sea level, and in close proximity to the equator, Nairobi enjoys a temperate climate most of the year. Another thing going for Nairobi is its easy accessibility, as it is conveniently located amidst the routes of many major airlines. This in itself attracts an endless flow of tourists, who throng the metropolis, staying in first-class hotels, while visiting the country’s numerous game reserves and sunny beaches.

THEREFORE IT WAS NATURAL that the country that readily drew the attention of the U.S. multinationals on the continent was Kenya. The method chosen for establishing a trading presence in the market was through appointed agents or distributors, since this presented the cheapest way to scope the market.

The multinationals simply shipped out a container load of inventory to their appointed distributor and sat back and waited for the money. Meanwhile, the distributor did all the hard work at his end: he would clear the shipment, transport it to his warehouse, pay the personnel employed by him, and take care of all the advertising and marketing activities at his end. Finally, when the goods were sold, he would repatriate the money to the principals, according to the terms of his agreement.

For the U.S. multinationals, the idea was simple and profitable.

As time went by, the multinationals realized that the arrangement with distributors was reaping profit. The corporations now contemplated setting up full-scale subsidiaries in the hope of harnessing greater untapped opportunities.

ANGLO-MARSHALL INC., THE giant U.S. multinational with businesses in more than a hundred countries, and a major producer of pharmaceutical and healthcare products, was constantly on the lookout for expansion opportunities. Having traded with reasonable success through Kenyan distributors, the company was determined to spread its wings into the East and Central African markets by setting up a local subsidiary.

So it came as no surprise that the U.S. Company chose Nairobi to establish a local subsidiary. The Kenyan subsidiary was set up in the late seventies, and David Murphy was appointed as its first general manager.

CHAPTER 2

1977-1981

The twenties had a name: the roaring twenties; the thirties used to be called the hungry thirties; the sixties were labeled, the swinging sixties. The seventies had somehow escaped a universal label, but considering the economic buzz in Kenya, they deserved a name that paid some tribute to the country’s commercial activity and extolled its spirit of enterprise.

The decade had produced a wave of frantic business activity, which in turn brought forth an air of expectancy all round. People’s moods changed all of a sudden. They felt elated and happy, gripped by a new energy as they witnessed the jubilation and the progress taking place around them.

At long last the people had begun to realize their dreams.

Commercial organizations, big and small, had begun to mushroom all over the country. Day and night people steeped into new ventures, using funds borrowed from banks or from kith and kin. There was a surge of new spirit, new enterprise. It was a time when things were happening. Heavy investment was flowing in from around the world, the larger businesses owned by the retiring Colonial Whites were vacating, replaced by a multitude of new entrepreneurs. There were opportunities all round, and for those willing to take the risks, the rewards were astronomical.

It was the seventies and Kenya was booming; and apparently not at the cost of moral degradation.

General standards of morality were good, and common decency and courtesy still prevailed. It was an era replete with ethics and chivalry. It was a time when young, beautiful damsels waited behind open top-floor windows awaiting their lovers to serenade; when every teenager hummed an Elvis song, his collars raised in Elvis fashion. A time when parents held the hands of their offspring while walking them to schools, hoping to give them nothing but the best education. A time when Sundays were reserved for worshiping and going to church, instead of being wasted in the pursuit of frivolous pastimes, or squandered away in public houses. A time when the old and infirm were loved and cared for by their children; rather than be neglected or dumped in old people’s homes.

It was the seventies.

A time when the clean shaven Hare Krishnas, clad in simple orange, roamed the streets openly, cajoling other pedestrians to partake in the perfect harmony of chanting and dancing, enticing them to join them in the bliss and the rhythmic beat of the cymbals.

It was the seventies.

A time when every third bill board displayed large, graphic advertisement of popular brands of cigarettes. A time when young people roamed the streets carrying a cigarette between their fingers, flaunting it as a status symbol; a time when people smoked in offices and in other people’s homes freely, without having to ask for permission.

A time when the world was still saved the onslaught of the computers and the madness of the electronic gizmos and cell phones; a time when people still rushed for the phone-booth to make that all-important call.

A time when accountants still entered their ledgers by hand.

