This refers to the edit “Trial and error” (October 26). Rajat Gupta merely helped a friend with insider tips and asked nothing in return. He is now behind bars in a nation that swears by undiluted capitalism, but is equally zealous in guarding its basic tenets of fair play and transparency. We have reasons to be bemused.
The popular US-64 scheme – touted as the common man’s mutual fund scheme in India, with a corpus of thousands of crores of rupees – was essentially done in by suspected insider trading, which led to corporate redemption of Rs 4,000 crore in April-May 2001. This forced the Unit Trust of India (UTI) to freeze the scheme for six months and to run to seed thereafter. The government did not initiate a probe on the allegations of insider trading, but drew red herrings over investigating the dubious loss of investments by UTI in some small and medium firms and other off-market equity deals. Nothing to date has been heard on these.
In India, the common investor – as in the case of the US-64 scheme – will continue to bankroll the escapades of the unscrupulous and can expect little succour from regulators and the government.
R Narayanan Ghaziabad
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