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In India, a Sigh of Relief Over Rajaratnam's Sri Lankan Birth

Posted by: Mehul Srivastava on October 20, 2009

Here in India, newspapers are following the Galleon hedge fund insider trading scandal with just a little bit of relief - “Thank god,” you can read between the headlines. “He’s not Indian.”

Raj Rajaratnam, the Sri Lankan-born billionaire who ran the Galleon Group, a New York-based hedge fund, was arrested Oct. 16 by federal prosecutors for insider trading. Five of his colleagues and friends were also arrested - prosecutors for the SEC and the New York Attorney General’s office say they too were involved.

In India, where successful immigrants to the west are celebrated (think Indra Nooyi, the PepsiCo CEO and Chairman, Nobel Prize winners Amartya Sen and Venki Ramakrishnan), the list of his alleged collaborators did bring some bad news: Anil Kumar, McKinsey director and a member of the board of one India’s top business schools, the Hyderabad-based Indian School of Business, had his name dragged in. Kumar denied the charges, but for the while being, it looks like he has stepped down from the prestigious board seat at ISB. Rajiv Goel, who is a director of strategic investments at Intel Capital, also made the list.

But Rajaratnam’s Indian connections spread even somewhat further, it would appear. The Economic Times, citing unnamed sources, rounded up the list of Indian investments at Galleon, and well-known companies like Edelweiss Capital, and almost completely unknown companies like Pipavav Shipyard. Both stocks took a pounding when the markets opened Tuesday - Pipapav fell as much as 16% - but ended the day not so badly hurt, down a couple of percentage points on a volatile day in the Bombay Stock Exchange.

In tiny Sri Lanka, though, the impact has been more widespread. The Colombo stock exchange-listed companies have a pretty small combined market cap, the estimated $150 million that Galleon invested in Sri Lanka made up a sizeable investment in Sri Lankan blue chips. The markets fell 1.6% by the end of trading on Tuesday, and companies in which Galleon held a stake bounced around much of the day. Few of the companies in which he is reported to have investments, including Commercial Bank of Ceylon and DFCC Bank, returned calls to reporters on Tuesday about the future of the pretty sizable stakes (close to 5%) that Galleon holds in those companies.

Reader Comments


October 20, 2009 12:12 PM

Please elaborate for us as to why Indians are breathing such a sigh of relief. Is there something to feel guilty of?

Alistair Henderson

October 20, 2009 1:17 PM

Rajaratnam is not Indian, but how about the other two Indians arrested with him? Indians are used to a culture of bribery and corruption.


October 20, 2009 2:16 PM

In this financial mess no one is LESS than anyone. They all the same and they all should be hung till death.


October 20, 2009 3:14 PM

I think it really does not matter if he is African, Indian, Chinese or even European. Asians and their face and ego is so predictable. I would like to think that in the United States, if you break the law, it does not matter if you are rich, poor, yellow or red, you get charged for the crime.


October 20, 2009 3:40 PM

This is to the people of India: The United States of America will always be #1 when it comes to- FRAUD, DECEPTION, MANIPULATION, GREED, LIES, TRICKERY, & DEEP CORRUPTION. Europe will most likely stay 2nd, & Russia will probably stay 3rd, but could surpass Europe to gain 2nd place. Keep a close watch on China. They could leap-frog Europe & Russia into 2nd place very easily. However, the USA will always remain #1, in my opinion. (I've lived in the USA all my life. It's so CORRUPT here that you wouldn't believe it!)


October 20, 2009 4:18 PM

Raj is an american citizen who lived and worked in America for over 30 years his links to sri lanka and the sub continent are marginal and he is known to have links to a terrorist organisation called LTTE. Raj has used his position as fund manager to fund terroism in Sri Lanka. There is more this scam than just all the wall street terms of greed, lies, fraud etc. there is also murder as thousands of people have been killed, maimed and left destitute because of the horrors commited by the LTTE. His nationality does not matter but his crimes have to accounted for

Chait Diwadkar

October 20, 2009 4:27 PM

Yes in the US if you are corrupt you can become President and appoint your cronies to high office. Then you can bomb the living crap out of some countries on false pretexts and convert them into developing countries, give them "aid" money so that your cronies can steal that money as well. Or if you don't feel like launching a war, you can always crash the financial system and transfer wealth upwards.


October 20, 2009 4:57 PM

man r u ok, what the hell are trying to say... u mean all thoes migrated indians are saints... come on man every one in the world know indian have a very bad reputation for bribery and curruption all over the world... wat about two rich brothers fighting within them for their fathers wealth(ambanies).. is that bringing any good name for india you mad indian

T Kumaran

October 20, 2009 5:29 PM

I don't understand why the need for this "Indian" and "desi" twist to this development, all being wtitten by journalists of Indian heritage.

Rajaratnam is a rare individual to be in this spotlight, regaredless of his heritage.

All these wrintings this one and the desi. vs. desi article in WSJ points to the mindset of all Indians that "South Asian" menas it is "Indian".

Indians need to sitback and let go their hegemonic thinking of "South Asia" as China is slowly but surely putting its power all around India, including Rajaratnam's place of birth Sri Lanka.


