Here is a podcast that I did right after the Rajat Gupta tapes leaked for Indicast.
Here is a column I wrote about Gupta. I must have re-written this piece a million times. Here it is at Mint’s page.
Here it is, copied below.
There is a Sanskrit saying that I grew up hearing, Vinasha kaleshu viparitha buddhi. My grandfather used it to sketch out doomsday scenarios, the idea being that as one’s doom approaches, one’s mind works perversely like Ravana when he kidnapped Sita or Duryodhan before the Mahabharat. What fascinated me was the corollary. If your mind works perversely in bad times, can you avert the bad times by adjusting your mind and your behaviour? The original phrase is not predictive. It is fatalistic and talks about a certain doom. But could it be watered down somewhat and applied predictively to prevent mistakes? Let me explain.
Why would a person who has spent a lifetime and a stellar career keeping client confidences break off from a board meeting to make a call to a hedge fund manager? If it was a misstep, could he have somehow intuited it and stopped himself? Perhaps he was simply returning a phone call that he didn’t need to at that moment? Could he have realized that his mind was playing perverse tricks on him; that he was making avoidable mistakes?
Is Rajat Gupta culpable? That’s for the US federal court to decide in the highly watched insider trading case against the billionaire founder of the Galleon Group, Raj Rajaratnam. The word on the street is that Gupta may have been guilty of “over-socializing”, but nothing more. The more interesting question is this: Why now? Why did this happen to Gupta now, after retirement, especially since, as he has said, he spent a career being discreet? As Gupta wrote in his impassioned letter to the dean of the Indian School of Business (ISB), which he co-founded: “I have spent my entire professional career zealously guarding the confidences of my clients. There is no reason for me to suddenly deviate from a lifetime of probity and honour.”
I don’t follow astrology, but I don’t dismiss it either. Astrology claims to let us know when we are going through bad times and offers palliative measures such as wearing certain gemstones. But you don’t need astrology for that. Each of us can tell when we are going through a bad period. Most of us blame others or external events for our misfortunes and in many instances, that is the case. Corporate lobbyist Niira Radia didn’t know that her phone calls were being tapped and even adding that numerological extra “I” to her name didn’t prevent it. The flip side is that wrong-doing, at least in the case of usually honourable people, can begin with an honest mistake that then snowballs out of control. It is possible to catch this snowball to face up to your mistakes, but that takes attention, courage, and a certain amount of wisdom. You could withdraw, publicly admit wrong-doing and change your actions. This, to me, is the most compelling idea in that ancient Sanskrit phrase, and indeed in all of astrology: predictive prevention. Change your behaviour and change future events. US presidential history is rife with examples of powerful men who were going through a bad phase and compounded it through their actions—Nixon’s Watergate cover-up; Clinton’s denials about Lewinsky; Reagan during the Iran-Contra affair. During bad times, your mind behaves perversely. These men could have changed history, and prevented their own downfall, had they caught themselves, as Obama did in the aftermath of his pastor Jeremiah Wright’s inflammatory rhetoric.
Although I have admired him from afar, I have encountered Gupta only twice. The first was eight years ago at the home of a friend who threw a book party for me, and had invited the entire “Westchester set”, as we called the CEOs and industry titans who lived in Westchester County, New York. Gupta was there, as was PepsiCo head Indra Nooyi with her husband and daughters, as was the wife of Berkshire Hathaway’s Jain. Dressed in relaxed Sunday slacks, Gupta was charming and gracious to me, a novice author.
The second time was two weeks ago, in Bangalore. I spotted him at the VIP enclave in the Chinnaswamy Stadium at the start of the England-India cricket match that ended in a tie. Gupta was with Parag Saxena, with whom he co-founded New Silk Route Partners, an Asia-focused growth capital fund. Gupta looked as dapper and distinguished as ever. If he was worried about what would transpire the following week, he didn’t show it.
The coming weeks will reveal exactly what the US Securities and Exchange Commission (SEC) knows about this case. In his letter to the ISB, Gupta has stated that there are no transcripts of his conversation with Rajaratnam and that relations between him and the hedge fund manager were “strained” because he had lost his entire $10 million (around Rs45 crore) investment in one of the hedge funds run by Galleon. Gupta will defend himself “vigorously”, and may come out innocent. But in the cut-throat world of global business, he has already been tainted by association and that will affect the rest of his life.
To me, the most haunting question is this: Was this whole thing preventable? If Gupta had caught himself acting out of character (the whole “perverse mind” syndrome that the verse describes), could he have stopped himself from making that phone call? Or does the lure of power and money change people in a fundamental way? Of the two, the latter is the scarier scenario.
For his sake and for India’s, Shoba Narayan hopes that Rajat Gupta is proven innocent. Write to her at [email protected]
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Manmohan Today 12:56 PM
The author starts the article with a phrase ” word on the street “. Is the autor competent enough to know the happenings on the street. Is she a beat correspondent on Dalal Street / Wall street ? What is her experience with respect to stock market reporting. What made her to masquerade as an expert Street reporter when she absolutely has no experience on business / stock market reporting. Such a blatantly partisan article should not have been published.
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Good_pwa Today 07:20 AM
Still a ‘novice author’, perhaps?! The article I thought was more about the writer attending the book/dinner party with the ‘Westchester Set’ in USA!! Such a pity..
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Hari Parmeshwar Today 12:24 AM
I think columnists must refrain from writing on things which they do not understand. Business is a specialized field and so its followers have perfected the art of being simultaneously crafty one moment and innocent at another moment. Somewhere in the higher echelons of board rooms and flights and five star hotels basics are abandoned. More skeletons will tumble from his cupboard if journalists do some proper investigation rather than holding a candle for him.
