(This is an old blog piece of mine)

The broker and the banker

Once upon a time, a bank started a life insurance venture. The bank was astute in its cost management and accordingly, it outsourced marketing (for some region/s)of the life insurance to a known broker. The understanding was that the broker would be reimbursed cost plus a percentage to cover him for providing the ‘cover’.
All was well. One fine day, a few employees left the broker. And went and told the banker that whilst they were reimbursing the broker for over a thousand ’employees’, in reality there were fewer than half the number.
The banker got annoyed and then went to check the facts. Alas. The broker was billing for twice the actual manpower deployed! And the broker was a clever fellow. The excess billing was not passed on to the broking entity, which also happened to be a listed company. He quietly put the difference in his own pocket.
Of course, the arrangement was disontinued. The banker, however was in a dilemma. To lose face or not ? He preferred to remain quiet and continued a ‘broking’ arrangement with the broker.
Our broker was a street smart guy. He knew his goose was cooked. But, being a responsible promoter of a listed broking entity, he promptly terminated the services of the entire gang that was selling the insurance policies. He informed them that henceforth, they could keep ninety percent of the commissions earned on the policies sold by them. However, the company would not pay them a fixed salary. The broker was kind enough to offer the use of office premises, computers etc to the group of ‘ex’ employees.
Now, the bank pretends that the incident never happened. The broker goes about his business as usual, looking for the next banker to con.
So much for corporate governance

One thought on “How to steal a billion

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