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The 5 bitter business lessons that Rajat Gupta taught me!

Part 1 : My Hero was Rajat Gupta and his behaviour made me mad

Circa 2010 : I heard Rajat Gupta speak as a keynote at the Harvard Business School (HBS) in March 2010. HBS had invited a clutch of Indian Entrepreneurs to discuss Entrepreneurship in India.

And so, why was Rajat Gupta there? Well, he was the most illustrious Indian in the United States!

If you were present at the event, correct me if I am wrong, but I heard Rajat Gupta with a cracked voice. I heard more philosophy than gyaan. I heard the voice of regret ring out loud. On that particular day, I just assumed that he must’ve had a bad day. But today after learning about his horrendous actions, I am much wiser.

These are the 5 bitter lessons I have learnt from the punishing saga of Rajat Gupta, ending in his indictment for insider trading in the courts of New York.

1. If you hang out with criminals, you become one.

Someone I know was once arrested for economic fraud in India. He spent a couple of days locked up. When I met him, he said, “Alok, in two days in a white collar jail cell, I met the most seasoned criminals. They revealed various business ideas of how to cheat and deceive people. They offered to partner me to execute their plan.

My challenge was not dealing with the mental torture of being locked up, but of preventing those criminal ideas from manifesting themselves in my mind.”

Rajat Gupta ‘hung out’ with Rajaratnam. Now, a man like Rajat Gupta who has probably shaken as many hands as Obama has, knows how to ‘read’ people and quickly ascertain what they do. Yet he chose to associate with Rajaratnam. And sure enough, Rajaratnam brought him down.

Lesson – Do not associate with even borderline crooks. You will be transformed – from entrepreneur to fraud-preneur.

2. Some things are taught by the conscience, not by Mummy-Papa.

I recently signed up on a couple of websites to offer ‘over the phone’ consultancy to venture funds, investors, etc. who like to talk to professionals and entrepreneurs to understand specific domain issues and insights.

While registering myself, the online form made me take ‘tests’ to make sure I understood what ethics and code of conduct meant.

A question asked, “If a company you are doing diligence on offers to fly you first class to Las Vegas and back to help you ‘relax’ from your efforts, will you accept?” Now, when confronted by a question like this, I don’t need to scratch my head and wonder, “What did Papa teach me?” Isn’t it obvious that the answer is a DEAD ‘NO’?

So, did Rajat Gupta need special guidance to understand that after a board meeting of a company in which you hear private, confidential information, you DON’T call up strangers and tell them what you heard? Hey! You don’t even call up your wife and tell her!

Was Rajat Gupta’s conscience eating a pretzel on the streets of New York when he called Rajaratnam minutes after a secret Goldman Sachs board meeting and spilled all the information to him?

Lesson – be guided by your conscience always. It will never lie to you. Do not believe anyone else.

3. Denial is a demonstration of Vanity.

The Rajat Gupta case and the Bill Clinton-Monica Lewinsky case bear a strong resemblance.

Both defendants were powerful, men of the world, having ‘been there, done that, seen it all’. When they were cornered into a situation that was clearly brought unto themselves, they went into what I call a ‘synthetic denial’.

Both men used technical, obtuse, clinical language and terms to describe what they had done as being “incorrect, but not illegal”. Both insisted on making a public spectacle of themselves despite being so obviously in the wrong. Men like these have Himalayan sized egos. Their false vanity deceives even themselves!

From what I read, Rajat Gutpa was offered a fine, a rap and no jail term by the SEC if he would have admitted to insider trading. But he chose not to accept and went on to defend his wrong!

Lesson – Don’t be in denial. Do not let your ego deceive you. We all make mistakes. Once discovered, correct it and redeem yourself as fast as you can!

4. When you are wrong, you are alone.

As the Rajat Gupta prosecution shows, none of his best friends, associates or colleagues tried to save him or create a safety net for him.

Lloyd Blankfein – the CEO of Goldman Sachs publicly castigated Rajat Gupta about his conduct while serving as a board member of Goldman Sachs. From what I understood, no one supported Rajat Gupta other than his family members. He was all alone.