But a big change was looming in the horizon. The economic growth about to pervade the country was to come with its own price tag.

It was only a matter of time.

IT WAS IN THIS background that Anglo-Marshall (Kenya) Limited came to be established in the country, and David Murphy, an expatriate American, given charge of the company.

Murphy, an athletic man in his early forties was of average height and sported a mustache. At the time when the post of the country manager was being considered, Murphy was in the U.S., working as a product manager. When he first learnt of the opening in Kenya, he was obviously interested. He had great faith in his leadership qualities and the prospect of demonstrating his skills in a foreign country particularly attracted him. The salary package attached to the job wasn’t bad either. He was prompt to note that virtually all the living expenses would be borne by the company, enabling the successful candidate to live a life of relative comfort, whilst saving the bulk of his salary.

He had the charisma, the right skills and the will to succeed. Since his background was product management and the proposed job involved introducing new products in a new environment, he had an edge over the other applicants. In his present job he had launched half a dozen new products in the U.S. with considerable success. The only thing against him was that he had little knowledge of Africa. But then neither did the other applicants know the first thing about the continent.

His past achievement was his strongest point and the one factor that swayed the decision in his favor. The selectors decided that, despite his lack of knowledge of Africa, he was perhaps better suited to bringing new and innovative ideas to the challenges of the job, albeit in an entirely unknown environment.

Thus Murphy landed the job.

At the time when Murphy’s posting was being considered, Kenya had strict immigration regulations that required foreign nationals seeking employment in Kenya to obtain work-permits. The company felt the first brunt of government bureaucracy when the authorities refused to grant the work-permit. The reason cited was that the authorities were loath to issue work-permits when the country’s own labor force was hugely unemployed. However, upon being reminded of the fact that the company was proposing a multimillion-dollar investment that would create employment for more than one-hundred-fifty local workers, the authorities relented and finally issued the permit.

A Kenyan firm of lawyers had handled all the paper work dealing with the application. Once the work-permit application was filed, the lawyers had to respond to at least six separate mail correspondence of further inquiries and clarifications—including the letter of refusal—before the authorities approved the application. It had taken the lawyers four personal visits to the immigration offices before the permit, duly stamped and signed by the principal immigration officer, was granted. The process from start to finish had taken four-and-half months.

What neither Murphy nor the people at the headquarters at New York ever came to learn was that, at each of the four visits to the immigration department, the clerk from the lawyers’ office had parted with grease payments, albeit small, in order to move paperwork from one desk to another.

This was a time when grease payments were an accepted way of life in Kenya. That was nothing new. Anyone having any dealing with government offices had to pay—or wait for ever. The lawyers, who were used to the local custom, had simply buried the payments in their expenses, passing it to the company in their final billing, as they did with their other clients.

Nairobi, a new flourishing metropolis buzzing with life, was a perfect blend of cultures and ethnicity. Superficially things were working with clockwork efficiency, but below the gloss it was a very different matter. The officialdom in government offices expected small sums of money just to move the paper work. Due to the mammoth business taking place, strains of greed had seeped in. Grease payments were demanded casually and paid readily to overcome the undue hassle.

It all began in dribs and drabs: small currency notes discreetly changing hands, in the interest of expediency and efficiency, which the public paid without as much as a second thought. Soon the texture changed, the amounts and the frequency grew larger, so much so that it was unthinkable for anyone to get anything accomplished at the government offices without dipping their hands into their pockets.

A FORTNIGHT AFTER RECEIVING the work-permit, Murphy arrived in Nairobi, accompanied by his young wife and four-year-old son, to embark on a venture that promised a bright new future. Murphy settled in his new home in the city and frantically began to set the wheels in motion.

Setting up a full-fledged subsidiary was a complex, tedious process. First, he needed the necessary manpower. He conducted the interviews to fill the three key positions: the marketing manager, the product manager, and the plant manager. Once the marketing manager and the product manager had settled in, he placed a substantial order with an overseas affiliate for a range of products that would form his first line of entry into the Kenyan market. Then, after due consultation with his plant manager, he rented a large two-story warehouse. The upper story was converted into offices for the administrative staff. The bulk of the ground floor was used for storage, the rear end being allocated for the plant.

