Anti-Bribery and Anti-Corruption Policy

Introduction

The Anti-Bribery and Anti-Corruption Policy (‘Policy’) sets out the policy of IIFL Finance Limited (‘IIFL’ or ‘Company’) on combating bribery and corruption and to conduct Company’s business in an honest and ethical manner. IIFL takes a zero-tolerance approach to bribery and corruption and are committed to act professionally, fairly and with integrity in all our dealings wherever we operate. IIFL is also committed towards implementing and enforcing effective systems to counter bribery and corruption. The Policy prohibits offering, promising, giving or authorizing others to give anything in excess of a certain value, either directly or indirectly, to any person or entity, thereby setting out Company's standards on bribery and other forms of unlawful payments and provides guidance on combating corruption and to conduct all of our business in an honest and ethical manner.

Purpose
  • To provide information and guiding principles to prevent any activity or conduct relating to bribery, facilitation payments or corruption.
  • To guide employees to act professionally, fairly and with utmost integrity in all their business dealings and relationships, wherever they operate.
Scope

This Policy shall apply to employees including directors, officers, shareholders of the Company and all appointed third party representatives of Company such as agents, consultants, others working on behalf of the Company irrespective of their location, function or grade (‘Business Associates’). All those providing services on our behalf are expected to undertake their business without bribery or corruption.

All parties shall comply with all applicable anti-bribery and corruption laws and regulations when doing business on behalf of the Company. These laws include the US Foreign Corrupt Practices Act, 1977 (FCPA), the United Kingdom Bribery Act 2010, the Prevention of Corruption (Amendment) Act, 2018 (Amendment Act), and other applicable laws relating to anti bribery and anti-corruption.

IIFL shall appoint third parties as agents and contractors with high repute and who have committed to adherence with all applicable laws and regulation.

Definitions
  • Bribery is the offer of undue reward by or to any person in a public sector, private employee, colleague or representative of another organization in order to influence his / her behaviour in office and to induce them to act in contravention of the rules and regulations, ethics, trust and integrity.
  • Corruption is the abuse of entrusted power for private gain and typically involves Bribery.
  • Facilitation Payment means are payments to induce officials to perform routine functions they are otherwise obligated to perform, are bribes.
  • Objectionable Practice means any Corrupt Practice, Fraudulent Practice, Money Laundering Activities, Obstructive Practice, Sanctionable Practice or Terrorist Financing.
  • Corrupt Practice means
    • the promising, offering, giving, making, authorising, insisting on, receiving, accepting or soliciting, directly or indirectly, of any illegal or undue payment, bribe, kick-back, or advantage of any nature, to or by any person, with the intention to, or the knowledge that such payment or advantage may, directly or indirectly influence, whether as inducement or reward, the actions or decisions of any person, including causing any person to refrain from any action or decision; or
    • any action or omission which is prohibited in any applicable jurisdiction by law or regulation relating to bribery or corruption.
    • Fraudulent Practice means any action or omission including misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party to obtain a financial benefit or to avoid an obligation.
    • Illicit Origin means any origin which is illicit, criminal or fraudulent, including without limitation, corruption, Terrorist Financing, and tax evasion.
    • Money Laundering Activities means the process of moving funds of Illicit Origin through a cycle of transformation to create the end appearance of legitimately earned funds. The process of moving funds consists of providing, receiving or assisting in transfer of funds.
    • Obstructive Practice means
      • deliberately destroying, falsifying, altering or concealing evidence material to the assessment or the making of false statements to those performing the assessment, in order to materially impede an assessment of allegations of a Corrupt Practice, Fraudulent Practice, Money Laundering Activities, or Terrorist Financing and/or threatening, harassing or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the assessment or from pursuing the assessment; or
      • acts intended to materially impede the exercise of IIFL’s access to contractually required information in connection with an assessment of allegations of a Corrupt Practice, Fraudulent Practice, Money Laundering Activities, or Terrorist Financing.
    • Sanctionable Practice means any business activity or transaction with any entity, individual or country which at or during the time of such business activity or transaction is included on the lists of sanctioned entities, individuals or countries published and updated from time to time by the Reserve bank of India (RBI), Office of Foreign Assets Control of the US Department of Treasury (OFAC), the European Union or the United Nations.
    • Terrorist Financing means financing terrorists, terrorist acts and terrorist organisations.
    The key principles

