Rajat Gupta
Encyclopedia
Rajat Kumar Gupta was the managing director (chief executive) of management consultancy McKinsey & Company
from 1994 to 2003 and a business leader in India and the United States. He was arrested in late 2011 by the FBI on insider trading
charges stemming from the Raj Rajaratnam
Galleon Group
case.
In his capacity at McKinsey, Gupta was recognized as the first Indian-born CEO of a global corporation. After retiring from active practice, while maintaining an affiliation at McKinsey, Gupta served as corporate chairman, board director or strategic advisor to a variety of large and notable organizations (full list): corporations including Goldman Sachs
, Procter and Gamble and American Airlines
, and non-profits including The Gates Foundation, The Global Fund
and the International Chamber of Commerce
. Rajat Gupta is additionally the co-founder of four different organizations: the Indian School of Business
with Anil Kumar
, the American India Foundation
with Victor Menezes
and Lata Krishnan, New Silk Route
with Parag Saxena
and Menezes again, and Scandent
with Ramesh Vangal.
On October 26, 2011, Gupta was arrested by the Federal Bureau of Investigation
on charges of securities fraud and conspiracy as part of an ongoing and wide-ranging insider trading case in which Gupta's close associates Raj Rajaratnam and Anil Kumar
were convicted and pled guilty, respectively. The Securities and Exchange Commission sued Gupta the same day. Gupta entered a plea of not guilty and was released on $10 million bail. Previously, from March to August 2011, the SEC had filed administrative suit against Gupta, been countersued by Gupta, and then dropped those charges. During that period, Gupta's conversations on tape with Rajaratnam, particularly those made while Gupta was a board member of Goldman Sachs, were played during Rajaratnam's trial and attracted widespread attention and notoriety. In the lead up and wake of the original SEC charges, Gupta resigned the majority of his corporate and philanthropic positions.
, India
to Pran Kumari Gupta and Ashwini Kumar Gupta. His father was a journalist for Ananda Publishers
. His father was a prominent freedom fighter and had been jailed by the British for his efforts. His mother taught at a Montessori school. Gupta had three siblings.
When Gupta was five the family moved to New Delhi
, where his father went to start the newspaper Hindustan Standard. Gupta's father died when Gupta was sixteen; Gupta's mother died two years later. Now an orphan, Gupta and his siblings "decided to live by ourselves. It was pretty unusual in those days."
He was a student at Modern School
in New Delhi
. After high school, Gupta ranked 15th in the nation in the entrance exam for the Indian Institutes of Technology. He received a Bachelor of Technology degree in Mechanical Engineering from the Indian Institute of Technology, Delhi (IIT-D) in 1971. Declining a job from the prestigious domestic firm ITC Limited, he received an MBA from Harvard Business School
(HBS) in 1973, where he was named a Baker Scholar. Gupta remarked that the first time he saw an airplane was when he flew to ITC to inform them he would be attending HBS.
over a 34-year career at the management consultancy. He stepped down as managing director in 2003 and retired from active practice in 2007, becoming, like other retired senior partners, a "senior partner emeritus." Gupta maintained an office, executive assistant, email and phone at McKinsey and Company after retiring in 2007 — and is sometimes called a "senior partner emeritus" of the firm — though in the wake of the scandals described above a McKinsey spokesperson was quoted as saying, "Our firm no longer has a professional relationship with Rajat Gupta."
At McKinsey Gupta co-founded three different organizations:
After retiring from active consulting at McKinsey, Gupta served on the board of directors or advisors — often as chairman of the board — of: (partial listing below; full listing here)
After McKinsey Gupta also co-founded and chaired the private equity firm New Silk Route
with Parag Saxena
and Victor Menezes
.
On March 1, 2011, the SEC levied administrative civil insider trading
charges against Gupta. He was accused of passing material nonpublic information to Galleon Group's Raj Rajaratnam, who in U.S. v Rajaratnam was found guilty on all 14 counts of insider trading and securities fraud and sentenced to 11 years in prison. In the wake of the SEC accusations, Gupta resigned from or did not stand for reelection to the boards of Goldman Sachs
, Procter and Gamble, AMR and its subsidiary, American Airlines Inc., Harman International, and Genpact
Ltd, among others. He also countersued the SEC and in August 2011 the charges and the countersuit were dropped by mutual agreement. In September 2011 the Wall Street Journal indicated that criminal charges were imminent. In October 2011 the United States Attorneys Office
formally filed charges. Gupta surrendered to the FBI on October 26, 2011 and was released on $10 million bail.
, then head of the New York office and later also the managing director of McKinsey, on Gupta's behalf.
Gupta began his career in New York before moving to Scandinavia to became the head of McKinsey offices there in 1981. He did well in what was then considered a "backwater" area; this is where he first made his mark. Elected senior partner in 1984, he became head of the Chicago office in 1990. In 1994 he was elected the firm's first managing director (chief executive) born outside of the US, and re-elected twice in 1997 and 2000. In this capacity, he was considered the first Indian-born CEO of a multinational organization.
After completing three full terms (the maximum allowed, by a rule he had himself initiated) and nearly a decade as head of the firm, Gupta became senior partner again in 2003 and retired from McKinsey as senior partner emeritus in 2007. Gupta is widely regarded as one of the first Indians to successfully break through the glass ceiling
, as the first Indian-born CEO of a multinational corporation.
Over a 34-year career at McKinsey, Gupta directed a number of projects aimed at helping companies develop new product/market strategies and reorganize for improved effectiveness and operations capabilities. He has a broad range of consulting experience with a variety of industries, including telecommunications, energy, and consumer goods.
During Gupta's time as head of McKinsey, the firm opened offices in 23 new countries and doubled its consultant base. His successor Ian Davis
was elected by "emphasizing the need for a return to the McKinsey heritage." This was seen as a reaction against Gupta's aggressive firm expansion. It was also a time of perceived shifting of standards. Enron
, closely identified with McKinsey, collapsed during Gupta's tenure. During the dot-com bubble
he and Anil Kumar
created a program for McKinsey to accept payment from its clients in stock. Gupta's accountability for the shifting of standards was weighed differently by different observers.
Gupta's mentors at McKinsey included Ron Daniel, the former managing director who as senior partner first hired Gupta into the New York office, and Anupam (Tino) Puri, the first Indian at the Firm and eventual senior partner.
While he was managing director Gupta co-founded the Indian School of Business
(ISB) with friend and fellow senior partner Anil Kumar
. The school was ranked number 13 in the world by The Financial Times in its "Global MBA Rankings 2011". Gupta and Kumar have both since resigned as chairman and executive board director respectively.
Gupta maintained an office, executive assistant, email and phone at McKinsey and Company after retiring in 2007 — and is sometimes called a "senior partner emeritus" of the firm — though in the wake of subsequent scandals a McKinsey spokesperson was quoted as saying, "Our firm no longer has a professional relationship with Rajat Gupta."
Source: profile
Gupta is the founding general partner and chairman of the Asia-focused $1.4-billion private equity firm New Silk Route
. Investor Parag Saxena
is current CEO, Victor Menezes
, retired vice chairman of Citigroup
, is current senior advisor, and Abdul Hafeez Shaikh
, now Finance Minister of Pakistan, was formerly a partner. In addition, Anil Kumar
, Raj Rajaratnam
, and Mark Schwartz (CEO of Soros Fund Management
) were co-founding partners in the fund, though all left before it began operation. Gupta is currently on a leave of absence as chairman of the firm. Messers. Gupta, Kumar, Menezes, Rajaratnam, and Saxena have all been the subject of or found guilty of U.S. federal or SEC securities enforcement actions.
Gupta also co-founded the Scandent Group with Ramesh Vangal and is a senior advisor of former colleague Arjun Gupta
's TeleSoft Partners., which Raj Rajaratnam
sued in 1999. Gupta's family trust was also a limited partner in the Telesoft venture. In 2009 the Reserve Bank of India found that Gupta and Vangal, the co-founders of the Scandant Group, had violated India's Foreign Exchange Management Act
(FEMA) rules, which for Non-Resident Indians (NRIs) carried severe penalties.
He has served on the corporate board of directors of investment bank Goldman Sachs
, consumer products company Procter and Gamble, aviation firm American Airlines Inc. (AMR Corp.
), technology management firm Genpact Limited (where he was chairman), banking firm Sberbank
, and technology firm Harman International.
Gupta is a former member of the board of trustees of the University of Chicago
and chair of the IIT
Alumni Board. Gupta was also on the advisory boards of many business schools, including Harvard Business School
, MIT Sloan School of Management
, and the Northwestern University
's Kellogg School of Management
. He also served on the board of overseers at Tsinghua University
and the Lauder Institute of Management & International Studies
at Wharton.
Gupta is also a co-founder and co-chair of the board of directors of the American India Foundation
with Lata Krishnan and fellow New Silk Route co-founder Victor Menezes
. Raj Rajaratnam
and Bill Clinton
also served on the board of directors of the foundation, with Clinton as honorary chairman. He is also chairman of The Global Fund to Fight AIDS, Tuberculosis and Malaria
. Gupta is chairman of the India AIDS Initiative of the The Gates Foundation
as well as their Global Health Initiative.
Gupta was also appointed as special advisor on management reform to UN Secretary-General Kofi Annan
. He is formerly a trustee on the board of the Rockefeller Foundation
.
Since 2009, Gupta has increased his focus at improving education facilities in India.
In 2009 he was elected to the American Academy of Arts and Sciences
.
In July 2010 Gupta became chairman of the International Chamber of Commerce
, the world business organization, though has since stepped down.
during the financial crisis, in particular the $5 billion Berkshire Hathaway
investment in Goldman Sachs at the height of the financial crisis in September, 2008. Coverage of the event noted that Anil Kumar — who, like Gupta, had graduated from IIT
, was a longtime highly-regarded senior partner at McKinsey
, and had also co-founded the ISB
— had already pleaded guilty to charges in the same case. Gupta, Kumar, and Rajaratnam were all close friends and business partners.
When Goldman Sachs CEO Lloyd Blankfein
asked Gupta about his insider trading rumors breaking in the press, Gupta replied, “I wouldn’t have had anything to do with that."
On March 19, 2010, it was announced that Gupta had decided not to stand for re-election to the Goldman Sach’s board of directors. At the time this was seen as a reaction to the insider trading implications; however, wiretaps released over a year later in U.S. v Rajaratnam of Anil Kumar speaking to Rajaratnam reveal an anticipated conflict-of-interest with a senior advisory role at Kohlberg Kravis Roberts. Gupta has since stepped down as senior advisor to KKR.
