Rajat Gupta: A Wall Street poster-boy, now embroiled in a scam

A native of Kolkata and an IITian, Gupta moved up the corporate ladder fast after graduating from the Harvard Business School. His record boasts of posts like head of consultancy giant McKinsey, board seats at Goldman Sachs and Procter and Gamble and special adviser to the United Nations, among other things.

Besides, he has also advised business leaders like General Electric's Jeffrey Immelt and Henry Kravis of the private equity firm Kohlberg Kravis Roberts & Company.

While there are quite a few persons of Indian origin who have successfully handled leadership positions at one or another large global company, Gupta figures among the very few who have occupied corner offices of various such entities.

The prosecutors have charged Gupta of being the "illegal eyes and ears" of Raj Rajaratnam, the hedge fund manager now under arrest for allegedly being the mastermind of the multi- billion dollar scam. The Sri Lankan has termed his friend as a "first-class guy".

Rajaratnam has said the US prosecutors pressed him to trap his friend by wiretapping a conversation with Gupta.

"They wanted me to plea bargain... They want to get Rajat. I am not going to do what people did to me. Rajat has four daughters," Rajaratnam said in an interview with the online newspaper the Daily Beast, while being under house arrest.

Back in India, Gupta figures among the very few people to have interviewed Prime Minister Manmohan Singh, more so among those from outside the media organisations.

Gupta's interview of Singh, which he conducted way back in 2005 as a McKinsey Director then, still figures as the only non-media interview among a total five listed on the Prime Minister's website.

Soon after he was accused in March this year of helping Rajaratnam, a number of Indian corporate leaders have stood up in his support and expressed the hope that he would emerge vindicated.

Gupta has been released on bail on a USD 10-million bond after he pleaded not guilty to offences that could keep him in jail for life.

He surrendered yesterday on the occasion of Diwali as he presumably felt it was auspicious to do so on the day of the festival of lights and "Gods will protect him".

"He believed it was auspicious to surrender on Diwali," the Wall Street Journal quoted the 62-year-old Gupta's childhood friend Anand Julka as saying.

Prosecutor Preet Bharara, also an Indian-American, has said that Gupta breached the trust of some of US's top public companies and "became the illegal eyes and ears in the boardroom for his friend and business associate, Raj Rajaratnam, who reaped enormous profits from Gupta's breach of duty".

At Rajaratnam's trial, the government had played a recorded conversation between Gupta and Rajaratnam in July, 2008 during which Gupta had divulged that Goldman was considering a purchase of either Wachovia or AIG.

Two most incriminating calls played in court pertained to tips that the government said had come from Gupta.

Around the time of his retirement in 2007 from McKinsey, Gupta and Rajaratnam helped start private equity firm New Silk Route which was focused on investments in India.
Gupta periodically visited Rajaratnam’s hedge fund Galleon in Midtown Manhattan.