A weak defence

Rajat Gupta is desperate to portray himself as a fall guy

It takes extraordinary chutzpah for a man to refer to himself as a “convicted felon” in the preface to his new book, and then proceed to devote large parts of the book to dismissing the conviction process as a “miscarriage of justice”. In a series of media interviews, Rajat Gupta, former global head of McKinsey and author of Mind Without Fear, has sought to give the impression that he is innocent of any securities fraud, despite having been convicted of illegally slipping hedge fund manager Raj Rajaratnam confidential information about Goldman Sachs. Proclaiming his innocence, Mr Gupta has portrayed himself as a fall guy of the US financial crisis whose travails distracted attention from the Wall Street figures who caused the meltdown and the prosecutors who failed to bring them to justice. Ruing his unpreparedness for the winner-takes-all realm of finance, he has also said that his only regret was that he was perhaps a “little too loose-lipped about corporate secrets”.

Mr Gupta might think his only crime was being a little “loose-lipped”, but the fact is that a federal jury in the US found him guilty of passing on tips about Berkshire Hathaway’s $5 billion investment in Goldman Sachs and the bank’s financial results after prosecutors countered with evidence that he brazenly divulged confidential board discussions at both Goldman and Procter & Gamble. Prosecutors built their case around phone records, trading logs, instant messages and e-mails. The jury took only two days to reach a verdict, as it found the circumstantial evidence against him too overwhelming to ignore. The fact also is just months before the book came out, a US appeals court declined to throw out his 2012 insider-trading conviction. This was the second time that his case had been rejected.

The jury is out on whether he was subject to too harsh a treatment during his two-year jail term (he was handcuffed for over two weeks) and many of his influential friends have strenuously pointed out that the loss of his reputation was punishment enough and there was no need for his imprisonment. But that is specious logic. His exemplary professional track record cannot condone the preferential treatment he gave to Mr Rajaratnam, flouting business ethics in a most flagrant manner. Mr Gupta has sought to blame it all on prosecutors, who are “political animals” and rivals who resented his global network that was in many ways far greater than theirs. But this is either being too naïve or an attempt to divert attention from his spectacular fall from grace from being a role model for Indians and Indian-Americans to a convicted felon. Mr Gupta obviously has reasons to feel hurt, as McKinsey, a firm he led for decades, stripped him of the use of the company’s email address, a privilege normally afforded to former managing directors. But in his bid to build a new innings at age 70, he is perhaps playing on a wrong pitch. The US Judge who sentenced him to prison had said, “He is a good man. However, the history of this country and the history of the world is full of examples of good men who did bad things.” However much he tries, Mr Gupta would find it difficult to wish away the “bad things” he did.