26 August 2016

Whistleblower law firms look to India

The rising number of drug manufacturing-related violations in India and increasing presence of large US companies in the country are leading whistleblower law firms to search for their potential clients there.

By Victoria Basham


The Economic Times reports that the interest of such firms in India has grown after the Ranbaxy scandal, in which a former employee walked away with a $48m reward from the US Department of Justice after bringing to its attention the company’s involvement in supplying adulterated drugs to the US Medicaid programme.


Firms such as Constantine Cannon, and Kohn, Kohn & Colapinto (KKC) Partners are scouting for employees of outsourcing companies that do work for US entities or companies with US operations to report frauds, offering them complete anonymity and legal services linked to possible compensation.


The potential awards for whistleblowers and the growing trend for such people to come from outside the US mean it is not hard to see why firms are tempted to offer a more professional service. The US recovered a total of nearly $4.5 billion under the False Claims Act and the Securities Exchange Commission (SEC) whistleblower programme in 2015 alone, with awards for whistleblowers ranging from 10 to 30 per cent of the money collected in a case. Since its inception in 2010, the SEC’s office for whistleblowers has seen a growing number of tipoffs coming from China, Australia and India, and according to Constantine Cannon partner Tim McCormack at least four awards have been made to whistleblowers who reside outside of the US, including the SEC's largest award yet of $30 million.

Targeting India

Mr McCormack added that his firm is actively looking to expand international operations and India is one of its important target countries, while KKC Partners has set up a global whistleblowers’ website that explains how to submit information secretly in 10 Indian languages.


But lawyers in India have emphasised that whistleblowing can be a risky venture for Indian employees, who risk legal action from their employer. The risk of employees reaching out to whistleblowing firms and legal requirements set by the Company's Act have also prompted several Indian companies to set up internal an whistleblowing mechanisms, in an effort towards better transparency.

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