Arun Jain, the ex-chairman of Polaris Software – where I was the Group CFO at a certain point in my career – was arrested in Indonesia in 2002, during a meeting to resolve what appeared to be a business misunderstanding.
He was a well-respected entrepreneur in the fledgling IT sector of the time and the enormity of the event sent shockwaves through the Indian industry. It also exposed the weakness in the contracting abilities of young IT companies and the twin questions of credit and fraud/corruption risk within the larger country risk basket.
Having worked in Jakarta on the board of a major US MNC in the mid-nineties, I was fully aware of the perils of "managing the environment," in the context of strict US laws and the realities on the ground in Indonesia. However, I had the luxury of asserting, rather proudly, to my multi-national colleagues on the board, that "such things do not happen in India".
The reference was to corporate leaders being arrested on trumped up charges by the police, conveniently crossing the line between civil and criminal cases in genuine business disputes and personal use of the state enforcement bodies to settle arguments – in a blatant violation of the law.