Jailed ex-McKinsey CEO Rajat Gupta says the big villains got away

LONDON — The professional services consultancy, McKinsey is often mentioned in the story of graft and the erosion of Eskom in South Africa. With Trillian, the Gupta-owned company they managed to siphon off R1.6bn from the power utility. McKinsey has repaid the money and has apologised to South Africa. However, this is not the end of the company's name being associated with scandal. Earlier this year it appeared again in the headlines in the US where McKinsey is accused of benefiting from measures to help companies that are in trouble. And now former McKinsey CEO and Goldman Sachs director, Rajat Gupta has just surfaced after spending time in prison after he was found guilty of insider trading and released his memoir "Mind without Fear". In an interview with Bloomberg's Lisa Abramowicz and Paul Sweeney he says he is innocent, while the big villains of the financial crisis managed to get away. – Linda van Tilburg.All we did in the aftermath of the financial crisis is make big fines for banks, which of course, the shareholders end up paying for and the executives kept all their bonuses and all the money they made. This was the biggest crisis in American history for a long time. Thousands and thousands of people lost their jobs, they lost their pensions and they lost their homes and banks were held accountable for misdeeds (fraud, even) and yet, no-one in the senior management of any of the banks were found accountable..___STEADY_PAYWALL___.Do you think that senior financial executives should in fact, have gone to jail?.You tell me. When a bank is fined billions of dollars and admits to fraud… Human beings do that, right? No machines are committing this fraud or these bad practices. So yes, of course, I don't think the executives at that time have been held accountable..If you could go back in time, would you do anything differently in your career?.I talk about it in the book. I wouldn't do anything differently in my career. By the time all this happened, I had pretty much retired. I was spending half my time on philanthropic things and some of my time on boards and some investments. I wouldn't do it differently, per se. There were a set of things/circumstances that came together that led to this thing. Let me put it in another way. If there were a few things that I had done differently, this would have never happened. The biggest one is the fact that I resigned from Goldman Sachs board in 2008. When Lehman was about to go bankrupt, they came back to me and said, "Please don't resign." I resigned. The announcement was drafted. It was going to go out the next day and they came out and begged me to stay on, and I should have stuck to my decision. I should have resigned and none of this would have happened..Well, to this day, you maintain your innocence. What do you believe the courts got wrong?.As you know, insider trading implies that actual insider information was passed. Secondly, that there was criminal intent. Thirdly, that there was consequential benefit and they couldn't prove any of it. There was only some circumstantial evidence and timing of calls but they recorded Raj Rajaratnam (Galleon Group) for 18 months. There was not a single conversation between us that passed any insider information. There were no emails. There were no witnesses. .Yet, they convicted you. You appealed..You're saying that you know what they got wrong. They didn't meet any of the criteria, right? Secondly, there were 22 people convicted in the Galleon case (or related). I don't know what the exact number is. Every one of them had a quid pro quo arrangement with Raj. How is it that I'm the only person who had no benefit and no arrangement, nothing?.What was jail like?.By and large, jail was okay except for the fact that… as they say, "Power corrupts and absolute power corrupts absolutely" and the prison system is run as if they have absolute power. They sent me to solitary confinement three times – one time for seven weeks..What? For what? Why?.You can buy towels in the commissary in prison, right. I had a bad back, so when I sat on chairs, I rolled up two towels and stitched them for a little support pillow. They came and searched my little bunk area. They found nothing except that pillow…that towel rolled up was sitting on the bottom of my bed and the guy said, "Well, this is tampering with government property" and so they sent me to solitary confinement for seven weeks. If there is anything I would say 'please, get that out to the world – that the prison system is run like that'. It's terrible. They want you to go hang your head, be repentant, and they don't treat you like human beings in many of the times. Solitary confinement, you would think is a very quiet kind of place. Everybody's in a single cell, etc. No. It's absolutely the noisiest place in prison because there are steel doors and walls and people are going crazy. They're banging steel doors. They're shouting. The UN defines more than two weeks of solitary confinement as severe torture..And you had seven..I had seven, and this goes on. This was not just me..As a CEO of McKinsey, you had every CEO on speed dial. What's it like now? Did your friends disown you?.No. Many people have stood by me. The vast majority of people have stayed by me. Some have turned away. In addition, I was in retirement mode. I was spending most of my time on philanthropic things so when I came out after seven years, I had no particular desire to go back into the commercial world in the way I was before or way back, when I was fully engaged in the commercial world. I had no reason and many of the CEO's have honestly retired. It's been seven to nine years..What are you doing these days? What does your future hold for you?.My plan, as I said, is not really to get involved in any commercial activities but mostly, spend my time on philanthropic things – on causes that I believe in. One cause I would add is 'justice system reform' and 'prison reform'.

Jailed ex-McKinsey CEO Rajat Gupta says the big villains got away

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