The literal and financial nuclear news from India

First was the indictment of Rajat Gupta, which is not that much of a surprise given the widely reported links between him and the hedge fund heavyweight, Raj Rajaratnam, who as been sentenced to eleven years in prison for insider trading. After all, Gupta was no ordinary executive from India:

Few Indian executives have achieved the stature that Rajat Gupta held in global business, a position that made him an icon for many in India seeking to rise in the U.S. and elsewhere.
So Mr. Gupta's indictment Wednesday was greeted with a mix of surprise, sadness and even some anger in India's tightly knit business community. It also prompted some concern that his arrest might reflect poorly on Indian executives in general, though Mr. Gupta, the former chief executive of consulting firm McKinsey & Co., has lived for many decades in the U.S.

At the same time, apparently the Indian Government is also looking into a few of his dealings in India:

will probe the possibility of Gupta having contravened the Prevention of Money Laundering Act, involving, inter alia, his purchase of shares in Tamilnad Mercantile Bank (TMB).
The newspaper quotes unnamed ED officials as saying: “We suspect that control of shares in Tamilnad Mercantile Bank was in violation (of regulations) and had no approval from the Reserve Bank of India (RBI). Besides, some of his other financial transactions are also under the scanner.”

On a slow news day, I might have been captivated with those stories.

But, Condoleezza Rice upped the ante:

India had deployed nuclear-capable missiles on its western border and refused to budge under US pressure to hold any talks with Pakistan after the 2001 attack on its Parliament by terrorists from across the border, says former top American diplomat Condoleezza Rice.

It has always been suspected that India and Pakistan were on the verge of a war, and a nuclear war at that, soon after that horrific attack on the Parliament building.  But, to get details of that from an insider who was closely monitoring the developments, well, it is awfully shocking how terrible those few days were.

It is also fascinating to read about the kinds of strategies the US and other countries employed in their attempts to calm the Indians:

As there was no let-up in the tension between the two neighbours, Rice said the US and Britain joined hands and organised a series of high-profile visits to the two countries with the view that there would be no war as long as some important dignitary was in the region.
"Colin (Powell, the then Secretary of State) and Jack Straw, the British Foreign Minister, organised a brilliant diplomatic campaign that could be summed up as dispatching as many foreign visitors to Pakistan and India as possible.
"We reasoned that the two wouldn't go to war with high-ranking foreigners in the region. Every time they accepted a visit, we breathed a sigh of relief. We needed to buy time," Rice writes, recollecting the events of those days.
But the situation continued to deteriorate, she said, adding that by December 23 there were reports of troop movements as well as a disturbing one that India was preparing to move short-range ballistic missiles capable of carrying nuclear warheads to the Indian-Pakistani border.
"We reviewed the list of dignitaries who had been deployed to the region, searching for possible intermediaries through whom we could send messages to the adversaries, and agreed to reconvene the next day," Rice said.
Given the volatility of the situation in South Asia, Rice said she cancelled her Christmas vacation at her aunt's house in Norfolk Virginia and rushed to Washington the next day.
"By December 27 the reports were confirmed: India had, indeed moved nuclear-capable missiles to the border. Colin called Jaswant Singh, the Indian Minister of External Affairs, and asked that the two countries sit down and talk. The suggestion was flatly rejected," Rice writes.

Talk about dodging a bullet; phew!

Meanwhile, a few countries, including the US, have issued cautionary statements about travel to India, because of terrorism concerns.  The Indian government is not happy about this, naturally:

The Government has decided to protest after five countries - The US, UK, Canada, Australia and New Zealand - have issued advisories against travel to India during the festive season for security reasons.
The Government has protested saying such advisories are done to defame India. Minister of State for Tourism Subodh Kant Sahay said the matter will be taken up with appropriate authorities.

And students wonder why I tell them that the AfPakIndia region is way more dangerous than the Israel/Palestine issue!

Drop the gun. Take the, er, jilebi? Rajaratnam drops both!

So, Raj Rajaratnam, a Tamil-speaking immigrant from Sri Lanka, now faces up to 11 years in prison.

The multi-million dollar insider trading scam that Rajaratnam engineered is yet another, and latest, evidence that Indians and South Asians have truly integrated into most aspects of the American mainstream!

With a personal wealth that was once estimated at nearly $2 billion before his arrest and conviction, Rajaratnam was one of the richest people on the planet, and was a success story from the island of Sri Lanka to the island of Manhattan.  However, like the movie character Gordon Gekko who uttered that immortal cinematic line “greed is good,” Rajaratnam too engaged in insider trading to transform his hedge fund, Galleon Group, into one of the best performers. 

He managed to successfully lure many others who had access to valuable inside information, but whose depositions in court sealed the fate of this once high-flying Wall Street tycoon.  A high profile figure in this illustrious rap sheet of co-conspirators was Rajat Gupta, the former chief executive of the global management consulting firm, McKinsey.  Gupta, who was born in India, was one among many other Indian-Americans in the Rajaratnam case—the “Indian mafia,” as they were apparently fondly referred to in their wildly successful days before they fell victims to greed of the illegal kind.