On March 1, 2011, the SEC
filed an administrative civil complaint against Gupta for insider trading. It is alleged that he illegally tipped Rajaratnam with insider information about Goldman Sachs and Procter & Gamble while serving served on the boards of both companies. Rajaratnam, it is alleged, "used the information from Gupta to illegally profit in hedge fund trades. ... The information on Goldman made Rajaratnam's funds $17 million richer. ... The Procter & Gamble data created illegal profits of more than $570,000 for Galleon funds managed by others," the SEC said.
"After a [Goldman Sachs] board call ... Mr. Gupta is said to have hung up the phone and called Mr. Rajartnam 23 seconds later. The next morning, the SEC says, Galleon funds sold their Goldman holdings, avoiding losses of more than $3 million," The New York Times continued.
Gupta "vigorously denied the SEC accusations." He is being represented by respected white-collar criminal attorney Gary Naftalis
of Kramer Levin Naftalis & Frankel LLP in connection with the charges. Mr. Naftalis "strongly denied that [Gupta had] done anything wrong" in 2010 when Gupta's name was first mentioned relative to the case and said in March 2011 that the SEC charges were "totally baseless." Naftalis went on to say "that Gupta is not accused of receiving anything in exchange for information provided [and that] Gupta lost his entire investment in Galleon by fall 2008." The lost investment was specified to be "USD 10 million ... in the Galleon Buccaneers Voyager Fund."
Gupta's countersuit claims he is the first person ever charged by SEC in this type of proceeding who is not a broker-dealer or investment management employee. countersuit.
Another important aspect of insider trading is gain -- Gupta's lawyer Naftalis said on March 1 that "Gupta is not accused of receiving anything in exchange for information." Yet a week later in U.S. v Rajaratnam it emerged that "Mr Rajaratnam ... might pay Mr Gupta with a large stake in the fund, and that Mr Rajaratnam loaned Mr Gupta money so he could increase his investment in a Galleon fund.” It also emerged that Mr. Gupta was in talks to become chairman of Galleon International, and therefore also stood to profit. Wiretaps in U.S. v Rajaratnam were later played of Gupta asking Rajaratnam, "I want ... us to keep having the dialog as to ... how I can be helpful in Galleon International [and] Galleon Group."
After Rajaratnam's conviction and the revelations about to Gupta in the Rajaratnam trial, the difficulty of SEC's proving even the civil charges against Gupta was still deemed considerable by observers. Among other aspects, the May, 2011, Bloomberg report noted that, "[r]emarkably, none of Gupta's alleged criminal tips to Rajaratnam appear to have been captured on the FBI's wiretaps." But the report also noted a March 2010 e-mail from Gupta to Ajit Rangnekar, dean of the Indian School of Business, with denials, assertions and, in the reporter's opinion, "obvious inaccuracies," leaving many questions on how the cases and story would yet unfold.
In the immediate aftermath of the SEC's filing of charges on March 1, 2011, "[s]pokesmen at American Airlines and Harman said they had no comment. Genpact, where Gupta is chairman, issued a statement saying he 'has made invaluable contributions to Genpact, and has always sought to hold Genpact to the highest standards of integrity and corporate governance.’” Gupta also served on the board of and Procter & Gamble (P&G), but stepped down immediately on March 1, 2011 "to prevent any distraction to the P&G board and our business," said a spokesman. On March 7, 2011 he resigned from the boards of AMR Corp, American Airlines, Harman International and ultimately Genpact Ltd.
On March 10, 2011, Gupta stepped down as chair of the International Chamber of Commerce “until a satisfactory resolution of the case." On March 15 he stepped down as chairman of the Public Health Foundation of India
. On March 20 he resigned as chairman of the Indian School of Business, after some controversy at the school and in India. On March 29 he stepped down as advisor to the Gates foundation. By April 2011 he had resigned from every board chairmanship or membership.
In the high-profile insider trading case U.S. v Rajaratnam unfolding near the same time (March 2011), wiretaps were played of Gupta describing to Rajaratnam elements of the confidential meetings of the board of directors of Goldman Sachs, including its possible willingness to purchase commercial bank Wachovia
or insurer AIG
. On March 15, 2011 an FBI wiretap from July 28, 2008 was played in the U.S. v Rajaratnam trial between Rajat Gupta and Raj Rajaratnam in which the two men discuss Goldman Sachs, Anil Kumar, Galleon International and Kohlberg Kravis Roberts. The tapes caused concern for several reasons:
As the tapes were released McKinsey was holding its regular annual partners conference, and according to a spokeswoman was "monitoring the matter and taking it seriously as you would expect.” They later released a statement saying they were "appalled and deeply dismayed." The firm has come under heavy criticism for having its former longtime senior partners and leaders (Gupta and Kumar) as well as a junior partner (Palecek) all involved in the insider trading scandal.
On March 23, 2011 Goldman Sachs CEO Lloyd Blankfein
testified that Gupta had in fact divulged board-privileged material to Rajaratnam, though the particular information was allegedly confidential and not material nonpublic (the legal standard for insider trading).
On March 18, 2011 Gupta countersued the SEC (SDNY 11 Cv. 1900). The court filing read, "Mr. Gupta denies all allegations of wrongdoing and stands ready to mount a defense against each and every one of the Commission's charges. Yet under current Commission rules, Mr. Gupta would be deprived of a jury trial, the right to use the discovery procedures of the federal court to shape his defense and the protections of the federal rules of evidence, which were crafted to bar unreliable evidence." The countersuit said the SEC action "'unfairly and unconstitutionally' singles him out,” as he is to date the only person not employed by a broker-dealer ever charged by the SEC in administrative proceedings. It is not known whether the provisions of Dodd-Frank (the law allowing for SEC administrative proceedings in this instance) may be applied retroactively to before the law’s existence, as the SEC has claimed in charging Gupta.
In July 2011, Judge Rakoff refused to throw out the countersuit against the SEC and in August, Gupta and the SEC agreed to drop their respective actions against each other. The judge had drawn attention to the fact that all 28 other SEC actions stemming from the Galleon case had been filed in federal court. As part of the August agreement, the SEC agreed to file any future charges against Gupta in federal court in New York where it would be assigned to Rakoff. There was no comment on whether such charges would be filed.
Just over three months after the SEC allegations of insider trading, Goldman Sachs shareholder James Mercer filed suit against Gupta "seeking to recover any 'short-swing' profits on Goldman's behalf."
In late September, 2011, The Wall Street Journal reported that federal prosecutors were "fully committed" to filing criminal charges and were "moving closer toward bringing" them. They had previously sparred over how, when, and whether to arrest or sue Gupta, in "a bitter dispute between federal prosecutors and securities regulators."
On October 26, 2011 the United States Attorney's Office filed charges against Gupta. He was arrested in New York City by the FBI and pleaded not guilty. He was released on $10 million bail (secured by his Connecticut house) on the same day. Gupta's lawyer wrote in an e-mail quoted in Bloomberg, “Any allegation that Rajat Gupta engaged in any unlawful conduct is totally baseless .... He did not trade in any securities, did not tip Mr. Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo.”
Former Federal prosecutor Douglas Burns, who in March had said he expected an SEC-Gupta consent agreement
, also previewed a Gupta no-quid pro quo
defense plan on Bloomberg the day of the arrest.
Three days before Gupta's arrest, Rajaratnam was reported to have said that the prosecutors had wanted him to wear a wire and tape his conversations with Gupta. "It was Rajaratnam’s understanding that were he to plead guilty and wear a wire, he might be offered a sentence of as little as five years. With good behavior, he could be out in 85 percent of that time," the report continued. Rajaratnam did not — and has not ever, at time of writing — cooperated with federal prosecutors. He has been sentenced to 11 years in prison.
The same day as US v. Gupta, the SEC sued Gupta again (this time not in an administrative proceeding) over civil claims related to the criminal charges in US v. Gupta.
were senior partners together at McKinsey & Company
for over a decade, among the earliest and best-regarded Indian-Americans in management consulting. They became friends and enjoyed a mentor-protégé relationship early into Kumar's career as senior partner. The two men co-founded the Indian School of Business
in 1997 and "were the face of McKinsey in India."
According to The Financial Times
, "the two operated as a forceful double-act to secure business for McKinsey, win access in Washington and build a brotherhood of donors around the Hyderabad-based ISB and a handful of social initiatives."
Gupta first met Raj Rajaratnam while fundraising with Kumar for the Indian School of Business in 1999. Rajaratnam and Kumar had attended Wharton business school
together in the 1980s. Two years later Gupta and Rajaratnam served together on the board of directors of the American India Foundation
.
In 1999 Rajaratnam filed a lawsuit against the Gupta-advised TeleSoft partners and its founder Arjun Gupta
(no relation), a former McKinsey consultant himself.
Gupta, Rajaratnam, and Kumar were all involved to varying degrees in the creation of private-equity firms Taj Capital and New Silk Route
. Gupta had written Rajaratnam's home address as his own in the fund formation papers. Rajaratnam and Kumar were founding partners of the private-equity firms but left before they began operation. Kumar testified that he was "treated...poorly" by his friends in the formation of the firms. Gupta remained founding partner and chairman of New Silk Route, and Rajaratnam eventually invested $50 million in New Silk Route.
While they were both senior partners, Gupta and Kumar "created a company called Mindspirit LLC in 2001 as a vehicle for their two families to make investments." Mindspirit consulted with Infogroup and its then-CEO Vinod Gupta
(also no relation) in return for stock options, though an Infogroup SEC filing would later question the payment and the business relationship between the two companies. Vinod Gupta would also say that Mindspirit was "created by the wives of Rajat Gupta and Anil Kumar." Rajat Gupta and Anil Kumar's work at Mindspirit and the relationship with Genpact both broke McKinsey's own rules (in spirit, though perhaps not technically) on external for-profit involvements, according to McKinsey's head of communications. Former President Bill Clinton
was also an investor in the Infogroup transaction; his daughter Chelsea
previously worked under Gupta and Kumar at McKinsey. Clinton had also served as chairman of the American India Foundation with Gupta and Rajaratnam.
During the dot-com bubble
of the late 1990s, Gupta and Kumar had created a program to allow McKinsey to accept stock in lieu of consulting fees.
Rajaratnam intended to make Gupta chairman of "Galleon International," an expansion of the Galleon Group
. Rajaratnam considered paying Gupta "with a large stake in the fund."
Gupta was "a regular presence at Galleon’s offices ... and showed up there periodically for lunch. Mr. Rajaratnam’s secretary would order in Indian or Chinese food and the two men would sit in Mr. Rajaratnam’s office and chat." Gupta visited Rajaratnam "biweekly" in September 2008 during the financial crisis.
Rajaratnam and Kumar vacationed together in Kenya, Africa and Miami, Florida. Kumar was a regular visitor to Gupta's houses in Connecticut, Colorado, Manhattan and Florida. Gupta was "regularly invited" to Rajaratnam's house in Manhattan and for Galleon parties.
