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Fall From Grace Of An Indian Icon

Fall From Grace Of An Indian Icon

November 04, 2011

Indian Corporate Poster Boys fail the litmus test.

The saying goes that ‘corruption of the best makes the worst.’

Rajat Gupta, the former chief of McKinsey & Co, was recently in the news for being arrested by the FBI on charges of securities fraud and insider trading through which he tried to make his friend, hedge fund owner Raj Rajaratnam successful by leaking top corporate secrets and details of boardroom discussions.

This Wall Street icon of Indian origin ran the reputed McKinsey Consulting group from 1994 to 2003. Educated at IIT Delhi and Harvard Business School, former Director, Goldman Sachs, he was a poster boy for the Indian middle class. Born in Kolkata in 1948 to a teacher mother, Gupta’s father a journalist died when he was 16 years old. Two years later his mother too died leaving him and his 3 siblings to fend for themselves.

After finishing his engineering from IIT Delhi, he went to Harvard Business School for his MBA. At 45, he was made the chief of McKinsey, the first non-US-born executive to run it, considered then the most influential consulting firm. Clearly there was no holding him back. At the same time he seemed never to lose his focus on India, trying to give back to his homeland in diverse ways. “Try to make other people successful. If you work on making other people successful, they will in turn make you successful beyond your dreams.” This was the advice that Gupta gave to students at the Indian School of Business, Hyderabad, the B-school that he helped start. Figures such as Gupta, have become stories of achieving success the old-fashioned way, through sheer grit and determination, through relentless hard work.

However, if found guilty of charges of insider trading, this prominent global Indian could face 20 years or more in federal prison. Detractors argue that much of the evidence against him is circumstantial, that wire-tapping as a means of gathering evidence is justifiable only in the absence of other reasonable means, etc. But public opinion is fast to form around an issue. The common man on the street feels vindicated if wrongdoings by the big-wigs are brought within the purview of justice. It takes years to build a reputation that a few moments’ frailties, a crucial error of judgement, the smallest slip can undo.

On January 7, 2009, the world woke up to shocked silence when Ramalinga Raju founder of Satyam Computers admitted to committing fraud and cheating six million shareholders. He admitted to a botched acquisition attempt involving Maytas in December 2008 that led to a plunge in the share price of Satyam. In his letter of resignation from the Satyam board Raju indicated that the dupery was of such mammoth proportions that “It was like riding a tiger, not knowing how to get off without being eaten." Here was another corporate leader who would be remembered in Indian business history—not the way he would have wanted, as a successful software entrepreneur, but as the perpetrator of the country’s biggest corporate fraud. A person of humble origins, Raju went into the software services business after returning from the US with a coveted MBA degree from the Ohio University with big dreams. His vision slowly took shape and Satyam Computers became a household name in the ITES sector. No one who had followed his rise in career could have imagined an end like the one Raju went on to have.

Why then do success stories such as those of Rajat Gupta or Ramalinga Raju do a volte face and turn into murky tales of corporate greed and scandalous conduct? What is it in the human mind that suddenly blurs the sense of right and wrong? Is it what the ancient Greeks called “hubris” [by definition, a loss of contact with reality and an overestimation of one's own competence or capabilities, especially when the person exhibiting it is in a position of power]? In classical literatures of almost all cultures, and especially of Western culture, the notion of a tragic hero has in it the seeds or germs of corruption even when its essence is made up of exalted qualities such as a penchant for excellence, the vision of things greater than what is allowed by one’s immediate reality, the zeal to push the envelope, so to speak. Such an individual inspires us, holds our attention in awe. Then when he falls from grace we experience a vicarious fear laced with thrill and finally a cathartic relief that the ill fate has befallen that individual whom we were putting on a pedestal a while ago and that we have been spared of its ramifications.

On a much simpler level, in more worldly and less metaphysical terms, Subroto Bagchi, co-founder of MindTree Corp., writes in his blog: “I reached out to a world-wide group of people I deeply admire for their professionalism while writing The Professional. I had asked them these three questions: what qualities did they admire in a “professional”? What were some of their own uplifting experiences in dealing with other professionals? Three, what were their recollections of unprofessional conduct? These men and women, from a diverse set of fields, indicated a list of qualities…”  He then goes on to collate a list, which interestingly is topped by “integrity”, the one quality that is most prominent amongst all leaders and all professionals. Integrity is a pre-requisite for any professional.

