It was May 1991. Salomon Brothers, the legendary Wall Street firm, found itself en-snared in a scandal where trader Paul Mozer had been submitting illegal bids for US Treasury Securities, attempting to corner the market by breaching the individual bid-ding limit. Warren Buffett, who had a $700 million investment in Salomon Brothers, stepped in to untangle the knots. The firm avoided bankruptcy and was, eventually, acquired by Travelers Group. It seemed like history was repeating itself when Uday Kotak, managing director and CEO, Kotak Mahindra Bank was sought out by the government to steer the beleaguered term-lending institution IL&FS, teetering under a pile of debt. The only difference: Uday Kotak had no ownership interest in the firm.
It is just that the 60-year-old banker has become the government’s go-to man to resolve a financial crisis that sent shock waves in the financial markets. The street shaved off3.5 trillion in market cap between August 2018, when the crisis began, and by end of September when a new board was set up. Kotak’s immaculate reputation as a prudent banker built over the past three decades made him the obvious choice.
In the world of finance, or in fact everywhere, reputation counts for a lot. “Lose money for the firm and I will be understanding, lose a shred of reputation for the firm and I will be ruthless,” Buffett famously said during the 1991 hearing, recounting his message to Salomon employees, after he