Gupta and Rajaratnam were also connected through Goldman Sachs
. From 2006 - 2010 Gupta served on the board of the bank, by which point Rajaratnam's Galleon Group "paid hundreds of millions of dollars a year to its Wall Street banks and in return regularly received market information that would not have been disclosed to most investors." Gupta and Rajaratnam also used their Goldman Sachs relationships to market New Silk Route.
Gupta and Kumar both personally invested in Rajaratnam's Galleon funds, though Gupta lost a $10 million investment in Galleon's Voyager fund. Rajaratnam also "loaned Mr Gupta money so he could increase his investment in a Galleon fund."
Gupta knew that Rajaratnam was sending money to Kumar against McKinsey policies and possibly illegally.
The three men were also not above gossip: Rajaratnam said Gupta "seemed tormented" while on the phone with Kumar, then turned around and called Kumar a "mini-Rajat" while on the phone with Gupta. Rajaratnam also told Kumar that "there had been a lot of innuendos" about Gupta and Lata Krishnan, with whom Gupta had co-founded the American India Foundation.
and produced by Sheetal Vyas
.
, Kashmir
, India
.
Gupta owns several properties that he uses for both work and pleasure:
According to the Economic Times, "His big mansion in Connecticut is like a public dharamsala
, where friends, professors and McKinsey colleagues are encouraged to come and live, often with their families. He is also known to ask colleagues to take a break at his Colorado ranch with their families - something unheard of in the McKinsey world at that time."
Gupta has four daughters: Geetanjali Gupta-Nwanze, Megha, Aditi and Deepali. In 2008, Geetanjali Gupta married Chukwuemeka Nwanze, an Igbo
from Asaba, Nigeria
, son of Vincent Nwanze, former Deputy Consul-General at the Nigerian Consulate in New York. The wedding was held at Rajat Gupta's house in Westport, Connecticut
. Geetanjali was reported to be a Harvard BA, MBA and JD as well as a manager of the Harvard endowment fund
. Emeka is a Harvard BA and Yale MBA and MD specializing in ophthalmology.
McKinsey & Company
McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions...
from 1994 to 2003 and a business leader in India and the United States. He was arrested in late 2011 by the FBI on insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
charges stemming from the Raj Rajaratnam
Raj Rajaratnam
Raj Rajaratnam is an American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. On October 16, 2009, he was arrested by the FBI on allegations of insider trading, which also caused the Galleon Group to close. He stood trial in U.S. v...
Galleon Group
Galleon Group
Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009. The firm was at the center of a 2009 insider trading scandal that resulted in investors pulling capital from the firm rapidly...
case.
In his capacity at McKinsey, Gupta was recognized as the first Indian-born CEO of a global corporation. After retiring from active practice, while maintaining an affiliation at McKinsey, Gupta served as corporate chairman, board director or strategic advisor to a variety of large and notable organizations (full list): corporations including Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, Procter and Gamble and American Airlines
American Airlines
American Airlines, Inc. is the world's fourth-largest airline in passenger miles transported and operating revenues. American Airlines is a subsidiary of the AMR Corporation and is headquartered in Fort Worth, Texas adjacent to its largest hub at Dallas/Fort Worth International Airport...
, and non-profits including The Gates Foundation, The Global Fund
The Global Fund to Fight AIDS, Tuberculosis and Malaria
The Global Fund to Fight AIDS, Tuberculosis and Malaria is an international financing organization that aims to "[a]ttract and disburse additional resources to prevent and treat HIV and AIDS, tuberculosis and malaria." A public–private partnership, the organization has its secretariat in Geneva,...
and the International Chamber of Commerce
International Chamber of Commerce
The International Chamber of Commerce is the largest, most representative business organization in the world. Its hundreds of thousands of member companies in over 130 countries have interests spanning every sector of private enterprise....
. Rajat Gupta is additionally the co-founder of four different organizations: the Indian School of Business
Indian School of Business
The Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
with Anil Kumar
Anil Kumar
Anil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
, the American India Foundation
American India Foundation
The American India Foundation is a nonprofit American organization that is devoted to accelerating social and economic change in India...
with Victor Menezes
Victor Menezes
Victor J. Menezes is an engineer and banker, who acts as a top official in international financial organizations.-Early life:...
and Lata Krishnan, New Silk Route
New Silk Route
- History and leadership :NSR was initially named Taj Capital. Its founding team included, at various points:* Rajat Gupta, former managing partner at McKinsey & Company* Parag Saxena, former managing partner of Invesco Capital and Vedanta Capital...
with Parag Saxena
Parag Saxena
Parag Saxena is the Founding General Partner and CEO of New Silk Route. Other NSR partners include Rajat Gupta, Victor Menezes and formerly Hafeez Shaikh-Education:...
and Menezes again, and Scandent
Scandent solutions
Scandent Solutions is a broad-based information technology solutions firm in India. It has development centres in Bangalore and Chennai. It is part of Scandent Group led by Indian entrepreneur Ramesh Vangal and former Pepsi CEO Christopher Sinclair. In 2004, Scandent merged its IT services business...
with Ramesh Vangal.
On October 26, 2011, Gupta was arrested by the Federal Bureau of Investigation
Federal Bureau of Investigation
The Federal Bureau of Investigation is an agency of the United States Department of Justice that serves as both a federal criminal investigative body and an internal intelligence agency . The FBI has investigative jurisdiction over violations of more than 200 categories of federal crime...
on charges of securities fraud and conspiracy as part of an ongoing and wide-ranging insider trading case in which Gupta's close associates Raj Rajaratnam and Anil Kumar
Anil Kumar
Anil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
were convicted and pled guilty, respectively. The Securities and Exchange Commission sued Gupta the same day. Gupta entered a plea of not guilty and was released on $10 million bail. Previously, from March to August 2011, the SEC had filed administrative suit against Gupta, been countersued by Gupta, and then dropped those charges. During that period, Gupta's conversations on tape with Rajaratnam, particularly those made while Gupta was a board member of Goldman Sachs, were played during Rajaratnam's trial and attracted widespread attention and notoriety. In the lead up and wake of the original SEC charges, Gupta resigned the majority of his corporate and philanthropic positions.
Early life and education
Rajat Gupta was born in KolkataKolkata
Kolkata , formerly known as Calcutta, is the capital of the Indian state of West Bengal. Located on the east bank of the Hooghly River, it was the commercial capital of East India...
, India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
to Pran Kumari Gupta and Ashwini Kumar Gupta. His father was a journalist for Ananda Publishers
Ananda Publishers
Ananda Publishers is a large publishing group with headquarters in Kolkata. It publishes numerous Bengali books by many renowned authors. It has one of the largest stalls in the Kolkata Book Fair, and is often awarded a prize for its stall. Ananda Publishers is the division of ABP...
. His father was a prominent freedom fighter and had been jailed by the British for his efforts. His mother taught at a Montessori school. Gupta had three siblings.
When Gupta was five the family moved to New Delhi
New Delhi
New Delhi is the capital city of India. It serves as the centre of the Government of India and the Government of the National Capital Territory of Delhi. New Delhi is situated within the metropolis of Delhi. It is one of the nine districts of Delhi Union Territory. The total area of the city is...
, where his father went to start the newspaper Hindustan Standard. Gupta's father died when Gupta was sixteen; Gupta's mother died two years later. Now an orphan, Gupta and his siblings "decided to live by ourselves. It was pretty unusual in those days."
He was a student at Modern School
Modern School (New Delhi)
Modern School, commonly known as Modern, is a co-educational private school in New Delhi, India. It was founded in 1920 by Lala Raghubir Singh and Sir Sobha Singh. Considered to be one of the elite schools, Modern is also referred to as the Eton of India. It is the first private school established...
in New Delhi
New Delhi
New Delhi is the capital city of India. It serves as the centre of the Government of India and the Government of the National Capital Territory of Delhi. New Delhi is situated within the metropolis of Delhi. It is one of the nine districts of Delhi Union Territory. The total area of the city is...
. After high school, Gupta ranked 15th in the nation in the entrance exam for the Indian Institutes of Technology. He received a Bachelor of Technology degree in Mechanical Engineering from the Indian Institute of Technology, Delhi (IIT-D) in 1971. Declining a job from the prestigious domestic firm ITC Limited, he received an MBA from Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
(HBS) in 1973, where he was named a Baker Scholar. Gupta remarked that the first time he saw an airplane was when he flew to ITC to inform them he would be attending HBS.
Summary
Gupta served for nearly a decade as managing director (chief executive officer) of McKinsey & CompanyMcKinsey & Company
McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions...
over a 34-year career at the management consultancy. He stepped down as managing director in 2003 and retired from active practice in 2007, becoming, like other retired senior partners, a "senior partner emeritus." Gupta maintained an office, executive assistant, email and phone at McKinsey and Company after retiring in 2007 — and is sometimes called a "senior partner emeritus" of the firm — though in the wake of the scandals described above a McKinsey spokesperson was quoted as saying, "Our firm no longer has a professional relationship with Rajat Gupta."
At McKinsey Gupta co-founded three different organizations:
- a business school: the Indian School of BusinessIndian School of BusinessThe Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
with Anil KumarAnil KumarAnil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely.... - a charitable non-profit: the American India FoundationAmerican India FoundationThe American India Foundation is a nonprofit American organization that is devoted to accelerating social and economic change in India...
with Victor MenezesVictor MenezesVictor J. Menezes is an engineer and banker, who acts as a top official in international financial organizations.-Early life:...
and Lata Krishnan - a technology solutions company: ScandentScandent solutionsScandent Solutions is a broad-based information technology solutions firm in India. It has development centres in Bangalore and Chennai. It is part of Scandent Group led by Indian entrepreneur Ramesh Vangal and former Pepsi CEO Christopher Sinclair. In 2004, Scandent merged its IT services business...
with Ramesh Vangal.
After retiring from active consulting at McKinsey, Gupta served on the board of directors or advisors — often as chairman of the board — of: (partial listing below; full listing here)
- large public companies: banking (Goldman SachsGoldman SachsThe Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
), consumer products (Procter and Gamble), aviation (AMR Corporation and subsidiary American AirlinesAmerican AirlinesAmerican Airlines, Inc. is the world's fourth-largest airline in passenger miles transported and operating revenues. American Airlines is a subsidiary of the AMR Corporation and is headquartered in Fort Worth, Texas adjacent to its largest hub at Dallas/Fort Worth International Airport...
Inc.), technology (Harman International); - international policy/industry institutions: International Chamber of CommerceInternational Chamber of CommerceThe International Chamber of Commerce is the largest, most representative business organization in the world. Its hundreds of thousands of member companies in over 130 countries have interests spanning every sector of private enterprise....