Next, he needed the appropriate plant in order to commence manufacture. The head office sent in a team of technical experts to assist him design a suitable plant. It took Murphy, his plant manager and the technical team the best part of four months before they ordered the different pieces of machinery and equipment from various destinations in Europe and the U.S.

While he was waiting for the arrival of the plant, Murphy worked relentlessly with his marketing manager, Ben Macharia.

First and foremost he had to file product license applications for the products he proposed marketing in Kenya. Under Kenyan law, every pharmaceutical drug had to be registered with the ministry of health. For the products that were successful, the ministry issued product licenses authorizing the entry of the drugs in the local market. Hence, once again, with plenty of technical support from the head office, Murphy and Macharia worked arduously in filling bulky application forms that often ran into hundreds of pages.

Murphy then waited for the product license approvals from the ministry.

Regrettably for Murphy, the enthusiasm with which he had begun slowly started to dissipate. To his dismay, nothing seemed to be happening. The red tape at the ministries seemed to take for ever. He tried to figure out the problem and arrived at the conclusion that the government bureaucracy seemed to be hindering everything.

The other problem was his attitude.

Here he was in a foreign land with foreign people and different cultures. Instead of getting to know his employees he’d chosen to stand alone, keeping aloof from the common folk. He was generally brusque in his manner, kept a stiff upper lip and ordered around. He hardly mingled among the employees, rarely smiled and terrorized everyone with his ill temper. When he was gloomy, which was frequent, he displayed his emotions openly. He failed to recognize that he was in a different country, and that, behavior which would normally be accepted in the West would produce a totally different response in this part of the world. That was his biggest shortcoming. But how was he to know? All his employees felt alienated and no one ever told him.

Murphy faced problems from all quarters. There were unnecessary delays at the ministry for obtaining product license approvals, and the customs officials at the port held up his machinery and equipment for no apparent reason. Murphy was baffled that things just weren’t moving at the pace that he reckoned they ought to. Whenever he came up against official authority, the process seemed to take forever. He’d been in the country for eight months, but wasn’t getting anywhere.

One day he called Musa, who was the imports clerk in charge of clearing the goods from the port. Without preamble, he asked, Why are our goods not being cleared on time?

Musa was a cheerful young man, easily given to talking. He worked in the company in the junior position as the imports clerk, and ran all the errands for the company; so much so that he was in fact Murphy’s sole link to the outside world, since Murphy never visited any of the ministries, leaving it all to Musa.

Musa could have told him a lot about the realities of life at the ministries, but had on several occasions borne the brunt of Murphy’s fiery temper, and as such felt intimidated in his presence.

Thus, when confronted with the question be Murphy, Musa hesitated before replying. He considered if he should speak to Murphy with candor and tell him of the facts at the government offices. Tell him that the government employees expected some form of grease payments to move paperwork. There was nothing that Musa could do to expedite the process. To achieve anything, everyone had to pay. Without the payment nothing moved. Period.

But seeing the frown on Murphy’s face and fearing the uglier side of his boss’s temperament, he gave the tactful reply, Sir, the delays are normal. There are too many consignments at the port. It’ll take some time to clear.

Can’t you do anything to speed up the process? barked Murphy, without making any attempt to get to the root cause of the problem.

I’ll keep up the pressure at the clearing agent’s office, Musa added as he strode away.

Murphy decided to take matters in his own hands. Immediately he went to work. He wrote letters, both to his clearing agent and to the port authority, complaining bitterly about the time taken in releasing his consignments. The agent replied, promptly and politely, stating that they were doing their best, and that the delays were beyond their control. The port authority also wrote back, attributing the delay to the congestion at the port and lack of sufficient personnel, assuring Murphy of doing their best to clear the backlog.

He pressed on with the letters and his consignments were finally released after a couple of weeks.

Murphy bubbled with triumph. However, his success was short-lived, as unbeknown to him, the officials at the port authority delayed all his future consignments even more because of his complaint!

