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Saturday, Nov 16, 2019

The sooner, the better

The Rajat Gupta case should show India how to bring white-collar offenders to book.

india Updated: Oct 25, 2012 21:44 IST

Hindustan Times

Rajat Gupta, the former boss of consulting firm McKinsey & Co sentenced to a two-year prison term for passing insider information from the Goldman Sachs and Proctor & Gamble boardrooms to a hedge fund manager, draws a lot of sympathy for his philanthropy and from the fact that he was the poster boy of the Indian diaspora. Neither should take away from the severity of his crime or the speedy US justice delivery mechanism that has handed out the punishment. It is less than a year since Mr Gupta was indicted for tipping Raj Rajaratnam — founder of the Galleon Group hedge fund who was convicted in May 2011 — and the verdict has been delivered. Mr Gupta’s prosecutors sought his conviction for crimes committed between 2007 and 2009. The US judicial system has thus wrapped up the investigation and prosecution within three years.

Contrast this with the way India metes out justice to its white-collar criminals. Satyam’s B Ramalinga Raju confessed to his crime in 2009 and his trial is still on. Big Bull Harshad Mehta was tried for nine years and he died in prison of a heart attack soon after the conviction. A former UTI official died undergoing trial in the US-64 scam. Last November, 86-year-old Sukh Ram was sentenced by a court to five years in prison for accepting a bribe of Rs. 3 lakh as telecommunications minister in 1996. Delays in investigation and prosecution bring criminals to book much after their crimes have faded from public memory. This reduces the deterrence value of the punishment. Besides delayed justice, its administration is leaky. The Securities and Exchange Board of India has alleged that stockbroker Ketan Parekh is active on the bourses through clients despite being debarred from trading for allegedly manipulating the market. Small investors duped by CR Bhansali in 1997 are beginning to get back what’s left of their money now.

The message from the US courtroom is here is Mr Gupta, a man who may have done a lot of good for society — advising premier American institutions like Harvard University and the Kellogg School of Management, and working with the Bill & Melinda Gates Foundation to fight Aids, tuberculosis and malaria across the world — but he slipped once, and has to pay for it in time. Swirling corruption charges in India over the last two years, like the one over the grant of telecom licences by former minister A Raja, would have settled down far before the verdicts in these cases.