, special advisor to the Secretary-General of the United NationsUnited NationsThe United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace... - educational institutions: Harvard Business SchoolHarvard Business SchoolHarvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
, Indian School of BusinessIndian School of BusinessThe Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
, IITIndian Institutes of TechnologyThe Indian Institutes of Technology are a group of autonomous engineering and technology-oriented institutes of higher education. The IITs are governed by the Institutes of Technology Act, 1961 which has declared them as “institutions of national importance”, and lays down their powers, duties,...
, Tsinghua UniversityTsinghua UniversityTsinghua University , colloquially known in Chinese as Qinghua, is a university in Beijing, China. The school is one of the nine universities of the C9 League. It was established in 1911 under the name "Tsinghua Xuetang" or "Tsinghua College" and was renamed the "Tsinghua School" one year later...
, MIT SloanMIT Sloan School of ManagementThe MIT Sloan School of Management is the business school of the Massachusetts Institute of Technology, in Cambridge, Massachusetts....
, Kellogg School of ManagementKellogg School of ManagementThe Kellogg School of Management is the business school of Northwestern University in Evanston, Illinois, downtown Chicago, Illinois and Miami, Florida. Kellogg offers full-time, part-time, and executive programs, as well as partnering programs with schools in China, India, Hong Kong, Israel,... - charitable organizations: The Gates FoundationBill & Melinda Gates FoundationThe Bill & Melinda Gates Foundation is the largest transparently operated private foundation in the world, founded by Bill and Melinda Gates. It is "driven by the interests and passions of the Gates family"...
, American India FoundationAmerican India FoundationThe American India Foundation is a nonprofit American organization that is devoted to accelerating social and economic change in India... - health organizations: Global Fund for AIDS, Malaria, and TuberculosisThe Global Fund to Fight AIDS, Tuberculosis and MalariaThe Global Fund to Fight AIDS, Tuberculosis and Malaria is an international financing organization that aims to "[a]ttract and disburse additional resources to prevent and treat HIV and AIDS, tuberculosis and malaria." A public–private partnership, the organization has its secretariat in Geneva,...
, Global Health CouncilGlobal Health CouncilThe Global Health Council is a United States-based non-profit networking organizing linking "several hundred health non-governmental organizations around the world to share knowledge and resources, build partnerships and together become stronger advocates for health"...
, Harvard School of Public HealthHarvard School of Public HealthThe Harvard School of Public Health is one of the professional graduate schools of Harvard University, located in the Longwood Area of the Boston, Massachusetts neighborhood of Mission Hill, which is next to Harvard Medical School. HSPH is considered a significant school focusing on health in the...
, Cornell Medical College
After McKinsey Gupta also co-founded and chaired the private equity firm New Silk Route
New Silk Route
- History and leadership :NSR was initially named Taj Capital. Its founding team included, at various points:* Rajat Gupta, former managing partner at McKinsey & Company* Parag Saxena, former managing partner of Invesco Capital and Vedanta Capital...
with Parag Saxena
Parag Saxena
Parag Saxena is the Founding General Partner and CEO of New Silk Route. Other NSR partners include Rajat Gupta, Victor Menezes and formerly Hafeez Shaikh-Education:...
and Victor Menezes
Victor Menezes
Victor J. Menezes is an engineer and banker, who acts as a top official in international financial organizations.-Early life:...
.
On March 1, 2011, the SEC levied administrative civil insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
charges against Gupta. He was accused of passing material nonpublic information to Galleon Group's Raj Rajaratnam, who in U.S. v Rajaratnam was found guilty on all 14 counts of insider trading and securities fraud and sentenced to 11 years in prison. In the wake of the SEC accusations, Gupta resigned from or did not stand for reelection to the boards of Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, Procter and Gamble, AMR and its subsidiary, American Airlines Inc., Harman International, and Genpact
Genpact
Genpact Limited is a global business process and technology management company. It was formerly a GE owned company called GE Capital International Services or GECIS. It operates from India, China, Guatemala, Hungary, México, Morocco, the Philippines, Poland, the Netherlands, Romania, Spain, South...
Ltd, among others. He also countersued the SEC and in August 2011 the charges and the countersuit were dropped by mutual agreement. In September 2011 the Wall Street Journal indicated that criminal charges were imminent. In October 2011 the United States Attorneys Office
United States Attorney
United States Attorneys represent the United States federal government in United States district court and United States court of appeals. There are 93 U.S. Attorneys stationed throughout the United States, Puerto Rico, the U.S. Virgin Islands, Guam, and the Northern Mariana Islands...
formally filed charges. Gupta surrendered to the FBI on October 26, 2011 and was released on $10 million bail.
McKinsey and Company
Gupta joined McKinsey & Company in 1973 as one of the earliest Indian-Americans at the consultancy. He was initially rejected because of inadequate work experience, a decision that was overturned after his Harvard Business School professor Walter J. Salmon called Ron DanielRon Daniel (businessman)
D. Ronald "Ron" Daniel was a longtime top senior partner and director at management consultancy McKinsey & Company, serving as managing director from 1976 to 1988. He graduated from Wesleyan University with a B.A. in mathematics and received an M.B.A. from Harvard Business School.-Career:Daniel...
, then head of the New York office and later also the managing director of McKinsey, on Gupta's behalf.
Gupta began his career in New York before moving to Scandinavia to became the head of McKinsey offices there in 1981. He did well in what was then considered a "backwater" area; this is where he first made his mark. Elected senior partner in 1984, he became head of the Chicago office in 1990. In 1994 he was elected the firm's first managing director (chief executive) born outside of the US, and re-elected twice in 1997 and 2000. In this capacity, he was considered the first Indian-born CEO of a multinational organization.
After completing three full terms (the maximum allowed, by a rule he had himself initiated) and nearly a decade as head of the firm, Gupta became senior partner again in 2003 and retired from McKinsey as senior partner emeritus in 2007. Gupta is widely regarded as one of the first Indians to successfully break through the glass ceiling
Glass ceiling
In economics, the term glass ceiling refers to "the unseen, yet unbreachable barrier that keeps minorities and women from rising to the upper rungs of the corporate ladder, regardless of their qualifications or achievements." Initially, the metaphor applied to barriers in the careers of women but...
, as the first Indian-born CEO of a multinational corporation.
Over a 34-year career at McKinsey, Gupta directed a number of projects aimed at helping companies develop new product/market strategies and reorganize for improved effectiveness and operations capabilities. He has a broad range of consulting experience with a variety of industries, including telecommunications, energy, and consumer goods.
During Gupta's time as head of McKinsey, the firm opened offices in 23 new countries and doubled its consultant base. His successor Ian Davis
Ian Davis
Ian Davis was a longtime top senior partner and director at management consultancy McKinsey & Company, serving as managing director from 2003 to 2009. He succeeded Rajat Gupta on July 1, 2003. He joined McKinsey in 1979, retired in 2010 and currently serves as a senior partner emeritus.Davis was...
was elected by "emphasizing the need for a return to the McKinsey heritage." This was seen as a reaction against Gupta's aggressive firm expansion. It was also a time of perceived shifting of standards. Enron
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. Before its bankruptcy on December 2, 2001, Enron employed approximately 22,000 staff and was one of the world's leading electricity, natural gas, communications, and pulp and paper companies, with...
, closely identified with McKinsey, collapsed during Gupta's tenure. During the dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
he and Anil Kumar
Anil Kumar
Anil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
created a program for McKinsey to accept payment from its clients in stock. Gupta's accountability for the shifting of standards was weighed differently by different observers.
Gupta's mentors at McKinsey included Ron Daniel, the former managing director who as senior partner first hired Gupta into the New York office, and Anupam (Tino) Puri, the first Indian at the Firm and eventual senior partner.
While he was managing director Gupta co-founded the Indian School of Business
Indian School of Business
The Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
(ISB) with friend and fellow senior partner Anil Kumar
Anil Kumar
Anil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
. The school was ranked number 13 in the world by The Financial Times in its "Global MBA Rankings 2011". Gupta and Kumar have both since resigned as chairman and executive board director respectively.
Gupta maintained an office, executive assistant, email and phone at McKinsey and Company after retiring in 2007 — and is sometimes called a "senior partner emeritus" of the firm — though in the wake of subsequent scandals a McKinsey spokesperson was quoted as saying, "Our firm no longer has a professional relationship with Rajat Gupta."
Career progression
| Year | Event |
|---|---|
| 1973 | Joins McKinsey |
| 1973-1981 | Associate in the New York office |
| 1980 | Elected partner |
| 1981-1986 | Partner and Head of the Scandinavia office |
| 1984 | Elected senior partner |
| 1986-1989 | Senior partner in the Chicago office |
| 1989-1994 | Senior partner and Head of the Chicago office |
| 1994 | Elected managing director |
| 1994-2003 | Managing director (chief executive) |
| 2003-2007 | Senior partner |
| 2007 | Retires from McKinsey |
| 2007-present | Senior partner emeritus |
Source: profile
Post-McKinsey involvements
The following is a partial listing of Gupta's professional affiliations after his career at McKinsey, possibly incomplete as to status. An affiliation list may be found later in this article.Gupta is the founding general partner and chairman of the Asia-focused $1.4-billion private equity firm New Silk Route
New Silk Route
- History and leadership :NSR was initially named Taj Capital. Its founding team included, at various points:* Rajat Gupta, former managing partner at McKinsey & Company* Parag Saxena, former managing partner of Invesco Capital and Vedanta Capital...
. Investor Parag Saxena
Parag Saxena
Parag Saxena is the Founding General Partner and CEO of New Silk Route. Other NSR partners include Rajat Gupta, Victor Menezes and formerly Hafeez Shaikh-Education:...
is current CEO, Victor Menezes
Victor Menezes
Victor J. Menezes is an engineer and banker, who acts as a top official in international financial organizations.-Early life:...
, retired vice chairman of Citigroup
Citigroup
Citigroup Inc. or Citi is an American multinational financial services corporation headquartered in Manhattan, New York City, New York, United States. Citigroup was formed from one of the world's largest mergers in history by combining the banking giant Citicorp and financial conglomerate...
, is current senior advisor, and Abdul Hafeez Shaikh
Abdul Hafeez Shaikh
Abdul Hafeez Shaikh is a Pakistani economist and a politician from Sindh province, Pakistan. Dr. Shaikh is the current Finance Minister in the Cabinet of Pakistan. Dr. Shaikh was elected as a Member of the Senate from the Pakistan Peoples Party platform....
, now Finance Minister of Pakistan, was formerly a partner. In addition, Anil Kumar
Anil Kumar
Anil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
, Raj Rajaratnam
Raj Rajaratnam
Raj Rajaratnam is an American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. On October 16, 2009, he was arrested by the FBI on allegations of insider trading, which also caused the Galleon Group to close. He stood trial in U.S. v...
