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Fall of an icon

There are quite a few MPs in the British Parliament, in both the House of Lords and the House of Commons, Lord Meghnad Desai and Lord Swaraj Paul, coming to mind. However, this column is not about politicians; it is about the economic success of Indians abroad.

Indians have been going abroad in large numbers, to better their prospects, since around the mid-19^th century. They went to eastern and southern Africa to build railroads and as small shopkeepers; to the West Indies, Mauritius and Fiji as indentured labourers (only one notch above slaves) in the sugarcane fields. And, of course, more recently, to the Gulf, the USA, Canada and South-East Asia.

Through sheer dint of hard work and enterprise, they prospered. Their saga of triumph, often against great odds and racial discrimination, has not been adequately recorded and appreciated. Overseas ethnic Indians now total around 13 to 15 million, second in number to only the ethnic Chinese living outside China. In the USA, Indians have done so well that they occupy the top economic ethnic group, with the highest per capita income.

But there was one coveted area which somehow eluded them: Top spots in American and multi-national corporations. These were usually reserved for white Anglo-Saxons or Europeans. That is, until a man named Rajat Gupta came along.

Orphaned at a young age — his father, a journalist, was imprisoned by the British for taking part in the struggle for independence — he went to Delhi’s elite Modern School, then to the prestigious Indian Institute of Technology in the same city, before making it to the renowned Harvard Business School in the USA.

After joining McKinsey, one of the leading management consulting firms in the world, he eventually became its head, the first non-American to hold that position in 21 years. Gupta had truly arrived. A place on the board of consumer goods giant, Procter and Gamble, American Airlines and Goldman Sachs, Wall Street’s most powerful investment bank, followed. Apart from being a multi-millionaire, he hobnobbed with the likes of Bill Gates, Bill Clinton, Kofi Annan and India’s Rahul Bajaj and Adi Godrej (they would all later testify in his favour). The only Indians in the corporate world whom I can think of who were perhaps on a par with him were Indra Noyii, the head of Pepsico, and also Vikram Pandit, the erstwhile chairman of the Citi group who resigned recently under circumstances that are still unclear.

So, what went wrong? Why did Gupta commit an indiscretion that led to his trial and a verdict of “guilty” for “insider trading” and a sentence of two years in prison — which could easily have been more — and a fine of $5 million? Was it simply greed, even though the evidence showed that he made no money from the insider trading that he was tried for? The person who made the money was Raj Rajaratnam, a Sri Lankan-born hedge fund owner who used the information passed on by Gupta to make almost $1 million from trading in Goldman Sachs shares.

So, if it was not simply greed, what was it? Probably a combination of hubris and a misconceived perception that he had become too big a man to be touched by what he probably imagined to be a minor indiscretion. What he did not realise was that the American regulatory authorities were out for blood. And the American public was fed up some fat cats on Wall Street making billions, while the country was in recession and the poor, even some of the middle class, were finding it difficult to make ends meet. Hence, Rajaratnam got a 10-year sentence, while Gupta was lucky to get a much lesser prison term.

But his career and reputation is in tatters. He is unemployable. He needs to devote the rest of his life in doing charitable, uplifting work, as a kind of redemption. Few tears will be shed for him. As the judge who sentenced him said, what he did was “disgusting”.

However, what concerns me more is the harm his conviction has done to the general image of Indians abroad, and in the USA in particular. From being considered bright, hard-working, high-achievers, they are now being seen by many as clever and hard-working certainly, but ready to break the law to get to the top and to make money. That image will take some time to rectify.

Rahul Singh is the former Editor of Reader’s Digest, Indian Express and Khaleej Times