Lesson – the old adage that ‘friends and well wishers will come to my rescue when I am trouble’ is bunk. No one will come. Save yourself, by yourself.

5. Greed is Good. But it’s not God.

I am a huge fan of Gordon Gekko (from ‘Wall Street 1’). Not for his morals but for his ambition. Personally, I believe that the motivation to achieve a lot is a great way to create important value for yourself and for society. But I do not believe that Greed is God!

Rajat Gupta had everything. He had achieved so much that he could’ve had statues of himself in Mumbai and New York. But he wanted more. His Greed was not good; it became his God.

For some strange reason, the more successful people become, the more insecure they become about proving their capabilities, their self worth, and their value! This is a disease of the rich.

Lesson – Be greedy but be good. That’s what matters.


This was reproduced as an article in the ET

Part 2 : My observation became a part of a Book

Circa Jan 2013:

This article caught the attention of Anita Raghavan who was writing a book on this episode. 

This is what appeared inside the book:



Part 3 – I met Rajat Gupta!

AUG. 19, 2013

So, I met Rajat Gupta. He was at the Sages and Scientists for all 3 days, but I gathered the gall to meet him this afternoon. I told him, “Rajat, I’ve admired you. After the insider trading incident, I got angry and wrote a negative blog in the Eco-Times on your conduct. But that has passed. Now, on behalf of Indian entrepreneurs (many of whom still ADORE you), can you tell me a few points of advise on ‘How to be Successful’?

Rajat contemplated my question and replied:

1) BE PASSIONATE about what you do. Let your feet vote for your passion. If you love to return to work, then you are doing the right work.

2) “Keep looking around the Corner” – Even though you may be in a good job/business; keep looking out for what’s happening.

3) HAVE A STRICT RULE GUIDE. Be very clear about your dos and don’ts.

4) Read the Gita. And believe in Best Effort; the fruit being what it may be.



Update – 18th-April 2014

The sad end (from the ET)







Rajat Gupta released after completing 2-year prison term




First Published on: Jun 25, 2012


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  1. Well written – found – when you are wrong, you are alone – particularly appealing….

  2. 🙂

  3. Awesome article. Teaches a lot about ethics which people seem to be forgetting these days. I’m a huge fan of Gordon Gekko too and i think Greed is good, it keeps you motivated and focused but again it shouldn’t be your God. 

  4. thanks pallav

  5. Excellent article.Beautifully written.Simple conveyed.Virtually written what i had in my mind.Somebody said Rajat Gupta made one error…and i said it was a series of errors all along the way.

  6. this time i was so curious to know the name of article’s writer after reading your article in et.

    you are so clear in your view ,especially fundamentally your lines are so strong , i really loved your article.

    The best and important lessons i like are “if you hung-out with criminals, you become one” & one line “men like these have himalayan-sized egos , there  false vanity deceives even themselves”. thanks  

  7. thank you sir. these are the values i have learnt from my parents, and my gurus.

  8. @ Alok – Time has come when we start redefining ” SUCCESS ” & ” ACHIEVMENTS “

    ” Almost “, if not “ALL” companies, their Promoters ( Entrepreneurs) / Directors / Executives OR anyone – whether we talk of Politicians / Sportsman / Film actors / Lawyers ( you just name it ) are involved in some or the other unlawful, unethical means to be successful / achieve.

    It’s high time we distinguish between ” ACHIEVERS ” and ” Accumulators of WEALTH & BAD KARMA”

    There are many such Rajat’s – like around us and they exist because we at large applaud, praise and perceive them as ( Successful Achievers ) and follow them – to be one like Rajat and at any cost.

    I am glad  – I am not that ” SUCCESSFUL” and would not, want to be in any circumstances and at that Cost.

  9. Alok 

    Great article.This should be taught to every person when he starts his career and should hang this in his office or in fron of his desk.These are the most most important code of conducts.