, and Mark Schwartz (CEO of Soros Fund Management
Soros Fund Management
Soros Fund Management LLC is an American, privately held, hedge fund management firm founded in 1969 by George Soros. In 2010 it was reported to be one of the most profitable firms in the hedge fund industry, averaging a 20% annual rate of return over four decades.-Overview:Soros Fund Management...
) were co-founding partners in the fund, though all left before it began operation. Gupta is currently on a leave of absence as chairman of the firm. Messers. Gupta, Kumar, Menezes, Rajaratnam, and Saxena have all been the subject of or found guilty of U.S. federal or SEC securities enforcement actions.
Gupta also co-founded the Scandent Group with Ramesh Vangal and is a senior advisor of former colleague Arjun Gupta
Arjun Gupta
Arjun Gupta is the Founder and Managing Director of TeleSoft Partners, a special situations venture capital firm founded in 1996. TeleSoft provides value added capital for Technology, Communications companies and companies in the Energy Value Chain...
's TeleSoft Partners., which Raj Rajaratnam
Raj Rajaratnam
Raj Rajaratnam is an American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. On October 16, 2009, he was arrested by the FBI on allegations of insider trading, which also caused the Galleon Group to close. He stood trial in U.S. v...
sued in 1999. Gupta's family trust was also a limited partner in the Telesoft venture. In 2009 the Reserve Bank of India found that Gupta and Vangal, the co-founders of the Scandant Group, had violated India's Foreign Exchange Management Act
Foreign Exchange Management Act
The Foreign Exchange Management Act was an act passed in the winter session of Parliament in 1999 which replaced Foreign Exchange Regulation Act. This act seeks to make offenses related to foreign exchange civil offenses...
(FEMA) rules, which for Non-Resident Indians (NRIs) carried severe penalties.
He has served on the corporate board of directors of investment bank Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
, consumer products company Procter and Gamble, aviation firm American Airlines Inc. (AMR Corp.
AMR Corp.
AMR Corporation is a commercial aviation business and airline holding company based in Fort Worth, Texas, United States. Formed in 1982, as part of American Airlines's non-bankruptcy reorganization into a Delaware corporation, its name derives from American Airlines's ticker symbol on the New York...
), technology management firm Genpact Limited (where he was chairman), banking firm Sberbank
Sberbank
Sberbank Rossii is the largest bank in Russia and Eastern Europe. The company's headquarters are in Moscow and its history goes back to Cancrin's financial reform of 1841...
, and technology firm Harman International.
Gupta is a former member of the board of trustees of the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
and chair of the IIT
Indian Institutes of Technology
The Indian Institutes of Technology are a group of autonomous engineering and technology-oriented institutes of higher education. The IITs are governed by the Institutes of Technology Act, 1961 which has declared them as “institutions of national importance”, and lays down their powers, duties,...
Alumni Board. Gupta was also on the advisory boards of many business schools, including Harvard Business School
Harvard Business School
Harvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
, MIT Sloan School of Management
MIT Sloan School of Management
The MIT Sloan School of Management is the business school of the Massachusetts Institute of Technology, in Cambridge, Massachusetts....
, and the Northwestern University
Northwestern University
Northwestern University is a private research university in Evanston and Chicago, Illinois, USA. Northwestern has eleven undergraduate, graduate, and professional schools offering 124 undergraduate degrees and 145 graduate and professional degrees....
's Kellogg School of Management
Kellogg School of Management
The Kellogg School of Management is the business school of Northwestern University in Evanston, Illinois, downtown Chicago, Illinois and Miami, Florida. Kellogg offers full-time, part-time, and executive programs, as well as partnering programs with schools in China, India, Hong Kong, Israel,...
. He also served on the board of overseers at Tsinghua University
Tsinghua University
Tsinghua University , colloquially known in Chinese as Qinghua, is a university in Beijing, China. The school is one of the nine universities of the C9 League. It was established in 1911 under the name "Tsinghua Xuetang" or "Tsinghua College" and was renamed the "Tsinghua School" one year later...
and the Lauder Institute of Management & International Studies
Lauder Institute
The Joseph H. Lauder Institute of Management & International Studies is part of a dual degree program at the University of Pennsylvania, combining an MA in International Studies from the School of Arts & Sciences with an MBA from The Wharton School or JD from the Law School...
at Wharton.
Gupta is also a co-founder and co-chair of the board of directors of the American India Foundation
American India Foundation
The American India Foundation is a nonprofit American organization that is devoted to accelerating social and economic change in India...
with Lata Krishnan and fellow New Silk Route co-founder Victor Menezes
Victor Menezes
Victor J. Menezes is an engineer and banker, who acts as a top official in international financial organizations.-Early life:...
. Raj Rajaratnam
Raj Rajaratnam
Raj Rajaratnam is an American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. On October 16, 2009, he was arrested by the FBI on allegations of insider trading, which also caused the Galleon Group to close. He stood trial in U.S. v...
and Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
also served on the board of directors of the foundation, with Clinton as honorary chairman. He is also chairman of The Global Fund to Fight AIDS, Tuberculosis and Malaria
The Global Fund to Fight AIDS, Tuberculosis and Malaria
The Global Fund to Fight AIDS, Tuberculosis and Malaria is an international financing organization that aims to "[a]ttract and disburse additional resources to prevent and treat HIV and AIDS, tuberculosis and malaria." A public–private partnership, the organization has its secretariat in Geneva,...
. Gupta is chairman of the India AIDS Initiative of the The Gates Foundation
Bill & Melinda Gates Foundation
The Bill & Melinda Gates Foundation is the largest transparently operated private foundation in the world, founded by Bill and Melinda Gates. It is "driven by the interests and passions of the Gates family"...
as well as their Global Health Initiative.
Gupta was also appointed as special advisor on management reform to UN Secretary-General Kofi Annan
Kofi Annan
Kofi Atta Annan is a Ghanaian diplomat who served as the seventh Secretary-General of the UN from 1 January 1997 to 31 December 2006...
. He is formerly a trustee on the board of the Rockefeller Foundation
Rockefeller Foundation
The Rockefeller Foundation is a prominent philanthropic organization and private foundation based at 420 Fifth Avenue, New York City. The preeminent institution established by the six-generation Rockefeller family, it was founded by John D. Rockefeller , along with his son John D. Rockefeller, Jr...
.
Since 2009, Gupta has increased his focus at improving education facilities in India.
In 2009 he was elected to the American Academy of Arts and Sciences
American Academy of Arts and Sciences
The American Academy of Arts and Sciences is an independent policy research center that conducts multidisciplinary studies of complex and emerging problems. The Academy’s elected members are leaders in the academic disciplines, the arts, business, and public affairs.James Bowdoin, John Adams, and...
.
In July 2010 Gupta became chairman of the International Chamber of Commerce
International Chamber of Commerce
The International Chamber of Commerce is the largest, most representative business organization in the world. Its hundreds of thousands of member companies in over 130 countries have interests spanning every sector of private enterprise....
, the world business organization, though has since stepped down.
Insider trading charges
2010
On April 15, 2010, the Wall Street Journal reported that federal prosecutors in the United States were investigating Gupta's involvement in providing insider information to Galleon hedge-fund founder Raj RajaratnamRaj Rajaratnam
Raj Rajaratnam is an American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. On October 16, 2009, he was arrested by the FBI on allegations of insider trading, which also caused the Galleon Group to close. He stood trial in U.S. v...
during the financial crisis, in particular the $5 billion Berkshire Hathaway
Berkshire Hathaway
Berkshire Hathaway Inc. is an American multinational conglomerate holding company headquartered in Omaha, Nebraska, United States, that oversees and manages a number of subsidiary companies. The company averaged an annual growth in book value of 20.3% to its shareholders for the last 44 years,...
investment in Goldman Sachs at the height of the financial crisis in September, 2008. Coverage of the event noted that Anil Kumar — who, like Gupta, had graduated from IIT
Indian Institutes of Technology
The Indian Institutes of Technology are a group of autonomous engineering and technology-oriented institutes of higher education. The IITs are governed by the Institutes of Technology Act, 1961 which has declared them as “institutions of national importance”, and lays down their powers, duties,...
, was a longtime highly-regarded senior partner at McKinsey
McKinsey & Company
McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions...
, and had also co-founded the ISB
Indian School of Business
The Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
— had already pleaded guilty to charges in the same case. Gupta, Kumar, and Rajaratnam were all close friends and business partners.
When Goldman Sachs CEO Lloyd Blankfein
Lloyd Blankfein
Lloyd Craig Blankfein is an American business executive. He is currently the CEO and Chairman of Goldman Sachs. He has been in this position since the May 31, 2006 nomination of former CEO Henry Paulson as Secretary of the Treasury under George W...
asked Gupta about his insider trading rumors breaking in the press, Gupta replied, “I wouldn’t have had anything to do with that."
On March 19, 2010, it was announced that Gupta had decided not to stand for re-election to the Goldman Sach’s board of directors. At the time this was seen as a reaction to the insider trading implications; however, wiretaps released over a year later in U.S. v Rajaratnam of Anil Kumar speaking to Rajaratnam reveal an anticipated conflict-of-interest with a senior advisory role at Kohlberg Kravis Roberts. Gupta has since stepped down as senior advisor to KKR.
SEC v. Gupta administrative suit
On March 1, 2011, the SEC
United States Securities and Exchange Commission
The U.S. Securities and Exchange Commission is a federal agency which holds primary responsibility for enforcing the federal securities laws and regulating the securities industry, the nation's stock and options exchanges, and other electronic securities markets in the United States...
filed an administrative civil complaint against Gupta for insider trading. It is alleged that he illegally tipped Rajaratnam with insider information about Goldman Sachs and Procter & Gamble while serving served on the boards of both companies. Rajaratnam, it is alleged, "used the information from Gupta to illegally profit in hedge fund trades. ... The information on Goldman made Rajaratnam's funds $17 million richer. ... The Procter & Gamble data created illegal profits of more than $570,000 for Galleon funds managed by others," the SEC said.
"After a [Goldman Sachs] board call ... Mr. Gupta is said to have hung up the phone and called Mr. Rajartnam 23 seconds later. The next morning, the SEC says, Galleon funds sold their Goldman holdings, avoiding losses of more than $3 million," The New York Times continued.
Gupta "vigorously denied the SEC accusations." He is being represented by respected white-collar criminal attorney Gary Naftalis
Gary P. Naftalis
Gary P. Naftalis is a leading American trial lawyer, and serves as head of the litigation department and co-chair of Kramer Levin Naftalis & Frankel LLP, the New York City law firm. Naftalis graduated Phi Beta Kappa from Rutgers University , earned a masters in history at Brown University , and...
of Kramer Levin Naftalis & Frankel LLP in connection with the charges. Mr. Naftalis "strongly denied that [Gupta had] done anything wrong" in 2010 when Gupta's name was first mentioned relative to the case and said in March 2011 that the SEC charges were "totally baseless." Naftalis went on to say "that Gupta is not accused of receiving anything in exchange for information provided [and that] Gupta lost his entire investment in Galleon by fall 2008." The lost investment was specified to be "USD 10 million ... in the Galleon Buccaneers Voyager Fund."
