In defense of Rajat Gupta

Yes of course I am prejudiced. Rajat and I are from the same school. I have known him for many years, and though I cannot say I was one of his closest, his profile being far too big for that, I still shared a warm relationship with him and his family.

The problem of being friends with Rajat was that you can not help but admire him. Admiration creates a thin wall between friends that never really allows you to be too intimate. You admire Rajat for his sheer breadth of vision and knowledge. But you also do so because every one else does. It did not matter that the person you spoke to was a Head of State, a CEO of a Forbes top 10 Company, an NGO that benefited from his tireless support, the name Rajat Gupta inspired awe and appreciation.  I have heard Rajat constantly described as a Rock Star by young management students who aspired to emulate him.

So why did Rajat Gupta not make deal with the US justice department, accept guilt and pay  a fine ? Yes , his reputation would have suffered.  But a man with his capability would have soon put the past behind him and create new paths that were equally productive to himself and society ? Yes, there would be no more high profile Board positions, but any number of Institutions and Corporations would still beg for Rajat’s talents.

Why then go down the path and sue the SEC itself and risk being prosecuted in court? Why risk a jail sentence ?

Because this was not just about Rajat Gupta. Not just about him and his family. Rajat actually believed in all that he stood for. He believed in the institutions he helped build. He believed in the system that allowed him to express his hard work and talent. Rajat went to court and risked everything to try and uphold all that he believed in, so the world would not lose faith in the very institutions he believed in.

And he lost.

He lost to an environment of hostility. To a world rightfully angry at banks and Wall Street, ready to bring down the so called  upper echelons of privilege. But also a world that failed to see the vast difference between the intent and modus operandi of Raj Rajaratnam of Galleon Hedge Fund and Rajat Gupta.

Rajat  believes he is not guilty. As do I and all his friends. But the courts found him guilty in face of ‘overwhelming evidence’ and we have to  accept that, circumstantial as that  evidence might be.  I hope he wins his appeal, and if in the outside chance that he does not,  his (unjustified) prison sentence is very short.

The world needs people with the talent, foresight and commitment like Rajat Gupta.

27 thoughts on “In defense of Rajat Gupta

  1. Nonsense. Don’t believe what you read in the media. Go through the evidence and the defense’s arguments for yourself.

    The whole case rests on only three phone calls.
    The rest is purely circumstantial and not dispositive.

    The three calls do not mention Gupta by name. They do not prove a tip was actually passed and they were not witnessed by anyone else.

    Only by Raj, the operator of a crooked hedge fund, known to be a liar and manipulator even by the government.

    The conspiracy was not even proved for the guy Raj was talking to, forget about for Gupta.
    The tapes showing that there were multiple other tippers at Goldman were kept from the jury.
    Meanwhile, the tapes of Raj would normally be considered hearsay and omitted.

    The government had five years to prepare and threw millions of documents, thousands of wiretaps (only three connected in any way to Gupta) and scores of witnesses at Gupta and then only sent the exact charges two months before trial.

    Judge Rakoff is a known grandstander. Bharara comes out of the Democrat party machine in NJ, where Jon Corzine was once governor. Corzine is ex chief of Goldman, very big, very corrupt.

    He is at the heart of the MF Global collapse. Corzine likely fixed the deal to save Goldman chief Blankfein. Read Greg Smith’s article of March 2012, blaming Blankfein and Cohn for what was going on.

    Please help me get the word out.

    If you are a friend of Rajat, I would appreciate your helping me post about this dreadful and biased verdict.

  2. Sir,
    I remember an iconic line made by Rajat Gupta sir – a couple of decades back – ‘I sat in the plane for the first time in my life and set out for Harvard’. He was the poster boy of the Indian corporate sphere and later became the flag-bearer for all the Indians there at the wall street.
    You should have seen the Newshour debate on him on the Times Now news channel. A lot of people(NRIs and PIOs) criticized him openly and called him a crook and said that it was because of people like him that the image of the Indians is getting maligned. It really was painful to see the lack of faith.
    As for me, a young technical undergraduate, I will be safe in speaking for all my friends that Rajat Gupta sir continues to inspire us ….

