Rajat Gupta – From hero to zero?

Posted: June 20, 2012 in Corruption
Tags: , , , , , ,

Was Rajat Gupta the fall guy? The right man in the wrong place whose inherent, helpful nature got him into trouble? Or was he a (not-so) smart operator who thought he could get away with it? If you went by the manner in which the American justice system has treated him, it would seem he was the latter.

I’ve been following the case with interest, much for the same reasons as everyone else – the rags-to-riches-to-jail tale of an Indian who made it big in the US. It’s the stuff of Bollywood potboilers – orphaned child who came to the US on a scholarship and went on to make a name for himself – family man, business icon, philanthropist etc etc. From hero to zero.

I’ve also been reading about the reaction of people to his conviction for insider trading. Some Indians (both here and in the USA) believe that there’s more to it than meets the eye. That he didn’t deserve the punishment – he only helped a friend who unfortunately misused that friendship. That he was just being Indian. After all, Indians love to ‘help’ a friend in need with a few tips on the business, don’t they? Unfortunately in the US and elsewhere, such things go under the term ‘insider trading’ and instead of being invited home for dinner and drinks, you could end up spending a decade or more behind bars – and it’s not the kind you can drink in.

A report in the Washington Post quotes one of the jurors Ronnie Sesso saying: “What did Mr. Gupta get out of this by giving Mr. Rajaratnam the information? Was it the future, was it cash?” Ultimately, she pointed to Gupta’s “need for greed: ‘I could get away with it once and I’ll do it again.’”

He had lived in the US long enough to know the meaning of insider trading so didn’t he know that what he was doing could invite a jail term? He must have been privy to info on Raj Rajaratnam who has been referred to as a “snake in the grass” so why did he get onboard with someone like that? If he had no clue about Rajaratnam’s antecedents I can understand, but one finds it hard to believe that a person like him didn’t know.

It’s like when we break a traffic signal, get caught by a cop and then try to bluster our way through by justifying our actions, looking reasonably hurt by the cop’s accusations! Only this is not a traffic offence which involves a few measly hundred rupees but millions of dollars worth of fraudulent deals. And, one presumes, one can’t get away by greasing a few palms, at least not that easily!

Compare that to our legal system. After over 25 years we still haven’t convicted one person for bribes paid in a gun deal! That’s why I admire the US justice system and the way they have nailed people like Rajat Gupta and others. Sure they let people like Madoff get away till the shit hit the fan and a lot of people lost their savings. But then people who invested their savings with Madoff did so at their own risk because the guy was a crook. When the law caught up with him it sent him away for a long time. When did you last hear of a politician or businessman in India getting a life term for cheating the tax-payer?

Messers Kalmadi, Kanimozhi and Raja, were taken in a procession and garlanded after having served some time in jail! Just the other day there was a report about a politician who had 190 companies in his son’s name and thousands of acres of land. Doesn’t the income tax department notice a guy’s changing lifestyle? I am sure they would notice mine or yours and send us a notice. So how come they don’t notice a politician, who didn’t own a two-wheeler a decade ago, now has a fleet of cars and a dozen homes?

If I feel really sorry for anyone, it’s for Gupta’s wife and daughters. They were probably completely in the dark and may not have even known what he was up to. I mean if someone became a millionaire in a space of a few years his family was bound to ask questions about the source of his wealth. In Gupta’s case, he already had an affluent lifestyle. What is worse is that they have to live with the humiliation for the rest of their lives. To discover that their father was being labelled a crook must have been a bigger shock. However much they defend him publicly, they also probably realise that their ‘daddy’ was caught with his hands in the cookie jar.

I guess the weirdest thing about the whole issue is that while Gupta may get 10-20 years in jail, Goldman Sachs and Proctor & Gamble will pick up most of the tab which is around $30 million. Here’s some more dirt, according to a newspaper.

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