Gupta's countersuit claims he is the first person ever charged by SEC in this type of proceeding who is not a broker-dealer or investment management employee. countersuit.
Another important aspect of insider trading is gain -- Gupta's lawyer Naftalis said on March 1 that "Gupta is not accused of receiving anything in exchange for information." Yet a week later in U.S. v Rajaratnam it emerged that "Mr Rajaratnam ... might pay Mr Gupta with a large stake in the fund, and that Mr Rajaratnam loaned Mr Gupta money so he could increase his investment in a Galleon fund.” It also emerged that Mr. Gupta was in talks to become chairman of Galleon International, and therefore also stood to profit. Wiretaps in U.S. v Rajaratnam were later played of Gupta asking Rajaratnam, "I want ... us to keep having the dialog as to ... how I can be helpful in Galleon International [and] Galleon Group."
After Rajaratnam's conviction and the revelations about to Gupta in the Rajaratnam trial, the difficulty of SEC's proving even the civil charges against Gupta was still deemed considerable by observers. Among other aspects, the May, 2011, Bloomberg report noted that, "[r]emarkably, none of Gupta's alleged criminal tips to Rajaratnam appear to have been captured on the FBI's wiretaps." But the report also noted a March 2010 e-mail from Gupta to Ajit Rangnekar, dean of the Indian School of Business, with denials, assertions and, in the reporter's opinion, "obvious inaccuracies," leaving many questions on how the cases and story would yet unfold.
Subsequent board resignations
In the immediate aftermath of the SEC's filing of charges on March 1, 2011, "[s]pokesmen at American Airlines and Harman said they had no comment. Genpact, where Gupta is chairman, issued a statement saying he 'has made invaluable contributions to Genpact, and has always sought to hold Genpact to the highest standards of integrity and corporate governance.’” Gupta also served on the board of and Procter & Gamble (P&G), but stepped down immediately on March 1, 2011 "to prevent any distraction to the P&G board and our business," said a spokesman. On March 7, 2011 he resigned from the boards of AMR Corp, American Airlines, Harman International and ultimately Genpact Ltd.
On March 10, 2011, Gupta stepped down as chair of the International Chamber of Commerce “until a satisfactory resolution of the case." On March 15 he stepped down as chairman of the Public Health Foundation of India
Public Health Foundation of India
The Public Health Foundation of India , is an autonomous foundation located in New Delhi, India. The foundation was created as a public-private initiative and launched by the Prime minister of India, Manmohan Singh in 2006 with the aim of enhancing the capacity of public health professionals in the...
. On March 20 he resigned as chairman of the Indian School of Business, after some controversy at the school and in India. On March 29 he stepped down as advisor to the Gates foundation. By April 2011 he had resigned from every board chairmanship or membership.
US v. Rajaratnam wiretaps
In the high-profile insider trading case U.S. v Rajaratnam unfolding near the same time (March 2011), wiretaps were played of Gupta describing to Rajaratnam elements of the confidential meetings of the board of directors of Goldman Sachs, including its possible willingness to purchase commercial bank Wachovia
Wachovia
Wachovia was a diversified financial services company based in Charlotte, North Carolina. Before its acquisition by Wells Fargo in 2008, Wachovia was the fourth-largest bank holding company in the United States based on total assets...
or insurer AIG
AIG
AIG is American International Group, a major American insurance corporation.AIG may also refer to:* And-inverter graph, a concept in computer theory* Answers in Genesis, a creationist organization in the U.S.* Arta Industrial Group in Iran...
. On March 15, 2011 an FBI wiretap from July 28, 2008 was played in the U.S. v Rajaratnam trial between Rajat Gupta and Raj Rajaratnam in which the two men discuss Goldman Sachs, Anil Kumar, Galleon International and Kohlberg Kravis Roberts. The tapes caused concern for several reasons:
- confidentiality Gupta revealed board-privileged material on Goldman Sachs to Rajaratnam, after a 34-year career respecting client confidentiality at McKinsey. This by itself, however, is unlikely to be sufficient to criminally charge Gupta, as it may not meet the standard for insider tradingInsider tradingInsider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
. It should also be noted that the call can simply be construed as one friend calling another for help in preparing for a meeting with Gary CohnGary CohnGary D. Cohn is President and COO of investment banking and securities firm Goldman Sachs.-Personal life:He and his wife, Lisa, grew up in Shaker Heights, Ohio and currently reside in New York City. When he graduated from American University, his first job was for U.S...
, Goldman’s president. (“AIG was definitely in the discussion mix.”) - habituality Gupta's information to Rajaratnam was delivered very casually, as though it were not uncommon. A Bloomberg profile quotes a CEO saying the wiretaps "sounded to him just like Gupta consulting a client."
- gain A key notion in insider trading is that of benefit to the tipper. This benefit does not have to be monetary; in the case of Galleon co-conspiritor Robert Moffat of IBM, the gain was relational with Danielle Chiesi. Here the gain is clearly a chairman role in Rajaratnam-owned Galleon International and further investment opportunities with Rajaratnam, including New Silk Route and other Galleon funds. (“You’ve given me a position at Galleon International…that’s good enough.”)
- complicity Gupta, as head of McKinsey for a decade, was well aware of McKinsey’s rules prohibiting outside consulting. Yet he was neither surprised nor upset at protégé and business partner Anil KumarAnil KumarAnil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
’s illegal (by McKinsey rules) external dealings with Rajaratnam, particularly the offshore cash payments. It remains unclear whether Gupta was aware Rajaratnam was paying Kumar for inside information. (“I think you're being very generous...he [Kumar] should sometimes say thank you for that.”) - legal maneuvering Gupta's lawyer had released statements saying "There are no tapes or any other direct evidence of me tipping Mr Rajaratnam" and that "the business relationship between Mr Rajaratnam and I were strained." Yet the tapes reveal Gupta divulging confidential (if not material nonpublic) information, and Gupta asking Rajaratnam for career advice. (“I wanted to get your straight opinion on whether you think I should do this KKR thing.”)
- fragmentation In another tape, Anil Kumar asks Rajaratnam, "It’s now reached a point where it’s physically and humanly impossible to do the things he’s doing, right?" and the two wonder about Gupta's "fragmented" state. In another wiretap, Rajaratnam suggests to Kumar that Gupta "seemed tormented" at their last meeting.
As the tapes were released McKinsey was holding its regular annual partners conference, and according to a spokeswoman was "monitoring the matter and taking it seriously as you would expect.” They later released a statement saying they were "appalled and deeply dismayed." The firm has come under heavy criticism for having its former longtime senior partners and leaders (Gupta and Kumar) as well as a junior partner (Palecek) all involved in the insider trading scandal.
On March 23, 2011 Goldman Sachs CEO Lloyd Blankfein
Lloyd Blankfein
Lloyd Craig Blankfein is an American business executive. He is currently the CEO and Chairman of Goldman Sachs. He has been in this position since the May 31, 2006 nomination of former CEO Henry Paulson as Secretary of the Treasury under George W...
testified that Gupta had in fact divulged board-privileged material to Rajaratnam, though the particular information was allegedly confidential and not material nonpublic (the legal standard for insider trading).
Gupta v. SEC counter suit
On March 18, 2011 Gupta countersued the SEC (SDNY 11 Cv. 1900). The court filing read, "Mr. Gupta denies all allegations of wrongdoing and stands ready to mount a defense against each and every one of the Commission's charges. Yet under current Commission rules, Mr. Gupta would be deprived of a jury trial, the right to use the discovery procedures of the federal court to shape his defense and the protections of the federal rules of evidence, which were crafted to bar unreliable evidence." The countersuit said the SEC action "'unfairly and unconstitutionally' singles him out,” as he is to date the only person not employed by a broker-dealer ever charged by the SEC in administrative proceedings. It is not known whether the provisions of Dodd-Frank (the law allowing for SEC administrative proceedings in this instance) may be applied retroactively to before the law’s existence, as the SEC has claimed in charging Gupta.
In July 2011, Judge Rakoff refused to throw out the countersuit against the SEC and in August, Gupta and the SEC agreed to drop their respective actions against each other. The judge had drawn attention to the fact that all 28 other SEC actions stemming from the Galleon case had been filed in federal court. As part of the August agreement, the SEC agreed to file any future charges against Gupta in federal court in New York where it would be assigned to Rakoff. There was no comment on whether such charges would be filed.
Mercer v. Gupta shareholder suit
Just over three months after the SEC allegations of insider trading, Goldman Sachs shareholder James Mercer filed suit against Gupta "seeking to recover any 'short-swing' profits on Goldman's behalf."
US v. Gupta criminal suit
In late September, 2011, The Wall Street Journal reported that federal prosecutors were "fully committed" to filing criminal charges and were "moving closer toward bringing" them. They had previously sparred over how, when, and whether to arrest or sue Gupta, in "a bitter dispute between federal prosecutors and securities regulators."
On October 26, 2011 the United States Attorney's Office filed charges against Gupta. He was arrested in New York City by the FBI and pleaded not guilty. He was released on $10 million bail (secured by his Connecticut house) on the same day. Gupta's lawyer wrote in an e-mail quoted in Bloomberg, “Any allegation that Rajat Gupta engaged in any unlawful conduct is totally baseless .... He did not trade in any securities, did not tip Mr. Rajaratnam so he could trade, and did not share in any profits as part of any quid pro quo.”
Former Federal prosecutor Douglas Burns, who in March had said he expected an SEC-Gupta consent agreement
Consent decree
A consent decree is a final, binding judicial decree or judgment memorializing a voluntary agreement between parties to a suit in return for withdrawal of a criminal charge or an end to a civil litigation...
, also previewed a Gupta no-quid pro quo
Quid pro quo
Quid pro quo most often means a more-or-less equal exchange or substitution of goods or services. English speakers often use the term to mean "a favour for a favour" and the phrases with almost identical meaning include: "give and take", "tit for tat", "this for that", and "you scratch my back,...
defense plan on Bloomberg the day of the arrest.
Three days before Gupta's arrest, Rajaratnam was reported to have said that the prosecutors had wanted him to wear a wire and tape his conversations with Gupta. "It was Rajaratnam’s understanding that were he to plead guilty and wear a wire, he might be offered a sentence of as little as five years. With good behavior, he could be out in 85 percent of that time," the report continued. Rajaratnam did not — and has not ever, at time of writing — cooperated with federal prosecutors. He has been sentenced to 11 years in prison.