There is no scope for any debate there. Intelligence without integrity is like a body without a soul. However, to pass judgement on an erring individual from the comforts of one’s couch is perhaps a fallacy. All of us watch news-clips on television but perhaps these are also occasions that warrant us to look into the deep abyss of our own souls. What we see on television are facts. But facts cannot and should not be confused with truth. The truth is shrouded in mystery. Visible, tangible facts are that the Rajus and Guptas have failed at the altar of integrity. The truth to uncover is whether we as individuals would have passed the same test of temptation…

Black, white or shades of grey-that is the question. 

10 Comments

  • Susmita Sen
    By
    Susmita Sen
    13.11.11 06:42 PM
    Hi guys,

    I am glad that this post has provoked a discussion, and that too in the right direction, on the connection between reputation and integrity, etc.

    Harry,
    I am touched to see that you are moved enough to take ownership for the post. I thought I was the author :)

    Susmita
  • HARRY
    By
    HARRY
    11.11.11 04:49 AM
    Kirklops, Yes I agree, they are in away linked, but like I said they are still two different entity. This is bit like a husband and his wife, they are a family, which is one unit, but still two individuals. It also can be said that, if they were same then you don't need two separate word to describe same thing. Apple is not orange if you understand what I am saying. This is the only description I can give you and no more. That's why I have written the post this way and I don't do sugar coated.

    HARRY
  • Kirklops
    By
    Kirklops
    11.11.11 02:39 AM
    Harry, I agree with you. Reputation arrives from trust between two parties while integrity is a personal matter. Yet, without integrity or at least an ability to project integrity to the outside world, trust cannot be gained.
  • HARRY
    By
    HARRY
    11.11.11 01:59 AM
    Dear kirklops
    Reputation and integrity are two diffrent matters/traits. Reputaion can be good or bad, but integrity is either you got it or not. Integrity is expected of you when you are in certain proffesions . Reputation arrives from trust, when the relationship is formed between two parties but integrity does not need the foundatin of relationship. This is the only way I can describe it to you with out involving the dictionary. When the trust goes, so does the reputation. Therefore reputation has relationship with trust but not integrity.

    HARRY
  • Kirklops
    By
    Kirklops
    10.11.11 09:44 PM
    Harry, that means integrity or at least the projection of it means something in the western world.
  • HARRY
    By
    HARRY
    10.11.11 08:36 PM
    DEAR KIRLOPS

    Wester understanding is simple, they think you have got away with it regardless of the outcome guilty or not. Once your reputation goes you are history.
  • Kirklops
    By
    Kirklops
    10.11.11 08:53 AM
    Would the armchair critics have passed the same test of temptation? Hard to say. Maybe not. But that does not absolve someone who has compromised his integrity.

    Harry, didn't understand one thing. If integrity means nothing in the western world, how would a 'not guilty' verdict result in a destruction of his character and career?
  • HARRY
    By
    HARRY
    07.11.11 12:00 AM
    Next I am going to hear that all the politicians are clean and honest in USA. Only a yank would say things like this. Where he thinks all the politician are whiter then white cloulds. The only time they go to jail is by upsetting tooth fairy.

    Next I am also going to be told that the war in Iraq was to free Iraqi peolple by USA . !!!!!!!!!!!!!!!!.
  • Vijay Varma
    By
    Vijay Varma
    06.11.11 10:15 PM
    Stop being a victim. Grow and act like a man. US is the only country where the powerful go to jail and are labeld a fellon for life and deprived of voting rights unlike India where 40% of parliamentarians have serious case against them and they are still in the parliament even after being convicted eg Shahbudin and others.
  • HARRY
    By
    HARRY
    04.11.11 05:47 PM
    Dear SUSMITA
    I like the article, but one thing I will say is, every man is born with fault's, no matter how great his potion is in the society from president to ordinary man. Corporate crime is more complex then crime against individual.

    Corporate law is invented daily in USA and UK to suite their need by the government in west. I wouldn't even call this as crime. In USA and UK if you cross the authority, then they will invent something to throw you in jail.

    Corporate crime is like getting parking ticket, it's legal but not moral . As you said in the article it's body without soul.

    I don't know weather you know or not there are more law books on corporate law in west then religious books in entire world put together. This is fact. When ever there is a successful organisation / company in west and if they don't have connection in the government or with political party,then they will be cut down to size by the current government and their PC thinkers. This is also true .

    If you have right and powerful friends then you will get away with murder in west . President NIXON is prime example of this in USA .

    Integrity means nothing in western world . It's only a word to label and describe individual when it suits them, it is as important as virginity to a prostitute.

    Rajat Gupta guilty or not one thing is certain, the destruction of his character and career. HARRY

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