In yet another interesting twist to this immigrant story, the lead prosecutor in the case is of Indian origins as well.  The US Attorney in-charge of the prosecution, Preet Bharara, grew up in the US after his parents emigrated from the northern Indian state of Punjab—diagonally and far away from Rajaratnam’s Sri Lanka.  Bharara, represents the Indian-American stories that draw the envy of many, with an undergraduate at Harvard, followed by law degree from Columbia and a successful professional life since.

Thus, it was an all South Asian immigrant affair in the Manhattan courtroom.  Talk about “all in the family!”

Such white collar crime, is, however, not anything new in our old countries in South Asia.   Corporate and political crimes are everyday events there, and often these two twines intersect too.  

The latest of the large-scale scandals to rock India, for instance, resulted in huge giveaways to the country’s telecommunication businesses at an estimated cost of more than $40 billion of lost revenue to the Indian government.  Forty billion dollars might seem like small change to us here against the background of trillions of dollars of debt over which Washington is now deadlocked.  In India, which is by no means a rich country, $40 billion is only a hair more than its annual defense expenditure!

Old habits die hard, particularly here in the US where immigrant groups engaging in crime is a story that has been re-enacted many times over by those chasing a shorter path to the American Dream.   Rajaratnam and his “Indian Mafia” are the latest installment and certainly will not be the last.  In this particular case, we can then maybe adapt the famous line from The Godfather, to "drop the gun, take the jilebi."

In a way, Rajaratnam’s shady and illegal wheeling and dealing has helped convey to the rest of America that as much as we have spellers and scientists amongst us, Indian-Americans are also regular people who run convenience stores or occasionally indulge in crime.

To paraphrase, a tad, Shakespeare’s Shylock--who too was overcome by greed--we bleed when pricked, laugh when tickled, and get jailed when caught!  Oh well!  I suppose Rajaratnam will now have all the time to catch up on Shakespearean and contemporary literature!

Proof that South Asians have made it in the US? Wall Street indictments!

Raj Raratnam, a Sri Lankan-born hedge fund tycoon, is found guilty of securities fraud, and faces up to almost twenty years in prison.  The only real question that the jury had was whether Raj was smart or stupid.

Stupid?

"He was very stupid. That was the sad part. He traded for less money than he already had. If you’re going to steal, steal big."

Or smart?

He was a “chameleon” who “could adapt to whatever personality to get whatever he wanted..."

"He knew how to pick his victims. He knew who was weak and who was crooked. It’s better to have weak and crooked people feeding you information."

But the jurors went meticulously though every detail to make sure they didn't send an innocent man to prison.

Tied to this Sri Lankan are a bunch of other characters as well, many with roots in the Subcontinent.  Including Rajat Gupta, who headed McKinsey to newer heights, before being termed out:

According to the SEC, it was on the evening of June 10, 2008, that Gupta, in "a flurry" of phone conversations with Raj Rajaratnam, the founder of the Galleon Group of hedge funds, allegedly divulged Goldman Sachs's still secret second-quarter earnings.
In early March, the SEC stunned global business circles when it filed a civil administrative proceeding against Gupta, accusing him of leaking information from confidential boardroom discussions held by Goldman and Procter & Gamble to Rajaratnam—accusations Gary P. Naftalis, Gupta's attorney, calls "baseless." Gupta has not been criminally charged, but for seven weeks this spring, during Rajaratnam's sensational insider-trading trial, hardly a day passed when Gupta's name was not mentioned. Although federal prosecutors called him an unindicted "co-conspirator," he never appeared at the trial. But jurors heard his voice, caught on an FBI wiretap, resonating through the courtroom, saw his face in a photograph beamed onto a large video screen, and listened as his professional and personal lives were dissected by federal witnesses. While Rajaratnam is alleged by the SEC to have made more than $17 million from Gupta's information, what Gupta himself might have earned is less clear.
Gupta has been removed from the prominent corporate and philanthropic boards on which he once served and is shunned by business leaders who were once his friends. His spectacular fall from grace has left the world's leading companies shocked and mystified. Rajaratnam's conviction on 14 counts of fraud and conspiracy on May 11 closes a central chapter in the story

There is more to this "illustrious" list mentioned in the same story, likeVictor Menezes: former Citigroup vice-chairman, and Anil Kumar: of McKinsey and Mindspirit, and Parag Saxena.

Why would Rajat Gupta go down this path?

his quest to amass great wealth led him to lapses in judgment, says Bala Balachandran, dean of the Great Lakes Institute of Management in Chennai, India, and a friend for almost three decades.
“He wanted a billionaire’s life and the question for him was how could he become a billionaire in a short time,” Balachandran says.  ...
Gupta’s former Harvard dorm mate Carberry says he’s dumbfounded as to what went wrong with his friend.
“If the SEC charges are true, something happened to Rajat,” he says. “The Rajat I knew at business school was of the highest integrity. The Rajat I’ve heard on wiretapped conversations isn’t the person I knew.”

We have made it, baby!!!  Next stop: the White House, because we now know how to say "I am not a crook."