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Sokradhar Today 12:15 AM
Why would a person who has spent a lifetime and a stellar career keeping client confidences break off from a board meeting to make a call to a hedge fund manager?
Did he? All we know from SEC allegations is that he passed on the tips after conference calls…
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Robert Yesterday 05:57 PM
In the US we call this a slam dunk. The evidence against Gupta is overwhelming.Had there been no audio tapes the evidence could be circumstantial. Both The giver of information and receiver of information knew that he is violating his fidiuciary duty as a board member in divulging non public information.Had Rajratnam not acted immediately Gupta could have been given the benefit of doubt.A million dollars was realized overnight by this tip. i cant understand how anybody can view this differently. How Gupta benefited will eventually be found, swiss bank accounts, money deposited in somebody else’s name etc., a method used by his close friend Anil Kumar at Mc Kinsey.
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Surajb Yesterday 02:54 PM
What the…? Nixon etc. Could have changed their behaviour? Demented at best! Watergate vs. Insider trading? Are you kidding me? RG was getting money for his tips, and Raj was busy giving the industry and south asians a bad name. You need to know the depth of this charges- a chance encounter at some mixer doesn’t qualify you to expound nonsense on such a big issue. Just because someone smiled at you doesn’t mean he is a great guy. I can understand the motivation and the surprise… but puhleease!
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Surajb Yesterday 12:59 PM
What the…? This article is demented at best. Comparing Nixon’s Watergate with this insider trading scandal is idiotic. RG was taking money for the tips- that’s a little more involved than returning someone’s call or ‘socializing’. And Raj was busy giving south asians and the industry a bad name. Clearly the author lacks the understanding to appreciate the extent of these charges. Just because you met some corporate hot shot at some mixer a decade ago doesnt make you an authority on the subject!
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Chutia Rahi Yesterday 08:08 AM
How was the para on the Westchester set relevant except for showing off the author’s name dropping class? Wannabe!
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Rahul Yesterday 03:25 AM
y r u praying for him ,such a biased article from author ,shows the falling standards of indian media ,if a rich man makes a mistake his frnds write column defending him and praying for him ,
nd how is india’s pride related to rajat,its like indira is india or india is indira
such a juvenile piece of writing ,if a poor guy is caught ,he will be in jail froever his life ,this is real india where law is only for poor and rich ppl get bail since ED didnt file case properly
i hope USA punishes him if he is guiltly,USA law is not available for selling like in india,
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Jagan Yesterday 12:14 AM
India has nothing to loose even if Mr. Gupta is proved guilty. There are blacksheeps in every country. Perhaps Mr. Gupta’s personal credibility & the institutions that he is associated with will take a beating if he is proved guilty.
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Hmmm 03/11/2011 11:53 PM
The only lesson to learn from Gupta’s phone call is Everybody has a price, pay then and they will talk…..and talk like a canary.
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Dinesh 03/11/2011 11:53 PM
I don’t get why “oversocializing” is termed as the cause of Mr Gupta’s misdeeds.It is like covering a molestation attempt by calling it “overlusting “. Either you do right or wrong . Information has been leaked causing illegitimate benefit to Galleon.Whether it was leaked consciously or unconsciously ,doesn’t matter.
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Anadianant 03/11/2011 11:27 PM
I find commentary in the Indian press, even by “famous” names terribly dis-ingenuous or down-right under-informed. Is that by design or are we just socially engineered to accept slop as a seven course meal? My question is not rhetorical at all.
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Alaexin 03/11/2011 11:25 PM
No one going to read your story after a few sentence. Totally Boring
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Rajasekhar Reddy P. 03/11/2011 10:54 PM
Shoba, Kudoos to you! well wriiten article. Let God be with him and his family. I thank him and his team with bottom of my heart for services they provided in setting-up ISB in Hyderabad…Rajasekhar Reddy Pochampally
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ronin 03/11/2011 10:39 PM
let the law take its course – as of now it looks like deliberate insider trading – he may have made a career of keeping client confidences (of course he was paid handsomely for it) – but perhaps the fees for being an independent director were not adequate reward in his mind and helping galleon to recover the $10 million that he personally lost was uppermost in his mind – vinaaha kaala vipreeta buddhi indeed – we cannot know a man’s integrity from his rise – but we can gain an insight from his fall – let it be a lesson to all the rising stars – its never to late to lose your way on the slippery slope of less than ethical behaviour…
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Sgoel31 03/11/2011 09:25 PM
I don’t think this is a case of honest mistake. It is a case of guilty finally being trapped.
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Cobra 03/11/2011 06:25 PM
Let people be judged by their power their individual character. That should have nothing to do stereotyping the rest – positively/negatively.
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AK 03/11/2011 01:43 PM
“For his sake and for India’s, Shoba Narayan hopes that Rajat Gupta is proven innocent”
Simply ludicrous ! How on earth are India’s fortunes tied to those of Rajat Gupta’s is beyond me. India is much larger that one individual that too who’s professional career has been based mostly in the US. This is the first and only reference I’m seeing to India in this entire episode. I understand that the author knows Gupta but such a ridiculously hyperbolic statement serves no purpose.
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Exceller 03/11/2011 12:35 PM
Good Article. However the way the Rajaratnam’s case is unforlding, the news does not look good for Rajat Gupta. None of the US corporations will touch him for any board positions any more. Unfortunately for Rajat, the case is in NY city and not in Hyderabad ;-).Sooner or later I expect people will start withdrawing money from his Hedge fund firm “New Silk Route”. I predicts, this hedeg fund too will fold in a couple of years.
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