What India should learn from the Rajat Gupta case?

A very famous quote by legendary value investor Warren Buffett goes thus: "It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently." We were reminded of these lines when we read what former Goldman Sachs director and McKinsey & Company Managing Partner Mr Rajat Gupta said just before being sentenced: "I have lost my reputation that I have built over a lifetime."

Just day before yesterday, Mr Gupta was sentenced to two years in federal prison in one of the biggest insider trading cases in the US. His crime was that of leaking confidential information to a hedge fund manager at the height of the financial crisis.

An article in Business Today has pointed out some very pertinent lessons for India from this entire episode. Crime and corruption are universal. They are as rampant in the US as in India. But what differentiates the two is the robustness and efficiency of the judicial system. Take this insider trading case. The quickness with which he was tried, found guilty and sentenced is indeed commendable. To give you a gist of the timeline, the trial began on May 21, 2012. On June 15, the jury found him guilty. And on October 24, he was sentenced to 2 years of imprisonment and a US$ 5 million fine. Period.

What if Mr Rajat Gupta was facing a trial in India instead of the US? It would, without any doubt, drag on for years. Remember the Satyam scam? Mr B Ramalinga Raju, the former chairman of the company which is now Mahindra Satyam, had confessed to fudging its accounts back in January 2009. As per the magazine, the Central Bureau of Investigation (CBI) had taken up the issue in February 2009. All the 10 accused have served about 18 months in prison as undertrials. There are matters still pending with several regulatory bodies including the Securities and Exchange Board of India (SEBI). In all likelihood, it will take a long time before the final verdict is out. And this wou ld be no exception. Judicial cases in India are known to go on for years, sometimes decades. But does delayed justice have much value? As the legal maxim goes: "Justice delayed is justice denied."