    IIFL and its Business Associates shall refrain from:

    • Offering or suggesting a bribe, or authorize the offer or suggestion of a bribe;
    • Paying bribes;
    • Soliciting or accepting a bribe to influence a decision, to obtain unauthorized access to confidential information, or to commit or omit to do an act, irrespective of a similar outcome without the bribe;
    • Making Facilitation Payment;
    • Using another party to conduct any of the above;
    • Appointing vendors or suppliers that have not committed to adherence with all applicable laws and regulation, specifically with respect to bribery and corruption;
    • Processing funds known to be, or reasonably suspected of being, the proceeds of bribery or corruption.

    In all circumstances, any demand for Facilitation Payments must be reported to the Chief Anti-Corruption Officer immediately at anticorruption@iifl.com.

    Scenarios
    Policies and guidance cannot cover every circumstance and therefore, few questions have been listed down to provide some guidance for making decisions towards appropriate business conduct. If you can answer yes to following quick questions, you might feel comfortable in proceeding.

    • Is the action legal?
    • Is it right? Is it honest?
    • Is the action consistent with the terms and spirit of this policy and our values as a business?
    • Does it avoid creating a sense of obligation?
    • Can I justify this to my manager, the responsible person and to my family?
    • Would I feel comfortable if the action became public knowledge?

    In any case of doubt, reach out to discuss the situation with the Chief Anti-Corruption Officer. The following are examples of relationships and events that could lead to a higher risk of bribery and corruption.

    1. Fee payments
      Where an agent or intermediary is used to make introductions to officials of public or government bodies and agencies, steps must be taken to ensure that any fee paid by IIFL is proportionate to the activity being performed and in accordance with local law and the requirements of this Policy.
      No such fee payments can be made without the express approval of the immediate Reporting Manager or Head of Department.
    2. Charitable donations
      IIFL shall not directly or indirectly make any political contributions, donations or sponsorships in any country. Any charitable contributions or donations shall be made only with the approval of the Managing Director or the Joint Managing Director of IIFL Finance Limited or any of its subsidiaries, as the case may be. All charitable contributions and sponsorships shall be disclosed to the public. When funds are donated in IIFL’s name for charitable purposes, appropriate due diligence must be conducted to ensure that, where a public official or public body is associated with the charity, written agreement is obtained.
      Any charitable donation must always be made directly to a recognized charitable organization and not via another party or individual.
    3. Public officials
      Appropriate due diligence must be conducted when public officials, their relatives or their close associates are invited to any entertainment provided by IIFL, or when payments are made to them by or on behalf of IIFL.
    4. Political donations
      No political contribution to a candidate for public office, an elected official, a political party or political action committee, can be made, on behalf of IIFL without prior approval of the Managing Director or the Joint Managing Director of IIFL Finance Limited or any of its subsidiaries, as the case may be.
    5. Offers of employment
      Care must be taken when providing work experience or employment to people that are connected to, or are relatives of, senior public officials. Although it is not prohibited to employ such staff it is important to avoid any perception that any hiring is for an improper purpose. Where such a hiring is being considered, approval from the Head of Department must be obtained.
    Chief Anti-Corruption Officer

    IIFL shall have a nominated Chief Anti-Corruption Officer responsible for overseeing and reporting the implementation of this Policy. The Chief Anti-Corruption Officer shall be sufficiently senior to be fairly regarded as independently minded.

    The responsibilities of the Chief Anti-Corruption Officer shall include:

    1. Designing and implementing an effective anti-corruption program in accordance with the Policy
    2. Providing necessary direction and support in adherence to the Policy
    3. Timely reporting of suspected violations to the Company’s Audit Committee of the Board
    Gifts and Hospitality (Gift Policy)

    A “Gift” means anything of value, including but not limited to meals, lodging, loans, cash, discounts on any product or service, services, prizes, products, tickets, gift certificates, gift cards, etc. Gifts to any family member or relative including but not limited to payments to a family member or relative or employment of a family member or relative are deemed Gifts receive by the employee. Exchange of gifts with people with whom we do business is a part of normal business relationships. However, if such exchange of gifts or different types of favours are frequent and of substantial value, then it shall create the appearance of a kind of bribery or can create conflict of interest. IIFL sets specific limits on the types and value of gifts an employee is permitted to accept in connection with their employment and requires visibility and disclosure of gifts regardless of type or value as described below.