SEC v. Gupta civil suit
The same day as US v. Gupta, the SEC sued Gupta again (this time not in an administrative proceeding) over civil claims related to the criminal charges in US v. Gupta.
Relationships with Rajaratnam and Kumar
Rajat Gupta and Anil KumarAnil Kumar
Anil Kumar is a male discus thrower from India. His personal best throw is 64.37 metres, achieved in July 2007 in Szombathely....
were senior partners together at McKinsey & Company
McKinsey & Company
McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions...
for over a decade, among the earliest and best-regarded Indian-Americans in management consulting. They became friends and enjoyed a mentor-protégé relationship early into Kumar's career as senior partner. The two men co-founded the Indian School of Business
Indian School of Business
The Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
in 1997 and "were the face of McKinsey in India."
According to The Financial Times
Financial Times
The Financial Times is an international business newspaper. It is a morning daily newspaper published in London and printed in 24 cities around the world. Its primary rival is the Wall Street Journal, published in New York City....
, "the two operated as a forceful double-act to secure business for McKinsey, win access in Washington and build a brotherhood of donors around the Hyderabad-based ISB and a handful of social initiatives."
Gupta first met Raj Rajaratnam while fundraising with Kumar for the Indian School of Business in 1999. Rajaratnam and Kumar had attended Wharton business school
Wharton School of the University of Pennsylvania
The Wharton School is the business school of the University of Pennsylvania, an Ivy League university in Philadelphia, Pennsylvania. Wharton was the world’s first collegiate business school and the first business school in the United States...
together in the 1980s. Two years later Gupta and Rajaratnam served together on the board of directors of the American India Foundation
American India Foundation
The American India Foundation is a nonprofit American organization that is devoted to accelerating social and economic change in India...
.
In 1999 Rajaratnam filed a lawsuit against the Gupta-advised TeleSoft partners and its founder Arjun Gupta
Arjun Gupta
Arjun Gupta is the Founder and Managing Director of TeleSoft Partners, a special situations venture capital firm founded in 1996. TeleSoft provides value added capital for Technology, Communications companies and companies in the Energy Value Chain...
(no relation), a former McKinsey consultant himself.
Gupta, Rajaratnam, and Kumar were all involved to varying degrees in the creation of private-equity firms Taj Capital and New Silk Route
New Silk Route
- History and leadership :NSR was initially named Taj Capital. Its founding team included, at various points:* Rajat Gupta, former managing partner at McKinsey & Company* Parag Saxena, former managing partner of Invesco Capital and Vedanta Capital...
. Gupta had written Rajaratnam's home address as his own in the fund formation papers. Rajaratnam and Kumar were founding partners of the private-equity firms but left before they began operation. Kumar testified that he was "treated...poorly" by his friends in the formation of the firms. Gupta remained founding partner and chairman of New Silk Route, and Rajaratnam eventually invested $50 million in New Silk Route.
While they were both senior partners, Gupta and Kumar "created a company called Mindspirit LLC in 2001 as a vehicle for their two families to make investments." Mindspirit consulted with Infogroup and its then-CEO Vinod Gupta
Vinod Gupta
Vinod Gupta is the former Chief Executive Officer and Chairman of infoGROUP . Mr. Gupta served as CEO of the company from the time of its incorporation in 1972 until September 1997 and from August 1998 to August 2008...
(also no relation) in return for stock options, though an Infogroup SEC filing would later question the payment and the business relationship between the two companies. Vinod Gupta would also say that Mindspirit was "created by the wives of Rajat Gupta and Anil Kumar." Rajat Gupta and Anil Kumar's work at Mindspirit and the relationship with Genpact both broke McKinsey's own rules (in spirit, though perhaps not technically) on external for-profit involvements, according to McKinsey's head of communications. Former President Bill Clinton
Bill Clinton
William Jefferson "Bill" Clinton is an American politician who served as the 42nd President of the United States from 1993 to 2001. Inaugurated at age 46, he was the third-youngest president. He took office at the end of the Cold War, and was the first president of the baby boomer generation...
was also an investor in the Infogroup transaction; his daughter Chelsea
Chelsea Clinton
Chelsea Victoria Clinton is a television journalist, currently serving as Special Correspondent for NBC News, and philanthropist, working through the Clinton Global Initiative. She is the only child of former U.S...
previously worked under Gupta and Kumar at McKinsey. Clinton had also served as chairman of the American India Foundation with Gupta and Rajaratnam.
During the dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
of the late 1990s, Gupta and Kumar had created a program to allow McKinsey to accept stock in lieu of consulting fees.
Rajaratnam intended to make Gupta chairman of "Galleon International," an expansion of the Galleon Group
Galleon Group
Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009. The firm was at the center of a 2009 insider trading scandal that resulted in investors pulling capital from the firm rapidly...
. Rajaratnam considered paying Gupta "with a large stake in the fund."
Gupta was "a regular presence at Galleon’s offices ... and showed up there periodically for lunch. Mr. Rajaratnam’s secretary would order in Indian or Chinese food and the two men would sit in Mr. Rajaratnam’s office and chat." Gupta visited Rajaratnam "biweekly" in September 2008 during the financial crisis.
Rajaratnam and Kumar vacationed together in Kenya, Africa and Miami, Florida. Kumar was a regular visitor to Gupta's houses in Connecticut, Colorado, Manhattan and Florida. Gupta was "regularly invited" to Rajaratnam's house in Manhattan and for Galleon parties.
Gupta and Rajaratnam were also connected through Goldman Sachs
Goldman Sachs
The Goldman Sachs Group, Inc. is an American multinational bulge bracket investment banking and securities firm that engages in global investment banking, securities, investment management, and other financial services primarily with institutional clients...
. From 2006 - 2010 Gupta served on the board of the bank, by which point Rajaratnam's Galleon Group "paid hundreds of millions of dollars a year to its Wall Street banks and in return regularly received market information that would not have been disclosed to most investors." Gupta and Rajaratnam also used their Goldman Sachs relationships to market New Silk Route.
Gupta and Kumar both personally invested in Rajaratnam's Galleon funds, though Gupta lost a $10 million investment in Galleon's Voyager fund. Rajaratnam also "loaned Mr Gupta money so he could increase his investment in a Galleon fund."
Gupta knew that Rajaratnam was sending money to Kumar against McKinsey policies and possibly illegally.
The three men were also not above gossip: Rajaratnam said Gupta "seemed tormented" while on the phone with Kumar, then turned around and called Kumar a "mini-Rajat" while on the phone with Gupta. Rajaratnam also told Kumar that "there had been a lot of innuendos" about Gupta and Lata Krishnan, with whom Gupta had co-founded the American India Foundation.
Movie adaptation
108 Production announced a film entitled "Billion Dollar Raja" inspired by the Galleon insider trading investigation. The film was described as "an investigative financial mafia drama inspired by the true story of Galleon Group founder Mr. Raj Rajaratnam, his network of Wall Street honchos, big corporate insiders, employees and a prosecution team determined to punish those involved in the most complex insider trading case in history through secret wire-tap recordings." The film will be written and directed by Nayan PadraiNayan Padrai
Nayan Padrai is an award-winning screenwriter, producer, and director. Nayan co-wrote, produced, and directed his first feature film When Harry Tries to Marry released in the US on April 22, 2011...
and produced by Sheetal Vyas
Sheetal Vyas
Sheetal Vyas is a film producer.Sheetal produced her first feature film When Harry Tries to Marry released in the US on April 22, 2011. She also produced the film’s soundtrack.-Early life:...
.
List of professional affiliations
Source: various official biographies May be incomplete and quite likely out-of-date- Chairman of New Silk RouteNew Silk Route- History and leadership :NSR was initially named Taj Capital. Its founding team included, at various points:* Rajat Gupta, former managing partner at McKinsey & Company* Parag Saxena, former managing partner of Invesco Capital and Vedanta Capital...
partners (on leave) - Former chairman of the Board of the Indian School of BusinessIndian School of BusinessThe Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
- Chairman of the Board of Associates of the Harvard Business SchoolHarvard Business SchoolHarvard Business School is the graduate business school of Harvard University in Boston, Massachusetts, United States and is widely recognized as one of the top business schools in the world. The school offers the world's largest full-time MBA program, doctoral programs, and many executive...
- Co-Chair of the American India FoundationAmerican India FoundationThe American India Foundation is a nonprofit American organization that is devoted to accelerating social and economic change in India...
(AIF) - Co-Chair of the United NationsUnited NationsThe United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
Association of America - Former Chair of the IITIndian Institutes of TechnologyThe Indian Institutes of Technology are a group of autonomous engineering and technology-oriented institutes of higher education. The IITs are governed by the Institutes of Technology Act, 1961 which has declared them as “institutions of national importance”, and lays down their powers, duties,...
Alumni Association - Former chairman of the Advisory Board of The Gates FoundationBill & Melinda Gates FoundationThe Bill & Melinda Gates Foundation is the largest transparently operated private foundation in the world, founded by Bill and Melinda Gates. It is "driven by the interests and passions of the Gates family"...
- Former chairman of the India AIDS Initiative of The Gates FoundationBill & Melinda Gates FoundationThe Bill & Melinda Gates Foundation is the largest transparently operated private foundation in the world, founded by Bill and Melinda Gates. It is "driven by the interests and passions of the Gates family"...
- Former chairman of the Global Fund for AIDS, Malaria, and TuberculosisThe Global Fund to Fight AIDS, Tuberculosis and MalariaThe Global Fund to Fight AIDS, Tuberculosis and Malaria is an international financing organization that aims to "[a]ttract and disburse additional resources to prevent and treat HIV and AIDS, tuberculosis and malaria." A public–private partnership, the organization has its secretariat in Geneva,...
- Former chairman of the International Chamber of CommerceInternational Chamber of CommerceThe International Chamber of Commerce is the largest, most representative business organization in the world. Its hundreds of thousands of member companies in over 130 countries have interests spanning every sector of private enterprise....
- Former chairman-elect, Galleon GroupGalleon GroupGalleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009. The firm was at the center of a 2009 insider trading scandal that resulted in investors pulling capital from the firm rapidly...
International
- Former chairman of the Board, Genpact Limited
- Former member of the Board, AMR Corporation and American Airlines Inc. subsidiary
- Member of the Board, Sberbank
- Former member of the Board, Harman International.
- Former member of the Board, Goldman Sachs
- Former member of the Board, Procter and Gamble
- Former senior advisor, Kohlberg Kravis Roberts
- Senior advisor, TeleSoft VC partners
- Advisor, Novitaz, Inc.
- Advisor, OmniCapital Group LLC
- Chairman of the advisory board, Clutch Group LLC
- Advisory board, Fjord Capital Partners Ltd
- Advisory board, Symphony Technology Group
- Former member, Board of Trustees, University of ChicagoUniversity of ChicagoThe University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...
