You have just been appointed as the Finance Director for southeast Asia of a large multinational bank (the Bank of North
Posted: Mon May 02, 2022 9:57 am
You have just been appointed as the Finance Director for
southeast Asia of a large multinational bank (the Bank of
Northeastern States), based in the United States and headquartered
in Boston, Massachusetts. You have been posted to a recent
acquisition of a Stock Market listed manufacturing plant, Peninsula
Transport located in a small township some 40 kilometers outside
the capital city of Indonesia. Your instructions are to asset strip
the acquired company and then close it down within one year.
Two weeks into your appointment and having just arrived in
Jakarta you are given a company-provided apartment and have spent
several days unpacking and settling in with your family. Today is
your first day at work and Mr. Mohamed, the incumbent CEO a man who
has inherited the company from his father informs you that he knows
exactly why you are in Indonesia and begs you not to close his
company. As the day progresses, you begin to realize that before
the $ 100 million acquisition, the factory had been a wholly owned
family business that had served the community for more than four
decades and employed just under half the town’s available workforce
of three thousand people. Indeed, there were many families, some
with three generations in current employment with the company. In
addition, you also realize that many small and medium local
enterprises support the factory and that closing it will devastate
the entire community. The CEO claims that he and his family are
victims of a conspiracy to close the factory and sell the land to
build real estate on it. He shows you a newspaper report from
several years ago that clearly depicts the land surrounding the
town being earmarked for development under the government’s plans
for the future of the area. This involves building several thousand
residential units and expanding the township into a commuter suburb
serving the capital city.
Mr Mohamed informs you that he has rejected several offers from
the government and has successfully fought them in the courts and
obtained ‘heritage status’ protection to overturn a local
government order for compulsory purchase of the land from his
family who have owned it for several generations.
The local CEO also informs you that he has evidence of bribes
and gifts being made by the Bank of Northeastern States to local
politicians, as well as substantial donations to the National
People’s Party, a political party who are the incumbent government.
It is very clear that there is a trail of corruption leading all
the way back to your employers in Boston. That night you call your
CEO at Northeastern Bank to inform him and are shocked when he
responds with threats against you and your family that if you don’t
do as instructed you will be arrested and thrown in jail by local
police. The next morning before you leave for work, you are paid a
clandestine visit by a senior police officer and he also informs
you in a veiled threat that your situation in Indonesia leaves you
and your family very vulnerable. At this point, you realize that
you have been lied to by the Board of Northeastern States Bank and
that they are partners in a web of corruption worth tens of
millions of US Dollars involving local Indonesian politicians and
local police.
You find yourself in a dilemma. If you follow through with your
instructions, you understand that you will be responsible for the
social consequences of closing the factory and will be just as
guilty as those who are involved in the conspiracy. If you don’t
you will be fired and face an uncertain future in which you and
your family, having already been threatened, leave you in no doubt
of the consequences of being arrested and detained in a foreign
country where you have no rights.
Two questions to discuss:
1) What should you do?
2) Why would you do that?
southeast Asia of a large multinational bank (the Bank of
Northeastern States), based in the United States and headquartered
in Boston, Massachusetts. You have been posted to a recent
acquisition of a Stock Market listed manufacturing plant, Peninsula
Transport located in a small township some 40 kilometers outside
the capital city of Indonesia. Your instructions are to asset strip
the acquired company and then close it down within one year.
Two weeks into your appointment and having just arrived in
Jakarta you are given a company-provided apartment and have spent
several days unpacking and settling in with your family. Today is
your first day at work and Mr. Mohamed, the incumbent CEO a man who
has inherited the company from his father informs you that he knows
exactly why you are in Indonesia and begs you not to close his
company. As the day progresses, you begin to realize that before
the $ 100 million acquisition, the factory had been a wholly owned
family business that had served the community for more than four
decades and employed just under half the town’s available workforce
of three thousand people. Indeed, there were many families, some
with three generations in current employment with the company. In
addition, you also realize that many small and medium local
enterprises support the factory and that closing it will devastate
the entire community. The CEO claims that he and his family are
victims of a conspiracy to close the factory and sell the land to
build real estate on it. He shows you a newspaper report from
several years ago that clearly depicts the land surrounding the
town being earmarked for development under the government’s plans
for the future of the area. This involves building several thousand
residential units and expanding the township into a commuter suburb
serving the capital city.
Mr Mohamed informs you that he has rejected several offers from
the government and has successfully fought them in the courts and
obtained ‘heritage status’ protection to overturn a local
government order for compulsory purchase of the land from his
family who have owned it for several generations.
The local CEO also informs you that he has evidence of bribes
and gifts being made by the Bank of Northeastern States to local
politicians, as well as substantial donations to the National
People’s Party, a political party who are the incumbent government.
It is very clear that there is a trail of corruption leading all
the way back to your employers in Boston. That night you call your
CEO at Northeastern Bank to inform him and are shocked when he
responds with threats against you and your family that if you don’t
do as instructed you will be arrested and thrown in jail by local
police. The next morning before you leave for work, you are paid a
clandestine visit by a senior police officer and he also informs
you in a veiled threat that your situation in Indonesia leaves you
and your family very vulnerable. At this point, you realize that
you have been lied to by the Board of Northeastern States Bank and
that they are partners in a web of corruption worth tens of
millions of US Dollars involving local Indonesian politicians and
local police.
You find yourself in a dilemma. If you follow through with your
instructions, you understand that you will be responsible for the
social consequences of closing the factory and will be just as
guilty as those who are involved in the conspiracy. If you don’t
you will be fired and face an uncertain future in which you and
your family, having already been threatened, leave you in no doubt
of the consequences of being arrested and detained in a foreign
country where you have no rights.
Two questions to discuss:
1) What should you do?
2) Why would you do that?