Murphy was more frustrated than ever. He wrote more letters, this time using stronger language. The port authority wrote back apologizing for the delays, but at the same time stated firmly that the consignments were in a heavily congested pipeline and that Murphy would have to wait his turn. Murphy wrote back, refuting their claim, but nothing happened. He finally gave up, cursing and shouting, unable to understand the system.

He had similar problems in the area of product license approvals: The same delays; the total lack of courtesy in responding to his letters. Things just didn’t move. Everything took its own sweet time. The product license applications submitted by Murphy were complete in all regulatory requirements and technical details, yet the officials at the ministry fabricated hitches, in the hope of eliciting grease payments. Murphy didn’t understand the system, and his employees were too frightened to tell him.

SECRETLY, MURPHY WAS A very unhappy man: a white American in a foreign land with no friends. There were many instances when he had second thoughts about his posting in Kenya. He wondered if this was a good career move. He wasn’t really getting anywhere. When he thought about his future along with that of his wife and child, oftentimes he had nightmares.

Murphy struggled for the first two years just to set up the company. All along, his feeling of insecurity deepened, driving him to isolate himself from his employees even further. He projected a slightly overbearing, snobbish attitude, much to the dislike of his employees, and felt that as general manager of the company, he ought not to mingle with the employees. He never talked freely with the workers in the plant, or engaged in conversation with any office employees below a certain grade, and considered it below his dignity to do any form of menial job. In fact, his formal, businesslike attitude actually distanced him from his staff.

Unfortunately, in so doing, he had completely misunderstood the Kenyan psyche. His workers, jovial fun-loving mortals, mostly from humble backgrounds, respected him as their boss, never saying anything that would offend him.

Murphy’s biggest shortcoming was that he had failed to understand the culture in the country. Kenya was a multicultural country, where people co-existed peacefully, each person respecting and admiring the custom and culture of his neighbor. His was a relatively small company, with a dozen or so key employees, who all mingled and talked freely. They visited each other socially and shared in each other’s problems, like one big family.

Out of respect, the locals addressed Murphy: Bwana kuba—big boss, and he behaved like one! In doing this, he had missed out. By not blending in with the employees, he’d become an outcast. And since he adopted an arrogant, authoritative stance, none of his employees had the courage to tell him of the real problem at the government offices.

The fact that he never went to any of the government offices himself, leaving it mostly to Musa, took him longer to understand the real problem. It took him almost two years before he heard through the grapevine about the constant need to dish out money at the government offices. In one incident when Musa told him that the city council was late in issuing the annual trade license because their printing equipment had broken down, he cursed beneath his breath, "I know. The goddamn government machinery is squeaky, rusty, always breaking down, constantly requiring lubrication."

Lubrication—that was the key word. By now, he knew the exact implications of the word, and it left him feeling disgusted. First, it was against his nature to make payoffs, and second, even if he were indifferent, his hands were tied, on account of the company policy.

In reality the company policy was extremely unambiguous on this issue. It did, in fact, allow managers to make ‘grease payments’ which were merely small inducements to government officials to expedite paperwork, without influencing their decision to act favorably toward the company on account of the payment. But the line between what could be interpreted as straight forward ‘grease payment’ or blatant ‘bribery’ was too thin, too subtle. Murphy did not want to involve himself with this mess.

Besides, even if Murphy did take the risk to pay the amounts, there was still another dominating matter he couldn’t possibly ignore. The number of instances these small payments needed to be made would openly render his decision to call them ‘grease payments’ questionable. Therefore Murphy desisted from involving himself with any of this.

TIME PASSED RAPIDLY, AND even before Murphy realized it he had already completed more than four years in Kenya. By now he had hired almost all the key employees in the company and his plant was fully operational. The plant manufactured a wide range of drugs such as paracetamols, antacids, antiseptic and acne creams, mouthwashes and cough mixtures.

Despite having a full-scale operation, Murphy wasn’t achieving the projected sales necessary to support the operations. On the surface, there was no reason for him not to do well in Kenya, yet he was struggling. He had used all his marketing skills, undertaken extensive market surveys, hired experts to launch the products, spent an enormous amount of money in advertising and yet not one of his products was showing any real signs of success. The company was making heavy losses. The only reason it was still surviving was because of the financial support afforded by the head office. If the support were withdrawn, the company would close down overnight.

