In a 2-part series, the author has - very convincingly to me - ripped apart the Rajat Gupta case, and proven how he was victimised. The Author is the Vice-Chairman and Managing Director of First Global. The Author makes a simple point and proves it: Rajat Gupta was an outsider. After reading it, and recalling Rajat Gupta behaviour throughout the case, (he submitted himself to the authorities, trusting the US Justice System which started the entire affair, his overall approach etc) I am convinced... excerpts are given below...
"Of the many things I don’t like about this Rajat Gupta affair, one is the Indian media’s sickeningly fawning portrayal of the American justice system as one that “doesn’t spare the rich and powerful, unlike ours where the well-connected get away”, and “how justice is dispensed speedily in the US”, and so on.
Nothing could be farther from the truth. The US protects its own rich and powerful better than we can ever do. Paulson got away clean. Not even an investigation. No investigation by the Securities and Exchange Commission into the trading by these attendee hedge funds. Nothing. Just a conspiracy of silence.
Then, we have the strange case of David Sokol. He was Buffett’s No. 2, and was widely tipped to take over from the old man. Sokol bought shares of Lubrizol, prior to getting Buffett to buy the company outright. After the deal was done, Sokol told Buffett of this purchase. Buffett waved it aside, saying it was no problem. No problem? Sokol traded on inside knowledge of material, non-public information, and Buffett joined him in keeping this a secret.
When the problem came out, Sokol resigned, Buffett shrugged. And, that was it. The cover up had happened. Because any serious investigation would have led to Buffett himself becoming a party to any offence, since he chose not to report this to the authorities. Consideration for his old age? Well..."
"The American International Group (AIG) case was even more egregious. It was proven after investigation that AIG had manipulated its accounts for something like 20 years. Hank Greenberg, another American idol, presided over AIG during this entire period. So, what happened to him? Was he arrested for accounting fraud? Or, convicted? Not a chance. Criminal charges were dropped. He settled with SEC, and merely stepped down. That was it."
"And, closer to present day, it never fails to amaze me how in the entire sub-prime scam (a true scam, if ever there was one), not even a single senior executive in any Wall Street bank has been held culpable, arrested, or convicted. Even civil proceedings have been non-existent. The white-shoe investment banks have got away once again (while flimsy cases against Mike Milken brought down the upstart Drexel Burnham Lambert). All cases against the Goldman Sachs, Morgan Stanley, Merrill Lynch cabal are always conveniently “settled”. None of credit rating agencies have been prosecuted for gross negligence or outright lies, but one Deven Sharma had to resign as chief of Standard & Poor’s because he dared question Uncle Sam’s pristine rating."
"As it should be clear by now, America exemplifies crony capitalism, and protects its own. And, contrary to what Indians would like to believe, Rajat Gupta was hardly part of the “rich and powerful” set. In fact, he was really a nobody in the American context. Just another former CEO of a consulting firm. That’s hardly a ticket to stardom. He was an Indian idol, not an American one. In fact, that was precisely Gupta’s problem: that he didn’t belong to the echelons of the high and the mighty and desperately wanted to belong to that club (this is revealed in Raj Rajaratnam’s transcripts), for which he was currying favours for Rajaratnam, much like the young Bud Fox supplying the Blue Star Airlines tip to Gordon Gekko in Wall Street"
"Another interesting and unnoticed fact about the Gupta trial was that the judge prevented the defence from presenting voluminous evidence to prove his innocence, saying, “Keep this short… the jury doesn’t have that much time to go into all this pile of evidence.” Such a thing would be unthinkable in Indian courts, where even if a judge is biased against the defendant, he will give him any amount of time to mount a credible, comprehensive defence."
It is not my position that Rajat Gupta was innocent; I simply have no idea. I do not possess enough knowledge to present an opinion as to that. But this entire case has always bothered me from the start, including the almost vindictive targetiug of Rajat Gupta, the indecent haste and the media trial. Something did not gel, but I could not place precisely what. Experience has shown me that in such cases, the truth is almost always with the victim. The man's behaviour was quite simply astounding, and clicked with me. Something did not seem right. He may have been guilty for all I know, but it seems quite certain now that there is plenty more dirt hidden underneath all this. Was Rajat Gupta railroaded? The articles in question certainly seem to indicate that. Especially if you consider that the people who caused the greatest crash in modern economic history got away scot free. In that light, it seems fishy, to say the least. At best, an effort to show the world "we are doing something", and at worst, an attempt to stem the rising influence of outsiders and especially Asians / Indians in the American context. Time will tell... but this case is a warning to all Indians to my mind. This is the second case (perhaps third) in the recent past where Indians have been very effectively sidelined.... am I being too fanciful? Seeing shadows under my bed?
Pataa nahi. I dont know. Par samay sab kuchh bataayegaa. Time will tell.. it always does. Kudos to Business Standard for this article! Well done, BS!
Could you post links to the BS article, for those who have not read it?
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