October 20, 2009 5:41 PM

This will bring as much bad name to Indian sub. cont. junta as Bernie Madoff brought upon the Jewish community, which is zero. So, don't worry, Mr. Chait Diwadkar. In America, everything goes as long as it is legal. Most people who work in the Wall Street or in such kind of profession have little to no moral values. For that matter, anyone who is seeking to enrich himself with wealth, that is more than what is required has committed some kind of immoral trade.


October 20, 2009 9:27 PM

Mr Ram,
I am assuming that you are Indian and the comments made by you are strictly reflection of your thoughts and belief for self.
God Bless

C. H. Ng

October 20, 2009 11:06 PM

Why the need to heave a sigh of relief that he is not an Indian? Are you trying to tell us readers that they are only good people in India, no bad ones?


October 21, 2009 12:12 AM

I don't see the need for indians to feel any sigh of relief because the main accused is not of indian origin. Of the six accused, two happen to be of Indian origin. Also the US attorney Preeth Bharara who brought the charges is also of Indian origin. All told the nationality of individuals does not matter. There is corruption in every country on the planet, although USA may be one of the few countries where (almost) no one is above the law.


October 21, 2009 4:20 AM

Chait Diwadkar and Bubba, well said! Let's not worry about what the people of the U.S. think about us Indians and Sri Lankans. We must stop caring about how other nations perceive us. The oppressors left our countries 60 years ago, we no longer have to please them. Do not be frightened of the West, they need us more than we need them.


October 21, 2009 11:42 AM

Over the last ten years, since I have been living in these United States, I must have received over a dozen driving citations [hey, i am asian, what do you expect], and not once did the officer writing up the ticket demand a bribe, which would have been routine in India. To say that corruption in India has spread into the very marrow of society wouldn't be inaccurate. Almost every, literally, police officer, bureaucrat, member of parliament, minister, and the Prime Minister is on the take. The higher up you are in India, my motherland, the more blatantly you steal. And every Indian knows it. Yet, we do nothing about it.
I am not saying that corruption doesn't exists in America, it does. But few and far in between. And, that too, mostly in the higher echelon.
And the essential difference between India and America is that, in India the Bernie Madoffs and Raja Rajratnam's never go to jail. There they join politics and become ministers.
I am serious, google the number of criminals in the Indian parliament, let alone the murderers and crime barons in the state legislatures.
p.s all indians commenting here know what i am saying is true.


October 22, 2009 1:43 AM

Prime Minister Dr. Manmohan Singh is very much respected the world over and there has been no substantial corruption charges leveled against him.

I agree to everything else.

Yet I've seen and heard about many virtuous govt. officials with a conscience - ministers and bureacrats alike.. especially the current crop.

Hope times change for the better in India.


October 22, 2009 9:31 AM

It is difficult to hold a country of birth responsible for a individuals white collared crime unless that country has in some way contributed to that crime. If Raj is of Sri Lankan origin, all Sri Lankan need not worry or feel ashamed and Indians need not feel relieved. This is not the only crime committed in Wall Street. In last two years there have been enough scandals here. In fact Indian financial system has been well protected from the financial meltdown due to strong regulations. There's not a single bank that collapsed or needed help from government to prevent collapse. Aarti is right on the high corruption in India, but her comments does show that she has been away from India for past ten years. During these ten years India had two wonderful prime ministers - Mr. Vajpayee & Dr. Singh. These two gentlemen have been respected by all Indians and never been accused of corruption by any one.

What country are we in again?

October 22, 2009 11:39 AM

Most Americans don't know the difference. All South Asians are "Indians" to us. So, not just the hedge fund founder, but his 2 cahoots at Intel and McKinsey are Indian, the tipper is an Indian, and the Manhattan prosecuter for this case is also Indian. Excuse me, what country are we living in again?

rob: who cares if they're indian??

October 22, 2009 4:59 PM

BW is becoming famous for sourcing STUPID articles about India. In America, there have been so many large-scale frauds and scandals involving big traders, bankers CEOs etc. As a HINDU, I am actually rather happy that some Indians are involved with this as well...Hindus in America are usually high-income folks, so like Jews and whites, we will be involved in some financial crimes once in a while.


October 23, 2009 8:27 AM

This article is the most absurd and borders on moronic and even racist. So what if Raj is Sri Lankan. Rajiv Goel, Anil Kumar, Roomy Khan (?), Deep Shah are Indians.... An as of yet unnamed partner at Galleon is also Indian. That's a powerful statement.


October 24, 2009 4:38 PM

Please answer following questions, and see if you have the correct answer.

1)How many saints are working in Wall Street?
a) There must be a few.

2)What do we call sub prime mortgages?
a)Massive nation wide fraud at all levels.

3)What do we call collusion between wall street - politicians, Fed Reserve & Treasury?
a) Campaign contributions. A better job later on wall street for those who worked at treasury & Government.

4) What do we call Campaign contributions
a) Bribe in advance.

5) What do we call corporate executives raiding corporate assets via massive stock options, pay packages & benefits?
a) Stealing.

There are way too many such questions and answers.

Fraud is in every nation, but the difference is in it's appearance, in US it is subtle.


October 28, 2009 7:33 AM

Rajarathnam was an Wharton Alumni where he got trained to do what a typical Ivy league MBA do - greed, greed and more greed. He must have been a teetotaler before joining the school that makes criminals in wall street.

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