    1. Purpose and Scope
      • Build Goodwill
      • Maintaining uniformity in exchanging gifts
      • Solidify working relationships among business associates
      • Improving relationships with customers
      • Improving coordination with the Vendors
    2. Scope

      This Gift Policy shall apply to all employees of IIFL as well as its subsidiary and associate companies. Any violation may result in disciplinary action up to and including termination of employment.

    3. Policy for Gifting
      • If you receive a Gift that has a value equal to or greater than Rs. 1,500 (Rs. One Thousand and Five Hundred only), which directly or indirectly relates to your employment with IIFL (whether from any of IIFL’s vendors, business partners, customers, competitors or any others) (“Employment Gifts”), you must politely return it citing company policy
      • If you have any uncertainty whether a Gift is an Employment Gift, you must assume that it is, and provide notification to your Reporting Manger/Head of Department. For example, if a vendor who is also a personal friend gives you a birthday present, you must report it as an Employment Gift to your supervisor and the Head of Department
      • It is important to avoid even the appearance of impropriety. Consequently, every transaction that you personally engage in with a vendor, competitor, business partner or customer should be considered and evaluated as an Employment Gift even if you believe the transaction involved fair and full consideration between the parties. For example, if a vendor provides employment to a family member, the amount of compensation and a description of the employment relationship must be provided. If you buy or sell a car to or from and IIFL business partner or its employee, report all relevant information
      • Gifts to any family member are deemed Gifts received by them, the employee. Gifts to any person or entity at their or for their benefit are also deemed Gifts received by them
      • In case of Employment Gifts made to the Company for general distribution to our employees, with the exception of employment gifts given by the HR Department during events (for example as part of a celebration event, such as a contest prize, or as a performance reward), the most-senior member of the department that receives the Employment Gift (the “Reporting Employee”) must report the Employment Gift in writing (typically by e-mail) to his or her immediate supervisor and the Head of Department, within three (3) business days following receipt of the Employment Gift
      • The notification, in case of Employment Gifts made to the Company, must include, at a minimum, a complete description of the Gift, the actual value of the Gift (or if the actual value is not readily available, a reasonable estimate of the value of the Gift with verifiable documentation supporting the estimate), the date the Gift was received, the person or entity that provided the Gift and their relationship with IIFL, and the manner in which the Gift was or will be distributed to employees (e.g., a random raffle, as a reward for performance, as a prize in a contest)
      • In case of Employment Gifts made to the company, it is the responsibility of the Reporting Employee to retain an email or hard copy of every such notification they send. The employee who ultimately receives such a Gift is not required to submit a separate Employment Gift Notification
      • In case you have any uncertainty whether an Employment Gift falls under this limited exception or requires separate Employment Gift Notification from them directly, you must assume that it does require a separate Employment Gift Notification from them directly, provide notification and comply with the prior written approval and/or substantial business purpose determination requirements specified above, if applicable
    4. General Guidelines for Employees
      • The exchange of Gifts must be conducted in a way that there is no appearance of bribery. Gifts should not be given or received either to obtain favours/preferential treatment or in return for favours/preferential treatment.
      • No gifts are acceptable to be offered or received which might violate the ethical values of the giver’s/recipient’s company such as discriminating based on race, religion or culture.
      • Only gifts which have been approved by your immediate superior may be retained by the person to whom they have been given; otherwise, it shall be handed over to the employing company
      • Employees must ensure that they determine the appropriateness of various kinds of gifts at the me of accepting.
      • Gifts fall into three categories:
        • Appropriate Gifts - Accepting or offering social amenities or business courtesies such as modest favours, Gifts or entertainment can, in appropriate circumstances, create goodwill and enhance business relationships. Using good judgment and moderation, occasionally exchanging favors, Gifts or entertainment of nominal value with employees of a non-governmental entity is appropriate, provided the notification, approval and substantial business purpose determination requirements specified above are complied with.
        • Inappropriate Gifts - Other types of favours, Gifts and entertainment are simply wrong, either in fact or in appearance, so that they are never permissible, and no one can accept or approve these Gifts. Employees (which term, as a reminder, includes family members and others as described above) may never engage in the following activities in connection with their work at IIFL:
          • Offer or accept cash or cash equivalents, including but not limited to stock or other securities and gift certificates, gift cards or discount cards (even if only redeemable for merchandise);
          • Offer to accept favours, Gifts or entertainment that would be illegal, including but not limited to, bribes, kickbacks and similar matters;
          • Offer, accept or request anything as part of an agreement to do anything in return for favours, Gifts or entertainment.
        • Questionable Gifts - Anything that does not fall into either of the two categories above may or may not be permissible depending on the facts and circumstances of the Gift. In determining whether to approve something in the “Questionable” category, Executive Vice Presidents should consider the following factors:
          • Whether the favour, Gift or entertainment would likely to influence the employee’s or businesses partner’s objectivity;
          • Whether there is a substantial business purpose for accepting the Gift (for example, business will be discussed as part of the event);
          • The precedent that will be set for other employees;
          • How the Gift would appear to the other employees of people outside the Company.
    Policy Administration
    • Training All Employees working in areas seen as susceptible to bribery and corruption risk, are to receive appropriate training, including refresher training, relating to this Policy and related policies and procedures periodically. All newly hired Employees shall receive such training as part of their induction. The Chief Anti-Corruption Officer shall be responsible for imparting such trainings.
    • Monitoring and Oversight Chief Anti-Corruption Officer shall monitor, review and at least annually report on the effectiveness of and adherence to this Policy, and the steps taken to implement it to the Audit Committee of the Board of IIFL Finance.
    • Auditing IIFL’s internal and external auditors will include an assessment of the implementation of this Policy.
    • Third Parties The Company’s zero-tolerance approach to bribery and corruption shall, wherever relevant, be communicated to all third parties at the outset of the Company’s business relationship with them and as appropriate thereafter. Wherever possible, all such third parties shall also be sent a copy of this Policy at the outset of the said business relationship and periodically throughout the term of the relationship.
    • Annual Certification All employees shall be required to give an annual certification confirming their compliance with the Policy.
    • Review The Policy shall be reviewed annually by the Board of Directors or more frequently as may be required.
    Business Associates
    • IIFL may conduct screening procedures on its Business Associates who supply material goods and services to the Company, as sought fit, to protect IIFL from the risk of it being associated with or benefiting from corrupt payments, and to ensure that the highest ethical standards are maintained.
    • Business Associates shall be made aware of this Policy with necessary clauses in the service-level agreements and a confirmation that they will not participate in any transaction that will put it in breach of the Policy, and that such Business Associates have adequate procedures for preventing their own staff engaging in the giving or receiving of bribes, kickbacks, or facilitation/speed payments.

