He is also accused of nepotism and high-handedness in senior appointments in general. Wolfowitz is fighting to retain his job, even as the board of directors has formally instituted proceedings against him.
In the UK, British Petroleum's (BP's) chairman Lord John Browne had to resign from the chairman's office at BP after 41 years of service, but a few months short of scheduled retirement. Akin to Wolfowitz, Lord Browne too had been subjected to a formal inquiry by BP's board of directors.
The allegations were that he had used BP property to support his gay Canadian French partner, who turned hostile after a four-year affair broke up. Lord Browne survived these proceedings unscathed.
However, this month, he resigned just months before his scheduled and pre-announced retirement, personally losing over $30 million in retirement benefits.
The House of Lords, the ultimate appellate authority in the UK ruled against his request to keep confidential, details of legal proceedings around his gay partner's allegations.
While Lord Browne got a clean chit on alleged misuse of BP property, in the legal proceedings, he was found to have lied under oath that he had met his partner on a morning run, although the court found that he met his partner on a gay website online.
The Court, in fact, ruled that this was not serious enough to warrant any legal action for perjury and that the ignominy of being caught out would suffice. However, the mere public disclosure of this fact was adequate to force him to quit not only his job at BP but also his independent directorship in other institutions.
In India, a mofussil court routinely sealed the property of an internationally renowned artist on criminal complaints against alleged dishonorable depiction of Hindu goddesses while another directed a Bollywood starlet not to leave the country without the court's permission for having been publicly kissed by a Hollywood star.
However, it would be a struggle to think of anyone who has paid a price for lying under oath (ask any reputable senior counsel and you will be told no statement under oath in India could be taken at face value).
The Indian corporate sector too had its share of a conflict between ethics and the law. The Bombay High Court is hearing a suit on whether an independent director nominated by a state-owned financial institution can be granted stock options by the company in question. (Disclosure: my firm is involved in this litigation).
However, the public debate around this dispute is all about whether the benefit of the stock options taken by the independent director ought to have been handed over the state-owned financial institution.
In fact, routinely, most editorial comment is about how the independent director of the institution was supposedly meant to protect the interests of his institution and therefore not be amenable to favours from the company whose affairs he was sent to oversee.
The real debate ought to be on whether institutions should at all be permitted to have such insider access to listed companies. Securities laws make a distinction and treat such directors with a stated vested interest (of protecting the shareholders who nominated them, rather than guiding the company whose board they adorn) as "independent director".
Despite widespread public protests, any other director nominated by a shareholder having more than 2 per cent stake in a listed company is regarded as non-independent while directors nominated by financial institutions are given this special treatment.
Lalu Prasad is fond of saying that the day a Dalit becomes a Shankaracharya, the ends of social justice would be met.
In the same vein, it is only when a chairman of an Indian listed company has to resign for a trivial lie, or face an inquiry for granting favours to his companions (why not start with ministers who arm-twist public sector undertakings to appoint their favoured nominees, as directors) that one would say that governance standards have truly come of age in India.
The author is a partner of JSA, Advocates & Solicitors. The views expressed herein are his own.
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