Ex-McKinsey MD Rajat Gupta on Falling From Grace & Starting Anew

Gupta’s new book, ‘Mind Without Fear’, is his version of events of the case, which he famously refused to testify.

4 min read
“I was dealt a very bad situation in the last few years of my life. The question is not why was I dealt that, the question is how did I deal with it.”
Rajat Gupta

Once the global head of the management consultancy firm McKinsey & Co, Rajat Gupta had an infamous fall from grace. From being on the board of several banks and investment firms, Gupta left it all behind after he was charged with conspiracy and securities fraud, for which he was imprisoned for two years.

Gupta has always pleaded innocence, before and after his time in prison. However, the 70-year-old's second and most recent appeal against his 2012 conviction was thrown out by a US court in January.

Gupta’s new book, ‘Mind Without Fear’, is his version of events of the case, which he famously refused to testify in court.

Speaking to The Quint, while he was in Bengaluru for the annual literature festival, Gupta said he is now “done trying”.

“I’ve fought the conviction already and lost, I made appeals... The book in itself, in a way, is a closure on that chapter in my life and I’ve moved on. I’m very interested in continuing to do what I did philanthropically,” he told The Quint.

‘Greatest Regret is Not Testifying in Court’

After famously refusing to take the stand during his conviction in 2012, Gupta admits that it is his greatest regret.

“Yes, it is my greatest regret. Not that I am confident that it would, I don’t know, have changed the outcome, but at least I would have had the satisfaction of testifying on my own behalf and telling my story the way I’ve told it in the book...would have been important to do so. Typically, the lawyers were very much against it. they have to prove the case, which my lawyers believed they could not and did not, but nevertheless, it was a story that I needed to tell because I was the only person who really knew it and I didn’t do it.” he said.


‘Politically Ambitious Prosecutors Didn’t Chase the Real Culprits’

Gupta claimed that his conviction was a product of the time and he fell prey to the machinations of various politically motivated prosecutors in the American justice system who did things “simply because they wanted to win so badly”, including pressurising witnesses.

“When the case was tried, there was a financial crisis and they wanted very much to find somebody to hold accountable. Unfortunately, they didn’t go after the real culprits of the financial crisis. You know, I think Preet Bharara is not alone. I mean, in general, many prosecutors in the US are politically very ambitious. They want to win at any cost. So there were many things he did which he knew were not true but, because of wanting to win the case so badly, he would use [them] against me already knowing that it was not true,” Gupta said.

Stating that institutions didn’t do wrong things, people did, Gupta went on to say, “I would say that they went overboard in terms of this desire to win that led them to do things that I don’t think are fair. There were the bankers and executives of banks that did many wrong things, and while the banks were fined billions of dollars, not a single executive was charged, so how can that be? Institutions don’t do wrong things, people in them do wrong things. So why won’t you hold somebody accountable for those wrongdoings, and go after some insider trading that had nothing to do with the financial crisis?”


Of Controversial Calls and Being Written Off by McKinsey

Even while resolutely claiming his innocence, Gupta explains his controversial call to hedge-fund manager Raj Rajaratnam shortly after a crucial board meeting.

“I made phone calls after every board meeting... so that does not mean that the call discussed what was discussed in the board meeting. Yeah, I made lots of phone calls, I was pretty busy all the time and if that was the case, why would I only do it in this? There were tonnes of other board meetings and other board calls,” he explains.

Despite working at McKinsey for several years and helping the firm scale new heights globally, Gupta has since been removed from the alumni directory, something he calls “hurtful”.

“I owe a lot to McKinsey for my own professional development and the firm is very near and dear to my heart. There is a principle called, ‘You’re innocent until proven guilty’. I don’t think they quite followed that. It hurt even more that there were people in McKinsey who were very good friends of mine, who I mentored and helped all along in their careers. Many of them distanced themselves from me,”
Rajat Gupta

‘7 Weeks in Solitary Confinement: Challenging, But Also Vipassana

Describing his time in prison as “moments of terror punctuated by reasonably calm times”, Gupta said that he also had to endure seven weeks in solitary confinement for a “minor infraction”.

“It was a very challenging time, but it was also a vipassana for seven weeks. It was a time for reflection, a time for really going deep within yourself, and I was fortunate enough to have the Bhagvad Gita, which they could not deny me. I had the chance to read the Bhagvad Gita cover to cover six to seven times and drew a lot of inspiration,” he said at the Bangalore Litfest.

Calling his book ‘non-prescriptive’, Gupta said that he’s written it for the young readers who can see themselves in different parts of the book and derive different lessons from it.

“If you took the name out, if it was not Rajat Gupta, it would still be an interesting story. That’s the lesson. Things will happen to you, it’s just how you react and deal with it effectively,” he said.

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Topics:  McKinsey & Co   Rajat Gupta   Stock Market 

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