  3. Rajat Gupta has become victim of man made laws of secrecy & it ‘s supremacy over principles of freedom in widest & broadest form .

  4. Kudos to you for standing up for a friend in distress. In such situations, friends desert and run like rats. So hats off for that.
    But on another note, since there are so many poor people, innocent people who suffer from the justice system with no Shekar Kapur to write an article in their defence, I say I don’t care.
    And it is next to impossible for the good and honest to become as rich and as famous as Rajat Gupta. If it could have been possible, then you perhaps need to write a story on how such folks managed to keep their integrity.
    At some level I am happy. Although it will be painful for Rajat Gupta specially if he is in prison, that the experience will sensitize him and make him more caring (if he is indeed as caring people say).
    On the whole, everything is as it should be.

  5. Hi Sekhar Sir,

    Surely appreciate your open support for a convicted person. It says something about your genuineness. But am afraid it doesn’t say much, which matters, about the convicted person.

    Way back when the tapes were publicly available, i had heard them and was aghast that a person of his standing can do this. I bet even a 20 year old kid working in any American MNC would be expected to know that what Rajat did, is in-appropriate and if caught, would mire his career. You may ask why ? That’s because every MNC worth it’s salt conducts a annual (correct – every year) online training where it teaches/reinforces all its employees about what is acceptable and what is not in terms of standards of business conduct. In my experience of working with 3 MNC’s this a classic simple no-brainier case. Of course am not talking about legalese here, just what the company expects.

    Also, some of your point’s came as total surprise to me.
    – So why did Rajat Gupta not make deal with the US justice department, accept guilt and pay a fine ?
    MyTake – May be it was his arrogance, he thought, he can escape with help of high profile lawyers. May be it was greed of losing his reputation and money ?
    -Why then go down the path and sue the SEC itself and risk being prosecuted in court? Why risk a jail sentence ?
    MyQuestion – He sued SEC ? Or is he just defending himself against the state prosecution ?
    – Rajat believes he is not guilty
    MyTake – So do all criminals. What’s new in it ?
    -But the courts found him guilty in face of ‘overwhelming evidence’ and we have to accept that, circumstantial as that evidence might be.
    MyQuestion: Can you please explain what is ‘circumstantial evidence’ ? and why it should be looked down upon ? I find it a cliche that the Rajat favoring media has created.


  6. The ONLY person who said Gupta was greedy and craving to be in the billionaire’s circle (not that it proves anything even if he did want to be), was RAJ RAJARATNAM.
    This whole song and dance comes out of what Raj Rajaratnam said
    How do we know what kind of deal he cut with the Feds.

    Please read the actual briefs instead of reading the opinion of journalists who ALL COME OUT OF THE SAME BACKGROUND AND REPEAT THE SAME MEMES.
    Often these are put out by the government itself!
    Lord. Get a spine, people.

  7. “So why did Rajat Gupta not make deal with the US justice department, accept guilt and pay a fine ?”


    Rajat was MMS’s blue-eyed boy. Having PMO at his disposal, he probably didn’t believe that justice dept would pursue the case to its logical conclusion.

    How Manmohan used the PMO, Planning Commission, various ministries, and public funds to promote former Mckinsey boss Gupta’s Indian ventures
    How Manmohan turned Gupta’s private network into a powerful body influencing public health policy, with zero accountability to the public
    How Manmohan helped Gupta’s business and health education network to con the states into parting with hundreds of crore of public funds and parcels of free land
    How Manmohan helped create the ‘non-profit’ smokescreen that Gupta used to expand his illegal private equity business in education
    How Manmohan’s support contributed to Gupta’s clout, compromising regulatory oversight of his dubious dealings
    How Manmohan’s support blinded the government to national security implications of Gupta’s fast growing PE investments, particularly his links with Pakistan

  8. What Rajat Gupta did with Raj maybe common-place act in Dalal street, but the act of Insider trading is one of the most heinous crimes in the world of equity & fund management.

    If all of Rajat’s phone calls were tapped, then the real extent of his repertoire of white collar crimes would have been known. He also has dubious distinction of pointing to wall street, the extent of huge amount of Indian black money after the dot com bubble bust. Some of his acts are iterated nicely by @shamit above.