All along, Murphy remained under heavy pressure. His superiors at the headquarters in New York were pushing him for results. Up until now he had survived by making excuses. At first he told his masters that the company was having teething problems in a new environment. Then he told them that the company’s products were still finding resistance in the market. Later he pleaded he was having difficulty in hiring suitable personnel to carry out the chief functions in the company.

But now, well into his fifth year, he was fast running out of excuses. The only key position not yet filled was that of the financial controller. The head office had made substantial investment in setting up a full-fledged subsidiary in the country and was pressurizing Murphy to appoint a suitable person to take over the financial control aspects of the company.

Murphy had desisted from appointing a financial controller for two reasons: First, the simple reason of avoiding the extra overhead, which in turn would mean generating that much extra sales and profit to justify the engagement; and secondly, out of the latent fear that an additional key employee would be an added threat to his own position.

Murphy was all too aware that if he fulfilled his sales and profit objectives, the head office would applaud him and reward him with a fat bonus check; conversely, sooner or later, he would be fired. Without adequate results, Murphy was worried stiff that his position as country manager was increasingly becoming untenable.

His existing accounts department consisting of a handful of junior employees had thus far managed to keep the head office relatively happy by submitting most of the reports required by the company, but as the company’s activities were steadily growing, the appointment of a competent financial controller became unavoidable.

Therefore, reluctantly yielding to head office pressure, early June 1981, he placed an advertisement in the local press seeking an energetic, newly qualified accountant aspiring to work for a U.S. multinational.

He then conducted the necessary interviews.

CHAPTER 3

July 1981

Under the morning equatorial sun, Scott Taylor parked his car and stood on the paved street, briefcase in hand, as his eyes caught sight of the kiosk selling cigarettes, cold drinks, tea and bread. The lowly shack constructed out of pieces of timber and sheets of tin was an eyesore in an otherwise pristine setting. It was obviously an illegal structure, built through the blessings of the bureaucrats in the government offices who had conveniently turned a blind eye, obviously not without some sort of inducement, which doubtlessly the owner coughed up on a regular basis. Taylor noticed the keen-eyed owner in a brown leather jacket and a baseball cap, a young man in his early thirties holding a couple of cans of soft drinks in his hand as he raved and laughed, serving the two gentlemen standing at the kiosk.

Taylor looked at him furtively, admiring his spirits. The country was rapidly changing. There was a new vigor in the air, an undaunted energy hungry to achieve. Kenya was Independent, and with it had come the promise of a bright new future. The adage of the day was: Live and let live.

People passed by, hastily, lost in their own worlds, doing their own things, some legit some clandestine, but without the hassle of undue interference. Taylor walked by, wondering who was doing what.

The city was spotless and sparkling, the buildings were tall and modern, the streets lined with lush green trees on either side. Taylor walked past clothing stores that were chic and trendy, stocking the latest fashions, keeping up with the demands of the burgeoning city elite. The streets were wide and attractive, sprawling with cafes, from which oozed the sweet aroma of freshly brewed coffee.

Taylor took a deep breath, relishing the smell of coffee as he quickened his pace, heading for the prestigious five-star hotel, only a short distance away where he was to attend a job interview.

DAVID MURPHY SAT AT his desk, studying the newly hired accountant wearing a dark suit.

The son of a white farmer from Colonial times, Taylor was tall, slightly underweight, impressive and extremely young. He had sharp, chiseled features and wavy, brown hair. He had recently qualified as a certified public accountant with an international firm of auditors, and had joined the company to diversify his experience into commerce. He spoke freely and had an easy-going personality about him, which Murphy mentally attributed to his youth.

They were sitting in Murphy’s top floor office, discussing the company’s finances after Taylor had reported for work on his first day promptly at eight o’clock.

I’d like you to know that we are still a relatively small company—with very little money coming in and substantial amounts going out as overheads. In the finance and administration department, we have Abdul who is the chief accountant with a complement of seven account-clerks. In addition, the costing department, headed by Nathan Simba also reports to him, Murphy spoke slowly.