  10. Hi Alok,

    A wonderfully written article. when you are on the top, you got to be more careful than casual !!  some good intrepretations and insights from your end. Thank you very much.


  11. thank u!

  12. thanks BIG BOSS

  13. thanks man

  14. makes tonnes of sense.

    one of the things i learnt. if u r doing something wrong “secretly”, well u cant, coz that word doesnt exist anymore.

  15. Quite a lesson
    Greed is good, But it isn’t GOD

  16. As always a good read, I have experienced the first point 🙂

  17. heres the conversation, am sure you will learn a thing or two.

  18. Very solid, concise and to the point. thanks for sharing.

  19. Very Good article. read in ET and joined this site. 

  20. Alok,contrary to ur view on rajat not agreeing to take a rap on his knuckles by the sec and choosing to sue sec is a testament of his faith in his innosence,it might have proven otherwise it’s more faith than Himalayan sized ego as decribed by you,he is a sane person and he certainly wouldn’t have taken on the sec,i am in noway endorsing what rajat has done,it’s unfortunate people are judging him for a single mistake of his,i am sure along with the five lessons that u ve learnt from rajat there are surely positive lessons that can be learnt.p.S.even

    the sec couldn’t correlate his greed angle,other than a couple of stated things like future benefits.even ur friends won’t come to ur rescue,in this case lot of rajats friends rallied around him with the website,u can’t expect his friends to go to prison with him.

  21. Another Gekko fan here. I love it when he says “…bought my way in and now all these ivy league schmucks are sucking my knee caps…these harvard MBAs don’t add up to dogshit”. Anyways, I have personally experienced point 4, when I was in dumps during my 3rd consecutive entrepreneurial failure. Great post Alok!

  22. Another wonderful article. We should tag these and other posts as “Lessons Alok learnt”. When someone wants to be an entrepreneur or simply a good person, all she has to do is go through all these tagged posts 🙂

  23. muddy waters! Information is like a swamp, you wish to move to escape, but you need to be patient to escape. The intention and the deed never match in such situations. It is the most difficult know something life changing, legal or illegal and not use it. If you can be miserable and stop your self from being wrong, you can be a better person. If you don’t and succumbed to the greed, you are not that person you could have been. It is a sorry state.

    Very well analysed Alok, We always have a choice at times when; we can and we shouldn’t.

  24. gurpreet singh tikku has a very interesting re-joinder to this article – pls check out!

  25. dear all,

    there has been an update on this article. pls check. adding alok’s fb comment to give it a brief context…

    Alok: I was conflicted. He HAD TO know that I was very negative on him. Today, I said, “lets do this and GET CLOSURE”.

  26. valuable re-inforcement in these days of “get rich quick” environment…. as it is always said… its the ” where you want to reach?” and “HOW you shall reach?”….

  27. Fabulous Alok !

    I have just met you 1ce briefly at the 1st Rodinhooder in Gurgaon @ Striker, and then of course spoken to u a few times over phone I think. 

    I will not claim to be your most devout follower, as there certainly will be many more who adore you more than I do, but in todays day and date if I am asked a question ” Who according to you is the most honest person in in the Indian business scene ” for me it is YOU. 

    The “honesty” that reeks from all your articles, & when I say honest I don’t mean the trivial stuff ( and that too maybe you don’t do )  but

    • Honesty about your opinions even if you are the only one who agrees to it. 
    • Honesty to accept mistakes
    • Honesty of thought 
    • Honest to postmortem even if it makes u look like a butcher.
    • Honest in praise
    • Honest in clarity of thought
    • Honest to share without withholding.

    You have it ! BIG BOSS. I had 2 mentors Mr. Ratan Tata and Mr. Narayan Murthy. I add you to the list. 

  28. Dear Alok,

    Thoroughly enjoyed reading this article. Very interesting and the lessons are well placed.


  29. I think Warren Buffet said it best ““It takes 20 years to build a reputation and five minutes to ruin it.  If you think about that, you’ll do things differently.” Btw Alok…nice tshirt! 

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