    We, Indians have become so habituated with bombardment of new scams & scandals everyday. we can’t even dream of a white collar criminal getting prosecuted. Its not fair to think, Rajat is getting prosecuted because he was Indian by birth; we he is not Indian anymore, he dumped the Indian passport long time back, his whole family has US nationality. May I also add that Bernie Maddof is also in prison for white-collar crimes and is not Indian.

    Sorry Shekhar, your classmate lost his way in whirl-winds of greed and should be punished like any other criminal.

  9. I am sure he must have been a good human being. He made a mistake (nothing wrong in that) we all make mistakes and we pay a price. The price he has to pay is in sync with his status in society (Big guy in the corporate world and the price he has to pay is sadly huge). The law of the land will take its course and if he is genuinely not at fault he will be free or else there is no escape.

    To all the Harichandras (Raja) out there rebuking him.. examine yourselves and repent. This is what I want to quote to you from the Bible:

    “Why do you look at the speck of sawdust in your brother’s eye and pay no attention to the plank in your own eye? How can you say to your brother, ‘Let me take the speck out of your eye,’ when all the time there is a plank in your own eye? You hypocrite, first take the plank out of your own eye, and then you will see clearly to remove the speck from your brother’s eye.

  10. Maybe so, but that is a matter of policy and it is an Indian internal matter.
    Why should the US courts be used to prosecute Gupta on flimsy grounds because there is a problem with opening up Indian economy?
    Is Goldman Sachs going to give back all its property in Chennai if Gupta is taken down? Will ISB close up shop in Hyderabad?

    If there is a national security issue in India that should be dealt with in India?
    Are all foreign countries that got a foot in India through Gupta going to pull up roots and go?

    I doubt it.
    It is a national sovereignty issue.
    If specific laws were broken in India, then he should be charged there and not here for unrelated things.

  11. Just to correct the record on Lila Rajiva’s post – It wasn’t just Raj Rajaratnam who spoke about Gupta wanting to be a millionaire. Bala Balachandran is reported to have said “He wanted a billionaire’s life and the question for him was how could he become a billionaire in a short time.” (

    And my sense is, if it is true that Rajat Gupta was an aspiring billionaire, while it doesn’t prove anything, it goes some distance in explaining what still to me seems an unanswerd question – why would Rajat Gupta do the things we know he did (whether they were breaking the law or not)?

  12. Well. Shouldn’t all the people giving opinion here by spending 5 minutes of their time, spend 1 hour to listen to the alleged tapes where our Mr. Gupta discussed how they plan to eat lehar chips in the board meeting, have ice cream after that and then go for joy ride to essel world etc etc…

    so here you go.

    Listen it and then comment.


  13. You are all confusing the issue. This is a federal criminal case to decide whether he committed INSIDER TRADING. The fact that someone now says he wanted to be a billionaire is beside the point. Probably everyone on Wall Street is trying to make more money. So is Bharara (he has also been talking about how much more money he wants to make). What does that prove?
    It is also the case that Indians are very quick to distance themselves of people they themselves built up.
    It don’t know Gupta from Adam, don’t care for his involvement in liberalization, would be happy for all the MNCs to go back to America and stop overloading the infrastructure there. I hate the glitzy culture they’ve brought to India. So politically, I don’t care for Gupta or McKinsey.
    Point is this another game.
    Insider trading is VERY MARGINAL to what happened on Wall Street. This case will not stop the serious fraud problems on Wall Street. What do you think Facebook IPO was? Massive pump and dump, really. Goldman was involved in that. Unfortunately, the worst stuff on wall street is LEGAL. It is the system itself that needs to be redesigned.
    Even among insider traders (if you think Gupta was guilty) this is MINOR STUFF.
    The take down is purely political. Please read DEEP CAPTURE and see how the set up operates. Why didn’t Bharara go after Steven Cohen…or Daniel Loeb?…or dozens and dozens of smaller fry?
    Why doesn’t he go after BlackRock, where public money is directly involved?
    I listened to all the tapes and you are confusing non-criminal chat with criminal insider trading.
    Something can violate McKinsey rules and that is their problem..not appropriate for a huge expensive federal show trial.
    Jury decided wrongly, race was definitely a factor, and he was a patsy.
    It doesn’t mean he behaved well. it just means the case was not proved beyond a reasonable doubt at all.
    This tape is what is called prejudicial hearsay – has no bearing on the issue, but can confuse lay people. Should have been barred form court.