- Member, YaleYALERapidMiner, formerly YALE , is an environment for machine learning, data mining, text mining, predictive analytics, and business analytics. It is used for research, education, training, rapid prototyping, application development, and industrial applications...
President’s Council - Advisory Board, Kellogg School of ManagementKellogg School of ManagementThe Kellogg School of Management is the business school of Northwestern University in Evanston, Illinois, downtown Chicago, Illinois and Miami, Florida. Kellogg offers full-time, part-time, and executive programs, as well as partnering programs with schools in China, India, Hong Kong, Israel,...
- Dean’s Advisory Council, Massachusetts Institute of Technology Sloan School of ManagementMIT Sloan School of ManagementThe MIT Sloan School of Management is the business school of the Massachusetts Institute of Technology, in Cambridge, Massachusetts....
- Dean’s Advisory Board, School of Economics and Management, Tsinghua UniversityTsinghua UniversityTsinghua University , colloquially known in Chinese as Qinghua, is a university in Beijing, China. The school is one of the nine universities of the C9 League. It was established in 1911 under the name "Tsinghua Xuetang" or "Tsinghua College" and was renamed the "Tsinghua School" one year later...
- Board of Governors of the Lauder Institute of Management & International StudiesLauder InstituteThe Joseph H. Lauder Institute of Management & International Studies is part of a dual degree program at the University of Pennsylvania, combining an MA in International Studies from the School of Arts & Sciences with an MBA from The Wharton School or JD from the Law School...
, The Wharton School, University of Pennsylvania
- Board of Overseers of the Weill Cornell Medical College
- Board of the Global Health CouncilGlobal Health CouncilThe Global Health Council is a United States-based non-profit networking organizing linking "several hundred health non-governmental organizations around the world to share knowledge and resources, build partnerships and together become stronger advocates for health"...
- Dean’s Council, Harvard School of Public HealthHarvard School of Public HealthThe Harvard School of Public Health is one of the professional graduate schools of Harvard University, located in the Longwood Area of the Boston, Massachusetts neighborhood of Mission Hill, which is next to Harvard Medical School. HSPH is considered a significant school focusing on health in the...
- United NationsUnited NationsThe United Nations is an international organization whose stated aims are facilitating cooperation in international law, international security, economic development, social progress, human rights, and achievement of world peace...
Commission on the Private Sector and Development
- Member of the Board, Qatar Financial CentreQatar Financial CentreEstablished in March 2005, The Qatar Financial Centre is a business and financial centre located in Doha, providing legal and business infrastructure for financial services...
- Member, American Academy of Arts and SciencesAmerican Academy of Arts and SciencesThe American Academy of Arts and Sciences is an independent policy research center that conducts multidisciplinary studies of complex and emerging problems. The Academy’s elected members are leaders in the academic disciplines, the arts, business, and public affairs.James Bowdoin, John Adams, and...
- Former trustee, Rockefeller Foundation
- Board of Pratham India Education Initiative
- Foundation Board Member of the World Economic ForumWorld Economic ForumThe World Economic Forum is a Swiss non-profit foundation, based in Cologny, Geneva, best known for its annual meeting in Davos, a mountain resort in Graubünden, in the eastern Alps region of Switzerland....
- Board of the Millennium Promise
- Board of the International Partnership for Microbicides (IPM)
- Chairman of the Public Health Foundation of India (PHFI)
- Director, Emergency Management and Research Institute
Personal life
Rajat Gupta married Anita Mattoo, two years his junior, in 1973 after they had met at IIT. She was an electrical engineer, and according to him "a much smarter student" than himself. The couple met at college debates and plays. Mattoo came from SrinagarSrinagar
Srinagar is the summer seasonal capital of Jammu and Kashmir. It is situated in Kashmir Valley and lies on the banks of the Jhelum River, a tributary of the Indus. It is one of the largest cities in India not to have a Hindu majority. The city is famous for its gardens, lakes and houseboats...
, Kashmir
Kashmir
Kashmir is the northwestern region of the Indian subcontinent. Until the mid-19th century, the term Kashmir geographically denoted only the valley between the Great Himalayas and the Pir Panjal mountain range...
, India
India
India , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
.
Gupta owns several properties that he uses for both work and pleasure:
- His primary residence is a two-acre estate in Westport, ConnecticutWestport, Connecticut-Neighborhoods:* Saugatuck – around the Westport railroad station near the southwestern corner of the town – a built-up area with some restaurants, stores and offices....
that formerly belonged to JC Penney and his family, which was recently valued at $13 million. - He owns a $4 million waterfront home on the Gulf of Mexico in Palm Island, Florida.
- He owns an apartment in Manhattan.
- He owns a ranch in Colorado.
According to the Economic Times, "His big mansion in Connecticut is like a public dharamsala
Dharamshalas
Dharamshalas is the term for a religious resthouse. In Hindi, Dharma means religion, and shala means "sanctuary" hence dharamshala is a 'religious sanctuary' or rest-house for pilgrims, that are primarily created for a religious purpose for pilgrims, or as a religious endowment.Sometimes they are...
, where friends, professors and McKinsey colleagues are encouraged to come and live, often with their families. He is also known to ask colleagues to take a break at his Colorado ranch with their families - something unheard of in the McKinsey world at that time."
Gupta has four daughters: Geetanjali Gupta-Nwanze, Megha, Aditi and Deepali. In 2008, Geetanjali Gupta married Chukwuemeka Nwanze, an Igbo
Igbo people
Igbo people, also referred to as the Ibo, Ebo, Eboans or Heebo are an ethnic group living chiefly in southeastern Nigeria. They speak Igbo, which includes various Igboid languages and dialects; today, a majority of them speak English alongside Igbo as a result of British colonialism...
from Asaba, Nigeria
Asaba, Nigeria
Asaba is the capital of Nigeria's Delta State, and has an estimated population of 149,603 .- Etymology :Ahaba in Igbo is from 'Ahabagom', meaning I have chosen well, a quote from the founding father of Asaba.- Geography :...
, son of Vincent Nwanze, former Deputy Consul-General at the Nigerian Consulate in New York. The wedding was held at Rajat Gupta's house in Westport, Connecticut
Westport, Connecticut
-Neighborhoods:* Saugatuck – around the Westport railroad station near the southwestern corner of the town – a built-up area with some restaurants, stores and offices....
. Geetanjali was reported to be a Harvard BA, MBA and JD as well as a manager of the Harvard endowment fund
Harvard Management Company
Harvard Management Company or HMC is an American investment management corporation wholly owned subsidiary of Harvard University, charged with managing the university's endowment, pension assets, working capital, and non-cash gifts...
. Emeka is a Harvard BA and Yale MBA and MD specializing in ophthalmology.
External links
- "This boss is never shy of making unpopular moves", The Economic TimesThe Economic TimesThe Economic Times is an English-language Indian daily newspaper published by the Bennett, Coleman & Co. Ltd.. The Economic Times was started in 1961. It is the most popular and widely read financial daily in India, read by more than 8 lakh people...
, 24 October 2007 02.46PM IST, TNN. - Sreenivasan, SreenathSreenath SreenivasanSreenath Sreenivasan – also known as Sree Sreenivasan – is an academic administrator, professor and technology journalist based in New York City....
, "The Superboss", Business Today cover story, April 22, 1994; 'Rajat Is The Firm's Future' interview with Tom Peters; "McKinsey's Indian Connection" by George Skaria; and Factfile: Rajat Kumar Gupta; in same issue. - Remarks by Bill Gates at the India Institute of Technology 50th Anniversary Celebration Cupertino, California, January 17, 2003 - Moderated by Rajat Gupta.
- Gupta, Rajat, "Strength of a Nation", article about public health in MintMint (newspaper)Mint is a business newspaper from HT Media Ltd, launched in collaboration with The Wall Street Journal on 1 February 2007. It is a premium business news publication aimed at decision makers and policy makers of the country and it is the first newspaper in India to be published in the Berliner...
, an Indian newspaper affiliated with The Wall Street JournalThe Wall Street JournalThe Wall Street Journal is an American English-language international daily newspaper. It is published in New York City by Dow Jones & Company, a division of News Corporation, along with the Asian and European editions of the Journal....
, February 16, 2007 2:46 PM IST. - Gupta, Rajat, "Essential principles for successful philanthropy", Mint, March 6 2011 9:41 PM IST.
- "David Rockefeller, Jr., Ann Fudge and Rajat Gupta to join the Rockefeller Foundation Board of Trustees", foundation press release, October 17, 2006.
- "Summer News update", University of Chicago Chronicle, September 28, 1995. R. Gupta appointed to the Board of Trustees.
- The Global Fund: To Fight AIDS, Tuberculosis and Malaria: A brief biography; webpage no longer active 2011-06-02.
- http://www.mckinsey.com/ideas/wef2004/biographies/rajat.asp McKinsey: Brief biography. Webpage no longer active 2011-06-02. Referred to http://www.mckinsey.com/NotFound.aspx?item=%2fideas%2fwef2004%2fbiographies%2frajat&user=extranet\Anonymous&site=website.
- "Desi spotting: Rajat Gupta named chair of major global health org, SAJASouth Asian Journalists AssociationThe South Asian Journalists Association was founded in 1994 in New York City. South Asia refers to India, Pakistan, Sri Lanka, the Maldives, Bangladesh and Nepal. The current president is Jigar Mehta, Previously a Video Journalist for the New York Times.SAJA celebrates its 15th anniversary July...
forum.org, April 26, 2007. DesiDesiDesi or Deshi refers to the people, cultures, and products of the Indian subcontinent and, increasingly, to the people, cultures, and products of their diaspora. Desi countries include India, Pakistan, Bangladesh...
refers to Indian subcontinent and diaspora. - Coverage of World Malaria Day and a video (SAJAforum.org)
- New Silk Route bio
- Qatar Financial Center
- Lemann, NicholasNicholas LemannNicholas Berthelot Lemann is dean and Henry R. Luce professor at the Columbia University Graduate School of Journalism in New York City.Lemann is from New Orleans and he graduated from Harvard University in 1976, but has never attended a school of journalism. He is a journalist, editor, and author...
, "The Kids in the Conference Room: How McKinsey became the next big step",The New YorkerThe New YorkerThe New Yorker is an American magazine of reportage, commentary, criticism, essays, fiction, satire, cartoons and poetry published by Condé Nast...
, pp. 215, 216; October 18, 1999. Comments by R.Gupta, as head of firm, about global recruiting challenges, via Felix SalmonFelix SalmonFelix Salmon is a financial journalist, formerly of Portfolio Magazine and Euromoney, and a blogging editor for Reuters. He was also author of a Wired cover story on the Gaussian copula....
2011-05-23.