Top 5 scandals by MBA grads
In the list of famous MBAs, most are known for their success stories or entrepreneurial ventures. But there are some MBAs, who despite having it all, ended up on the wrong side of the law.
What led to their downfall is a different matter altogether. Some gave in to greed or lust and for some, we still cannot figure out why they did.
Irrespective of the why, these five MBA graduates from respected Indian and international B-Schools have landed in trouble for some or the other reason.
Presenting top five scandals by MBA graduates that rocked our nation:
1. Byrraju Ramalinga Raju
MBA, Ohio University
Claim to notoriety: Satyam Scam
Established by Byrraju Ramalinga Raju in 1987, Satyam was one of the fastest growing IT firm in India.
In January 2009, Raju resigned from the Satyam Board and admitted to financial irregularities to the tune of 70 billion rupees or 1.5 Billion US Dollars. The scam was so big that many called it the Enron Scandal of India. The company had listed 53000 employees but actually had about 40000 employees only. Raju created almost Rs 71 billion in fake billing and cash, which the PricewaterhouseCoopers auditors somehow completely missed. Raju was arrested on charges of breach of trust, conspiracy, cheating, falsification of records.
He was granted bail by the Supreme Court of India in 2011. On 28 October 2013, the Enforcement directorate filed a fresh chargesheet against Raju and 212 others (source Wiki).
Education: Bachelors of Commerce degree from Andhra Loyola College at Vijayawada; MBA from Ohio University, United States.
2. Phaneesh Murthy
MBA, IIM Ahmedabad
Claim to notoriety: Sexual harassment
Gayatri Rangachari Shah mentions in her article, “Some boys just can't keep their pants up. Phaneesh Murthy, the now deposed CEO of iGate, is the most recent example of how office relationships can implode in your face.”
How true!
Murthy faced three sexual harassment lawsuits.
The first scandal happened at Infosys. Former executive secretary Reka Maximovitch filed a case against Murthy. Around the same time, another employee Jennifer Griffith slapped a lawsuit on him. Both the cases were settled out of court. Infosys awared a Maximovitch $3 million settlement while Murthy personally handled Griffith’s settlement with $ 800,000.
One would assume Murthy has learnt his lesson. But no. He probably took “Once bitten, twice shy, third time lucky” phrase a little too seriously.
In 2013, another scandal broke out. iGate employee Araceli Roiz claimed that she is pregnant with Phaneesh Murthy's child. According to Roiz’s statement (as reported in news) said that Murthy pressured her to have an abortion. He was later sacked from the position of President & CEO by the iGate board.
Education: BTech in Mechanical Engineering from IIT Madras; MBA from the Indian Institute of Management, Ahmedabad.
3. Rajat Gupta
MBA, Harvard Business School
Claim to notoriety: Insider Trading
Rajat Gupta is the co-founder of Indian School of Business. He was the first foreign-born Managing Director (chief executive) of McKinsey & Company. He has been on the board of several top firms like Goldman Sachs, Procter & Gamble and American Airlines. He’s also known for his contribution to philanthropic causes.
In June 2012, Gupta was arrested on charges of insider trading, conspiracy and securities fraud. In October 2012, he was sentenced to two years in prison and ordered to pay $5 million in fines. He’s currently serving a two-year term in US federal prison for insider trading.
Education: BTech in Mechanical Engineering from IIT-Delhi; MBA from Harvard Business School.
4. Anil Kumar
Management, Wharton School of Business , University of Pennsylvania
Claim to notoriety: Insider Trading
Anil Kumar was Rajat Gupta’s partner-in-crime. He’s the co-founder of Indian School of Business and also a senior partner and director at McKinsey & Company. Kumar pleaded guilty to insider trading and conspiracy in 2010. He became a crucial witness against close friends and business partners Raj Rajaratnam and Rajat Gupta. He was sentenced to two years of probation in 2012 by a US court.
Education: BTech in mechanical engineering at IIT Bombay; applied mechanics course from Imperial College; Management of technology and international business at The Wharton School.
5. Subhinder Singh Prem
IMT Ghaziabad
Claim to notoriety: Reebok India Scam
The Reebok India scam is often touted to be the biggest corporate scam after Satyam.
Reebok India held managing director Subhinder Singh Prem for Rs 870-crore alleged fraud. According to allegations, two former executives of Reebok India, Prem and Vishnu Bhagat conspired together and fudged sales numbers.
Prem is currently out on bail and investigations are still going on.
Education: MBA from Institute of Management Technology, Ghaziabad.