OPINION: The Rise and Fall of Rajat Gupta

Rajat Gupta's  journey in to a  federal prison ,  in  a case involving the  criminal insider trading   has a ended  with a two years sentence and a fine of 5 Million dollars, at the age of 63. Coming from a middle class family of Kolkatta, he moved to Delhi, after his parents passed away.  He was a teenager at that time.

Inspite of all handicaps, he did superbly   academically. He studied engineering at the Indian Institute of Technology in New Delhi, where he was a "a big man on campus, bright, talented, popular," and head of the college Union. He met his wife,  while taking part in a one Act play, in 1968. He wrote his application with his resume for  applying  to Harvard Business School in the college coffee shop. He came to the U.S. in 1971. To support himself, in Harvard, he worked  as a newspaper  delivery boy also. It may look a menial job in India, but in USA it is normal for students to earn doing odd jobs.

Two years later,  he joined  McKinsey & Co in New York. It is  one of the a top consultancy for America's most powerful corporations. By the dint of hard  at the age of 45, in 1994, he  the first Indian-born chief of a U.S. international corporation. He  served until 2003. His success inspired many Indians, who have or are heading, many multi National Organisations.

Rajat Gupta is neither the first and not the last to be convicted  for passing on insider’s information  either for love or money or just as a bravado. There other  Recent Insider Trading Sentences cases in USA are as under;

·         Raj Rajaratnam:Trader Got a  Record Sentence

·         Zvi Goffer:Ex-Trader Sentenced to 10 Years

·         Emanuel Goffer:Former Trader Is Sentenced to 3 Years in Prison

·         Donald Longueuil:Ex-SAC Manager Sentenced in Expert-Network Probe

·         Michael Kimelman:Ex-Trader Kimelman Sentenced in Insider Case

·         Danielle Chiesi:Tipster Gets 30 Months

It is worth while as to what would happen to a case of insider trading in India The market Watchdog Securities and Exchange Board of India (SEBI) has requested  the government to set up special courts to fast-track the process of bringing the guilty to book. Asked about the cases like the one against Rajat Gupta in the US where the Indian has been sentenced to jail term, the Former SEBI Chief  said  that legal provisions in India and the US are entirely different. He did not say clearly that they are as good as non existent or useless or unenforceable. He added that

“In the US system, the investigators have got more powers and secondly it can lead to prosecution and actual criminal punishment. In our system, the emphasis is more on penalty (Monetary)  and now the penalty is much higher in cases like insider trading than what it used to be earlier.  The watch dog added that  that there is a provision for prosecution as well in India, in addition to penalties.

“But our prosecution is not succeeding to that level. I admit that. In some cases, where we have tried prosecution, we have found that the prosecution has been going on for years and years together.

“Primarily, that is because we do not have earmarked judges. If we want our prosecutions to succeed, we need earmarked judges. We need special courts. If that happens, there will be a marked improvement on this front’ The SEBI has already sent the proposals to the Government accordingly.

It is apt to reproduce here what the Supreme Court said, in August,  2012;  “We can only observe, that, our legal system has made life too easy for criminals and too difficult for law abiding citizens”.

 When the world has moved to 21st Century, we are still clinging to laws of 1863, in which the onus lies on the prosecution to prove a case. Even when Raju, of Satyam  admitted his guilt, the legal system still requires  that the trial must go on and he be given all opportunities to defend.

 Not only our  laws are antique, there is a weak criminal justice system and it suits the Government, not to strengthen it, as 31% MLA and MP’s have a criminal back ground or are facing trial. The vacancy position in india in the courts is as under, to deal with 32 million cases pending in India. As per the law Ministry, there are 895 posts of High Court Judges as on 1-1-2012 with  275 vacancies, that is 32.5%. In the lower courts out of 18008 posts, only 14374 have been filled with 3634 vacancies

The Supreme Court, which has a sanctioned strength of 31 judges, including the CJI, there are only 26 judges. In the high courts, there are 632 judges against the sanctioned strength of 895.

Of the 263 vacancies, 18 are in Bombay high court, 74 in Allahabad, 28 in Punjab-Haryana and 18 in Andhra Pradesh. In the lower judiciary, against the 18,008 sanctioned strength in the district and subordinate courts, only 14,374 posts have been filled, leaving 3,634 posts vacant. Nearly 20% plus vacancies are there. Even otherwise, as per the recommendation of the Law Commission mad e in 1988 for effective judicial delivery system, we need 50 judges per million population or otherwise approximately 80000 judges, with proportionate increase in investigators and prosecutors.   But the Government has remained silent or non responsive on this issue

The following major scams have occurred in India, apart from others, which  are a daily occurrence

·         2G Spectrum Political Scam

·         Commonwealth Game Scam

·         Telgi Scandal Satyam Scam, IPL Scam,

·         Hawala Scam,

·         Fodder Scam

·         Bofors Scam

·         Ketan Parekh Scam,

·         Stock Market scam by Harshad Mehta ( Since dead)

               More than once Supreme Court has observed that the criminal justice has collapsed. Besides  neither the Government nor the people look at financial crime as something serious or on part with murder or dacoity. There is no stigma attached to cheating or defrauding in the stock market or possessing or making money merrily.

If human beings are fundamentally good, no government  would be necessary, but unfortunately, it is not anywhere in the world.

It is the duty of any Good government  to  deliver  the citizen from the risk of being done out of his life and property too arbitrarily and violently - one that relieves him sufficiently from the barbaric business of guarding them to enable him to engage in his pursuits. The Government should take the punishment to Rajat Gupta as a caution and wake up, before we are affected by such indiscretions