India’s Fallen Angel: My Perspective on Rajat Gupta
I am driving back from a wonderful dinner on a beautiful Friday night, the weather is just right: no rain, but pretty cool. In typical fashion, I check my BlackBerry as I wait for the light to turn green. A friend has just tweeted that ‘Rajat Gupta found guilty of Insider trading’. I pull over and look out into the moonlit sky. For a second, everything freezes. In the next moments, I go over everything from denial to anger to disgust. Now, a week has passed, my BBM status still reads ‘Rajat Gupta :((‘ but I feel I owe it to myself to pen this down. I am sure there are many who share my views.
Rajat Gupta’s CV reads like a dream. His professional life (before this unfortunate incident) has been a model for ‘the Indo-American Dream’. Left an orphan as a teenager, he remained dedicated, securing a seat in the prestigious Indian Institute of Technology Delhi (IIT-D) scoring an All India Rank 15. (Even today, the IITs remain the favourite hunting ground for McKinsey, constituting almost half the incoming batch of the Business Analyst Class each year). He then went on to the towering Harvard Business School, another McKinsey feeder school, graduating a Baker Scholar (top 5% of the class).
He took up a career in consulting at the exclusive McKinsey & Co (better known as ‘The Firm’), rising within its ranks to become the first non-US born Managing Director of the Firm and the Indian-born CEO of a top-tier Multinational corporation. He also co-founded the Indian School of Business (ISB), which became one of India’s top-tier B-schools. He also served on boards of some of America’s most well-known institutions including Goldman Sachs, Proctor & Gamble, The Rockefeller Foundation and The Gates Foundation. His Wikipedia page, listing his various contributions and achievements reads like a fairy tale for professionals and students alike.
And the rest is history. Phone taps from the FBI showed that Rajat Gupta called up Raj Rajratnam, the billionaire General Partner of the Galleon Funds, minutes after a Goldman Sachs meeting. Raj bought millions of Goldman shares, ahead of an expected public announcement regarding Warren Buffett led-Berkshire Hathaway’s $5billion investment in Goldman. The phone conversations also show Rajat discussing some business questions (Goldman’s interest in Wachovia), although he is rather qualifying about it. (See his Wikipedia page for the recording).
McKinsey & Co lists ‘Client Confidentiality’ as one of its topmost values, a must-required tenet for a nytrusted advisor to the world’s top decision-makers. The phone calls seem to show Raj as a good friend to Rajat; the two discuss things a man of his position would want to discuss with a close confidant: business strategy of Galleon funds, setting up a new PE fund called New Silk Route Partners et al.
In this friendship is perhaps the greatest tragedy. Rajat, speaking frankly, Indian-to-Indian, friend-to-friend, may have spoken about Goldman to Raj. It is extremely doubtful that he knew that Raj would trade on this information. What is indeed surprising is that Rajat didn’t visualise the insider-trading implications of his actions. We will never know what prompted it: it certainly wasn’t money, Rajat had no money invested in any of Raj’s hedge funds. One can only wonder why he did it, there are no answers to be found no matter how deep you dig.
I thought how: ‘We build a pedestal for our heroes, only to take it away from under their feet’. Rajat’s colleagues and partners at McKinsey have always praised his exceptional intelligence and insight. The who’s who of India Inc, some his personal friends, from Mukesh Ambani to Anand Burman came out testifying to his impeccable character. Various beneficiaries remembered his good work ranging from the American India Foundation to ISB to the US-India Business School. The jurors who brought back his guilty verdict were in tears; one mentioned how heart-breaking it was, considering how much Rajat seemed to love his family.
And thus, Rajat Gupta is a fallen angel. His story reads like a tragedy of the proportions of Marcus Brutus in Shakespeare’s Julius Caesar. Mark Antony, in the same play, says: ‘the evil that men do lives after them/ the good is oft interred with their bones’. Yet, the good that Rajat Gupta will live on. In me and in others who looked up to him. I have been told time and again that op-ed pieces must be written in the third person. But I can’t do that. This goes beyond op-ed blogging: this is personal. I didn’t know Rajat Gupta personally. But he was a symbol of hope and aspiration to me. And he will always be my hero, and nothing can take that away from him or me.
(Views are personal)