  14. Judge Rakoff has covered up crimes on Wall Street.
    Read edwallstreet by Edward Manfredonia.

    He has used RICO on Galleon but in the much much worse Madoff ponzi, he refused to use RICO against the feeder funds and in fact has made it more difficult for Madoff victims to get money back through clawbacks from the funds.

    Bharara and Rakoff are said to be friends.
    Last year Blankfein had hired a criminal attorney. This year, Goldman says it’s not afraid of charges. Greg Smith who left Goldman says Blankfein and Cohn are the problem. Gupta is not mentioned.

  15. Byron Trott who put together the Buffett deal got to sell his Goldman stakes and start his own private equity firm. How is that different from what Gupta is supposed to have done? Goldman itself seems to have traded in advance of the deal. Isn’t that insider trading? Who tipped off its traders? Gary Cohn? He’s on the board. He would have known. Why hasn’t be been wire-tapped? Who else traded on Wall Street in advance of the public announcement? Have we checked out all the relationships of all the other board members?

  16. I agree with what you have written, and I do hope Rajat Gupta wins his appeal.
    Convicting a man on circumstantial evidence is questionable…….

  17. He know he’s got the strength to withstand all that’s happening to him. Otherwise I don’t see why he should have pleaded guilty on one count.

    I guess its the strength of truth….

  18. Sir, He may be your friend ; but he is giulty as hell!! he was a wall street insider; for you to say he is not guilty when there is overwhelming evidence; it is shameful

  19. I recollect the film ‘MRIGAYA’ Mithu Chakravarti’s first film, which was directed by Mrinal Sen. The British Collector deposing before a British judge confirmed that Mithun, the village lad (with great potential of becoming a revolutionary leader in future) had killed the landlord. The landlord was a sucker and deserved to be killed. But, the bigger ‘catch’ for the ‘Raj’ lay in terminating the rising village lad. Alas, Rajat’s career ‘required’ to be ‘terminated’.

  20. Kapoor saab, I think you are making a big mistake blaming it on the environment. Mr Gupta is too shrewd not to have understood the environment in which he was working. Unless you mean that the American system is not equal to the terribly corrupt Indian system.

  21. I believe that rajat gupta is innocent.I don’t know much about corporate affairs,in fact i’m just a 17 years old boy who didn’t even know about rajat gupta about 5 month ago.I came to know about Mr gupta when i was making a project on most successful indians in the world and after reading about him and gathering a lot of information about him i was really influenced by him.He is an idol to me and a lot of students like me.Maybe he made a mistake or maybe he didn’t but we should never neglect his contributions and examples he has set for so many people around the world.At the end i just pray that he is plead not guilty!!!
    i would also like to thank you Shekhar sir as you are one of the few who support him and giving us the opportunity to express our views.Although,one thing i didn’t understand is why did anil kumar back stabbed rajat gupta?

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  23. Mr. Rajat Gupta is silly. Why anyone would even think of getting involved in insider trading when they are already worth $80 Million is beyond me. It is well known that insider trading is illegal. Now after paying the $25 Million fine, he would still be worth $55 Million, which is still super-rich.

    Rajat, you need to attend spiritual discourses since money cannot buy you happiness. You are lucky the judge only sentenced you to two years in prison since with good behavior you can be out in one year. Why would a Harvard educated person like you provide inside boardroom information to an unethical person like Rajaratnam or to anyone else for that matter? Just be thankful you got a short sentence. Live and Learn!

    Rajat, my suggestion to you is to repent and do the prison time in good spirits. And when you get out, please go and teach in India without taking a salary. Next time any illegal ideas cross your brains, please remember that life is short and that you are richer than 99.9% of the people in the world.

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