November 8, 2001 the entrepreneurial owner of Flex Industries, a leading Indian company in the flexible packaging industry, has been accused of bribing the Central Excise Commissioner in case of evasion of excise duties. Excise taxes are levied in accordance with the federal structure of the Indian tax system in the production and manufacturing of goods. Excise duty liability arises immediately on the movement of goods from the factory gate. Evasion of excise duty is a cognizable offense and carries severe penalties, which could adversely affect the management of the company. The owner of Flex Industries, was an experienced professional recognized for his important contribution to the revolution of flexible packaging in India. However, the incident dented his old record. Meanwhile, other contradictions surfaced while the case is on the location of the courts. The ensuing period gives the impression that there have been other developments suspect related to its control, Flex Industries could have done without. However, the final verdict has been announced by the court found the owner's fault. Events were significant in the evolution of Flex Industries, which has been strongly positioned in the flexible packaging industry. However, the market reaction to the news of the arrest of the owner of Flex Industries' is very different from the news of his release. This case demonstrates the influence of market forces discipline and place premium on the questions of good governance. "Hide
by Mohammed Akbar, Anurag Mishra Source: Richard Ivey School of Business Foundation 14 pages. Publication Date: January 29, 2008. Prod. #: 907M76-PDF-ENG
Related Case Solutions & Analyses:
Governance and Talent Management in a Professional Services Firm
The Bottom-line Benefits of Ethics Code Commitment
ATH MicroTechnologies: Making the Numbers
Critical Competitive Strategy Issues Every Entrepreneur Should Consider Before Going into Business
Camp Dresser & McKee: Getting Incentives Right
Interview with Philip Casey at AmeriSteel Video
ISSC Solution Center–Dallas: Transforming Software Development
Managing in an Information Age: Organizational Challenges and Opportunities
Fischer Francis Trees & Watts
Charles River Jazz Festival
