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‘Brown sheep’ among expats

HAVING KNOWN Rajat Gupta as an eloquent, global professional par excellence, I was intrigued to read that he sat stoically and unemotionally through his trial; up until he was pronounced guilty on grounds of conspiracy and insider trading.

His career accomplishments as the global head of McKinsey, followed by board memberships of Goldman Sachs and Proctor & Gamble would have seasoned him sufficiently to weather any and all complex adversities, in the realms of corporate business and governance.

Even the jury appears to have been left distraught, expressing sympathy for a man that exemplified “the American dream” - an ‘orphan’ from Kolkata, India, easing into the top echelons of the American corporate elitedom.

Therefore, after all that will be said and done about and to Rajat, a few questions arise in our minds. First, why did he not settle with the Securities & Exchange Commission (SEC) earlier — when offered to be let off with a monetary penalty?

Secondly, why did he not defend vigorously, with all the authority and expertise, that he no doubt possesses? Even his daughter testified so movingly; which some regarded as a tactic to appeal to the jury’s emotions.

Thirdly, Rajat did not seemingly have a motive or derived any benefit from the ‘insider trading’. Only, circumstantially, could it be argued that he may have helped Galleon / Rajaratnam; as the latter had raised money for Rajat’s private equity fund (“the New Silk Route”) or to help recoup $1 million of losses in his investment in Galleon or support for Rajat’s philanthropical foray. Such quid pro quo adds to the angst felt by us, over and above being aghast at the fall from grace, like a meteor, of the Indian-American community’s brightest professional star (i.e. apart from Vikram Pandit and Indira Nooyi).

US Public Attorneys in Manhattan (Rudy Guilani earlier) and now Preet Bharara (an Indian Amercian) have targeted Wall Street veterans in ethical probes to set an example! Heaven forbid, but if you are a star on the US corporate firmament and your conduct comes under scrutiny, then it could be ‘curtains’! The media and the investigating agencies are on your trail, such that the much-vaunted professionals become much maligned; even before a conviction in the Courts. ‘Naming and shaming’ takes a new meaning, leaving any self-respecting professional humiliated.

Rajat’s attorney has now announced an appeal against the verdict and he may well escape with a lighter sentence than the 25 years in the slammer. He may even go ‘scot free’; but once his ‘name’ was sullied, no eventual exoneration will quite redeem it.

His legal expenses, running at $30 million, are bankrolled by Goldman Sachs and P&G who will, however, recover the amounts advanced to him with other penalties — denting his hard-earned wealth of $160 million!

Perched on a high moral ground, his predicament can be attributed by us to the corporate world’s ‘greed factor’ and unethical ‘bent’ among its high and mighty! A more objective yardstick in legal parlance is termed ‘grossly negligent and wilful misconduct’ i.e. a lapse by a senior specialist would be regarded as gross negligence / wilful misconduct; whereas for a junior person, this would tantamount to negligent misconduct only.

Rajat’s episode reiterates the truism that, as you go higher in career and business, you need to conform to the highest standards, day after day. Even a single misdemeanour can ruin reputation that’s been built brick by brick and done over a long period of time.

Few can be as saintly as a Mahatma Gandhi or Mother Theresa. Indeed, many of us have both Dr. Jekyll (the good to great) and Mr. Hyde (the bad to evil) in us. It is the level, one operates in; as well as the proportions of ‘black and white’ that determine one’s credibility and reputation.

‘Mea Culpa’ and ‘Caesar’s wife’ have Greek and Latin connotations. Today, Greece and its Latin neighbourhood are in shambles. That, however, is another story!

The author is a veteran banker and now Chairman, Values Group