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Fall from grace: Indian biz icons

 

SHIV SUNNY | New Delhi, October 26, 2012 15:55
Tags : Rajat Gupta | Anil Kumar | Ketan Parekh | Harshad Mehta | Ramlinga Raju |
 

Rajat Gupta's conviction in the insider trading case might not have come as a shock to many Indians. We have been a witness to larger scale financial scandals in India's corporate sector. What is really worrying is the fact that it is the Indians who have been in the news for all the wrong reasons, be it within India or in the business world outside. Most of these infamous people managed to reach the peak before falling from grace. TSI takes a look at six such India-born corporate personalities.

Rajat Gupta
An alumni of IIT and Harvard Business School, Indian American Rajat Gupta rose to become the managing director of management consultancy McKinsey & Company. He is also credited for being the co-founder of the prestigious Indian School of Business. All was well until he was booked for insider trading in March 2011. He fought a legal suit but was found guilty on October 24 this year. He was handed over two years imprisonment and a fine of $5 million. The judge, in an unusual gesture, made it a point to appreciate the good deeds done by Gupta in the past and the lenient punishment is attributed to his good past. The judge went on to say that “he (Gupta) is a good man, but it was a serious breach of trust.” The fallen hero who was earlier an idol for many is known for his charitable and voluntary works in the field of health, education and business.

Anil Kumar
Anil Kumar shares very similar credentials with Rajat Gupta. An Indian American, he too is an alumni of IIT and was the director at McKinsey & Company. He was the other founder of Indian School of Business. In 2010, he pleaded guilty to insider trading in the very same case in which Gupta was convicted in October this year. In 2012 he was sentenced to two years of probation. Interestingly, the judges while delivering the punishment for both the accused went on to mention that greed was not the motive for their crime. Unlike his friend Gupta, Anil maintained a low profile despite being one of the most senior employees at McKinsey.

Ramalinga Raju
The founder of Satyam Computers was alleged to be involved in one of the most infamous Indian business scandals in the recent times. The Satyam Computer Services scandal involved allegations of Ramalinga falsifying his revenues and margins. He admitted accounting frauds to an extent of 7000 crore rupees. To trade in Satyam's shares, he was also alleged to have used dummy accounts which amounts to insider trading. Ramalinga and his brother Rama Raju were arrested in 2009 and after spending over two years in prison, they were released on bail due to the delay in CBI filing the chargesheet. The people of his village have stood by him during his tough times citing the development works done by him there.

Harshad Mehta
Not only did Harshad Mehta land in prison for financial scandals, he also dragged down the then Prime Minister PV Narasimha Rao by alleging that he paid him a bribe of Rs. 1 crore. The stockbroker came into prominence by 1990 for buying shares heavily. Between 1990 and 1992, he was involved in making profits higher than legally allowed from stock markets and trading. He was also involved in a financial scandal to the tune of Rs. 5000 crore. 72 criminal offenses were lodged against him and he was sentenced to five years in prison and a fine of Rs. 25000. He died in 2001 while serving the sentence.

Ketan Parekh
Ketan Parekh is known as a trainee of Harshad Mehta. The former stock broker was convicted in 2008 for a 1999-2001 scam involving the manipulation of the Indian stock market. He was handed over a prison sentence of one year and was banned from trading in the Indian stock exchange. Along with him, six other employees of Canara Bank were jailed for his involvement in a transaction with the bank. In 2009, an investigation carried out alleged that some companies and individuals were still trading on behalf of Parekh. As a result, they were banned from trading.

Shivraj Puri
Despite working only as a relationship manager with Citibank, Shivraj Puri is alleged to be the mastermind of a Rs. 400 crore fraud case. He supposedly siphoned of almost Rs. 400 crore of investors' money into fictitious accounts. He would lure investors by talking them into a fake scheme with very high interest rates. A case was registered against him after suspicious investors filed complaints with the bank regarding the scheme. The bank was forced to take legal help after they discovered that the scheme did not even exist with the bank. He was immediately arrested, but is out on bail since May 2012. The case is pending with the court.

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Issue Dated: Feb 5, 2017