Sunday, March 01, 2015

Book Review: The Billionaire's Apprentice by Anita Raghavan

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I had been wanting to read The Billionaire’s Apprentice for quite a long time. Like many others, I, too, was shocked when the news of Rajat Gupta’s conviction in insider trading was announced by a US Court. What only added fuel to the fire was the fact that two Indian immigrants Preet Bharara and Sanjay Wadhwa were behind the conviction.

This is the first book on an insider trading case written with the aid of nearly fifty wiretapped calls. The author Anita Raghavan takes us behind the scenes of the entire insider trading saga – right from the childhood days of Rajat Gupta in Kolkata and New Delhi to his initial days at Harvard and his entry into McKinsey. His success as indicated by him being appointed the managing director of McKinsey three times is juxtaposed with his eventual fall when he fell prey to Raj Rajaratnam’s sneaky association.

As the book tells us, Rajat Gupta was quite a hotshot guy – he was close to Mukesh Ambani, head of Reliance Industries and was one of the few Indian executives who could get Dr. Manmohan Singh on the phone at short notice.

The book mentions the insider trading case in great detail including the various persons involved, their modus operandi, the rise and fall of tech industry and their stocks. The way the prosecution went about building the case going through tons of documents to piece together the evidence makes for interesting reading, especially for financial junkies like me.

September 23, 2008 turned out to be a red letter day for Rajat Gupta for that was the day the Goldman Sachs had its board meeting information about which was passed on by Gupta to Rajaratnam just before the stock markets closed. While we may wonder what led Gupta to keep on passing sensitive information, as respected and wealthy as he was, his actions may be explained perhaps by his quote during his speech at Columbia University in April-2004, “I think money is very seductive. However much you say you will not fall into the trap of it, you do fall into the trap of it.”

The details of the trial are also quite interesting with the author bringing out Gupta's humane side and his family's reactions quite skillfully. According to Bharara, his rationale behind going after people involved in insider trading was that, “People with lots of money were trying to game the system.” Judge Rakoff disallowed testimony on Gupta's philanthropic plans, saying, “The annals of white-collar crime in this district are filled with people who wanted to make themselves respected, powerful members of society by giving to charity.”

The book is a must-read for those who are interested in reading about financial white-collar crimes. It is also a must-read to understand what made a person like Rajat Gupta, probably one of the most revered and influential Indian-Americans in the world, indulge in insider trading. When Rajaratnam was convicted, you do not feel bad or surprised because his persona was such. But Gupta exuded a different personality and, thus, his conviction affected everybody. The book stays with you long after you have finished reading it; I went on to read much more about the case and Gupta.

Random snippets I found interesting in the book about Rajat Gupta :)
  1. Rajat Gupta's wife Anita Mattoo was the only girl in a graduating class of 250 at IIT-Delhi in 1968.
  2. Subramanian Swamy, a well-known Indian politician, taught Rajat Gupta economics at IIT-Delhi
  3. Rajat Gupta was one of the youngest members of the Harvard Business School class of 1973 and one of three from India.
Random snippets I found interesting in the book that have absolutely nothing to do with Rajat Gupta :)
  1. Golf arrived in Calcutta in 1829, some sixty years before it reached New York.
  2. Governor-General William Bentinck introduced English as the official language for Indian higher education, a move that would have momentous consequences a hundred years later.
  3. Narayana Murthy's son could not get into IIT to study computer science so he had to go to his safety school, Cornell University.
  4. McKinsey has its roots in a company founded in 1926 by James O. McKinsey, a certified public accountant and University of Chicago professor.
References to literature in the book:
  1. Rajat Gupta's most remembered drama performance at IIT-Delhi was his role in Jean-Paul Sartre's searing existential drama Men Without Shadows.
  2. Rajat and his wife Anita acted together in a Hindi adaptation of the Moliere play The Miser.
    On his study table at Harvard, Gupta kept a tattered piece of paper which read, “But I have promises to keep and miles to go before I sleep – Robert Frost.”
  3. The Guptas named their first daughter Geetanjali after the Nobel Prize-winning epic written by the Bengali poet Rabindranath Tagore.
  4. Anita Raghavan's mother came to the United States in 1959 for an internship at the Brooklyn Public Library.
Additional reading for those interested :)

Note: I was given a review copy of this book by the publisher Hachette India.

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