In crime not knowing when to stop is criminal.
In the genteel world of social clubs of the likes of Delhi Golf Club, Bengal Club or the Bombay Gymkhana, life goes on in its own placid way with unfailing regularity.
Of course, you may occasionally come across some sleaze about the husband and wife (not from the same marriage, of course) being surprised by the Oldest Member during one of their more intimate moments in the club library. But otherwise, ‘staid’ is the word that describes the natural social intercourse that you get to see in these institutions.
But if you come down a few notches from the ‘club’ to the ‘cattle’ class among these institutions, there is no dearth of excitement. It may not quite match the hustle and bustle of a flea market such as ‘Chor Bazaar’ in Mumbai on a Sunday evening.
But there is a buzz alright, especially with the staff engaged in all kinds of menial tasks. And so it was with the marker for the tennis facility at the club, where yours truly parades his skills in stroking some fuzzy yellow balls — yes, that is right, cross court.
Tennis marker’s story
An announcement on the notice board said the other day that he had been compulsorily retired with a handsome compensation, to boot. While I knew he was no spring chicken, I didn’t think he had reached the age when markers hang up their shoes, quite literally and figuratively too. Some discreet enquiries made with the ball boys later, revealed the full story.
Apparently, his retirement had something to do with the mysterious disappearance of a tennis racket of a Japanese guest who routinely booked the club’s tennis facility for an exclusive game of tennis with his friends/colleagues. Of course, it was entirely possible that one of his guests had a tendency to lapse into kleptomania.
But if one ruled out that possibility, as indeed also, of the likelihood that the racket in question had sprouted wings and disappeared into the distant yonder, it was no surprise that the fingers were being pointed at him. He was, after all, the only one present at that time.
He had not only the opportunity, but was additionally possessed of a moral code that would have rivalled that of a card-sharp in one of those casinos in Las Vegas or Macau. As to the necessary skill to pull it off, that too would have been child’s play for him. He could have done it with a felicity and élan that people taking candy off kids would have had a hard time trying to match.
When to do it
I bring up the story of his moral degeneracy, for a purpose. There are similarities between his fall from Heaven (if you can describe a dishonourable discharge at a place where standards of commitment to truth, when it comes to line calls, are notoriously lax) and that of the disgrace suffered by the likes of Rajat Gupta (former boss at McKinsey), Bernie Madoff (investment manager) and of such others as Harshad Mehta and Ketan Parekh from the broking community.
All these individuals in question have suffered the fate that they had to endure only because they didn’t think through the ‘exit strategy’ they must employ while starting out to do whatever they set out to do. I must clarify that the expression, ‘exit strategy’ has a many-layered meaning in relation to what is traditionally ascribed to it.
For instance, it is not just about your knowing when to quit when you are ahead in some fraudulent game. It is much more nuanced than that. It is about having a mental view of how the whole thing is expected to pan out once you embark on something.
In the case of the tennis court marker, his exit strategy should really have been about when to embark on it! Let me explain.
He should have really thought about exiting with the guest member’s racket not just on any day (first Sunday of the month or the last, and so on), but when the number of people coming in and going out of the club was at its height. Do it on a day when the traffic is zero and you are bound to be caught.
Lesser and greater crime
Ditto with Rajat Gupta of McKinsey. The prosecutors alleged that he had conspired with Raj Rajarathinam to engage in insider trading. Gupta’s defence had all along been that he was only engaged in a casual conversation with someone who incidentally happened to be managing a sizeable investment portfolio, including that of his own.
That, at best, invokes charges of breach of fiduciary trust of the company that he was serving as a member on its Board — a far cry from being accused of insider trading.
If that is a lesser crime, then not knowing how often you can speak to an investment manager without being accused (even, if falsely) of conspiring to trade on inside information, is a greater crime.
In the case of Harshad Mehta, the absence of an ‘exit strategy’ is quite evident. If you analyse the securities scam that landed Harshad Mehta in jail, the issue was quite simple.
He had taken money from banks by promising to buy government securities but instead diverted the money into the stock market and bought securities for himself.
True, there was a process of offloading the shares and using the proceeds to buy government securities and settle the transaction with the banks.
The first phase of this cycle required that he raised larger and larger sums of money from banks ostensibly for buying government securities which would be required to settle past promises of purchasing government securities and still leave something extra, which could go into the equity market.
In short, it had all the ingredients of a classic Ponzi scheme. But it need not have been so.
If he had had an exit strategy, that would have factored in the additional third-party monies that would have flowed into the equity market to take advantage of the rise in equity values — that he himself had engineered — he would have been in the clear.
For then, he could have stopped taking monies from the banks to buy government securities and also unloaded his own investments in equities and still emerged out of it with a profit. He hadn’t, and the rest is history. Madoff and Parekh’s travails too could be described as occasioned by the absence of an exit strategy for themselves.
You conduct your life along a very straight and narrow path such as being the managing director of the largest consulting firm on earth. The sides are strewn with all manner of temptations. What do you do? Do you step aside just once or twice or a hundred times to partake of the fruit that is to be found on either side? If you don’t know the answer, then don’t ever try wandering off into the thicket by the side of the path!