    Consequences of Breach Breach of this Policy by any Employee or Business Associate shall be regarded as a serious misconduct. Any Employee who breaches this ABC Policy may be subjected to disciplinary action, which may include termination of employment. If it comes to the knowledge of the Company or any of its subsidiaries that any Business Associate engages in any Objectionable Practice, then such Business Associate shall be blacklisted and no longer be permitted to represent or act for or on behalf of IIFL.

    Internal Record Keeping The Company shall make and keep books, records, and accounts that conform to the highest professional standards of accuracy and consistency and that, in reasonable detail, accurately and fairly reflect the Company’s transactions.

    Reporting of Violations Employees are required to report known or suspected violation of the Policy at the earliest possible stage. The Vigil Mechanism and Whistle-blower Policy of IIFL provides a mechanism for its Employees to raise concerns on any financial irregularities, or violations of policies or law, etc. For more details, refer to the procedure for reporting and dealing with disclosures under the Vigil Mechanism and Whistle-blower Policy of IIFL.
    No employee will suffer demotion, penalty, or other adverse consequence for refusing to pay or accept a corrupt payment even if such a refusal may result in IIFL losing business or failing to win a deal.

    Violation Consequences In case of failure to comply with this Policy or any misrepresentation, disciplinary action, as considered appropriate, will be initiated by the organization, including termination of employees as per the organization code of conduct and may involve criminal or regulatory proceedings for individuals and the Company.