Taylor listened attentively as Murphy briefed him about the accounting function.

When Murphy had finished, Taylor asked, Can you give me some idea as to how we market our products?

We deal mainly in pharmaceuticals. Many of these are imported from our affiliated companies in Europe and the States, Murphy went on to explain. "These are marketed by our sales force, which consists of fifteen trained sales representatives who canvass doctors to use our products. The doctors issue prescriptions to the patients and the patients buy the drugs from retail chemists.

We do not supply direct to the chemists, but instead supply our appointed pharmaceutical distributors, through whom the chemists purchase their inventory. This is the prescription side of the business. Murphy jotted down ‘Prescription Drugs’ on his pad as he explained.

Under this line of business we have almost hundred and thirty different products ranging from anti-malarials, cough syrups, anti-ulcer drugs, antiseptics, vitamins, anti-convulsants, and so on. If you count the different strengths and formats these medicines are presented in, our product list exceeds two hundred items. And that’s only a fraction of the product lines that the company deals in worldwide, emphasized Murphy, staring at the accountant.

Then he wrote ‘OTC Products’ on his pad. The other area of our business is over-the-counter products. These are essentially non-prescription drugs sold by supermarkets as well as chemists. These include mouth-washes, analgesics, indigestion and constipation tablets, cold and cough remedies and acne products—just to name a few. He paused.

"Then there are two other major product lines that we manufacture locally. There is an antiseptic soap called Fresto and there’s a liniment for muscular aches and pains called RexoLint." Murphy rose to pick up the company’s product list from the top shelf.

Just then the intercom on his desk buzzed. It was his secretary’s voice, Mr. Murphy, I have Duncan Carvalho on line two. He wants to speak to you regarding the vitamin drops.

OK I’ll take that, he said. Then, pointing at Taylor, Grab that product catalog and study it. We’ll resume this discussion after lunch.

Taylor stood up, picked the glossy brochure headed Anglo-Marshall (Kenya) Limited-Price List and walked out of the room as his boss picked up the phone.

The little cubicle outside Murphy’s room belonged to his secretary, Catherine. The next room along the corridor had a massive table in the middle with a dozen chairs all around it. This was the conference room. There was no one in it. Finally, he reached his own room. It was average in size and made out of glass, and wood panels.

There was nothing fancy about the room. The furniture was functional rather than designed to impress. A moderate teak desk, on which sat an intercom and a telephone, filled up the space in the room. At the edge of the desk lay a couple of empty office trays and a writing pad.

Taylor walked around the desk and examined the swivel chair. It looked new. Yes, it had to be new reflected Taylor, as he was the very first person ever to fill the position of the financial controller. Taylor eased himself into the chair and glanced opposite, at the wall. There was hardly any wall to see. Two solid filing cabinets bulging with old ledgers and files, probably containing legal or other important papers obscured the wall. The cabinets had pull-down shutters, but no one had taken the trouble to use them. Taylor stood up and strode to the cabinet. He ran his fingers through some of the overflowing paper, trying to arrange it. It was a mess and could definitely do with some sorting, later.

He then noticed the carpet on the floor. It was the same pattern as in other admin offices. It showed some signs of wear and tear, but was clean.

Finally, Taylor once again settled down in his chair and scanned through a few of the products listed in the company’s catalog, trying to grasp the company’s business.

IT HAD TAKEN SCOTT TAYLOR three separate interviews before he landed the job.

Anglo-Marshall Inc. is amongst the top five Healthcare companies in the U.S. and is listed in the Fortune Magazine as one of the top hundred U.S. corporations in sales. We are taking you as part of the management team and expect you to participate in the management decisions of the company. That’s what Murphy had said during the interview process back at the down town hotel.

There were plenty of Multinationals from different parts of the world that had set up businesses in the capital city, Nairobi. Some of these multinationals were established in prestigious high-rise buildings, and were renowned for their ostentatious display of wealth and sophistication.

Therefore, it was no surprise that when Scott Taylor arrived at the offices to report for work, he had expected to find a similar situation with his new employer. However, he was somewhat disappointed by the mediocre quality of the company’s premises.