Rajat Kumar Gupta was born in Kolkata, India to Pran Kumari Gupta and Ashwini Kumar Gupta. 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. 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,IIT JEE. He received a Bachelor of Technology degree in Mechanical Engineering from the Indian Institute of Technology, Delhi (IIT-Delhi) 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 began his career in New York before moving to Scandinavia to become the head of McKinsey offices 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 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 (not just a consultancy).
In 1997 Gupta co-founded the Indian School of Business (ISB) with friend and fellow senior partner Anil Kumar. Gupta has served on many corporate boards during his career. He became a member of the board of Procter & Gamble in 2007, and held that post until March of 2011. He was also a member of the board of investment firm Goldman Sachs from 2006 until the expiration of his term in 2010. Gupta was also the non-executive chairman of Genpact from 2007 until March 2011. He also served on the board of AMR, the parent company of American Airlines, from 2008 until 2011, and on the board of Harman International from 2009 to 2011. Gupta has also served on the board of Russian bank Sberbank, and as a managing advisor to Symphony Technology Group. Gupta has also served as a director of various financial groups. In addition to his work at Goldman Sachs, Gupta served as an advisory partner with Fjord Capital Parners and as chairman of the advisory board for Clutch Group. Gupta was also a member of the advisory board for OmniCapital Group.
In 1997 Gupta co-founded the Indian School of Business (ISB) with friend and fellow senior partner Anil Kumar. Gupta has served on many corporate boards during his career. He became a member of the board of Procter & Gamble in 2007, and held that post until March of 2011. He was also a member of the board of investment firm Goldman Sachs from 2006 until the expiration of his term in 2010. Gupta was also the non-executive chairman of Genpact from 2007 until March 2011. He also served on the board of AMR, the parent company of American Airlines, from 2008 until 2011, and on the board of Harman International from 2009 to 2011. Gupta has also served on the board of Russian bank Sberbank, and as a managing advisor to Symphony Technology Group. Gupta has also served as a director of various financial groups. In addition to his work at Goldman Sachs, Gupta served as an advisory partner with Fjord Capital Parners and as chairman of the advisory board for Clutch Group. Gupta was also a member of the advisory board for OmniCapital Group.
Insider Trading Conviction
Rajat Gupta, the former Goldman Sachs Director and McKinsey and Company Managing Partner convicted of supplying confidential information to jailed Galleon Group's billionaire hedge fund manager Raj Rajaratnam, received a two-year jail term from U.S. Judge Jed Rakoff, even as one of the most spectacular insider-trading cases on Wall Street since the financial crisis of 2008 drew to a climax. He was also ordered to pay a fine of $5 million.
In June 2012 a jury convicted Mr. Gupta on four criminal felony counts of conspiracy and securities fraud related to his passing on material non-public information on Goldman Sachs to Mr. Rajaratnam, who is himself currently serving out an 11-year jail term.The Sri Lankan-born Rajaratnam is accused of having netted $45 million in illicit profits from insider trading with the help of Gupta and others.
Charges against Gupta:
Gupta called Raj Rajaratnam soon after learning that Goldman Sachs had been handed a five billion dollar lifeline by Berkshire Hathaway.
Minutes before close of markets, Rajaratnam purchased 1,75,000 Goldman shares.
Rajaratnam sold them the next day for a profit of 900,000 dollars.
In June-July, the Goldman CEO had conveyed strong earnings growth of the company to Gupta.
Gupta is also accused of passing the information on to Rajaratnam, following which, Galleon fund bought 5500 contracts and 350,000 Goldman shares over two days.
Rajaratnam sold the contracts to make two million dollar after Goldman reported positive results.
Gupta then sold the shares for another 6.6 million dollar.
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.
Rajat Gupta was hailed for long as a poster-boy of Indians scaling great heights in corporate echelons abroad and his friends describe him as a God-fearing, 'first-class guy'.
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.Back in India, Gupta figures among the very few people to have interviewed Prime Minister Manmohan Singh, more so among those 5 from outside the media organisations.
Gupta's downfall is almost as remarkable as his rise. Born in Kolkata, he lost both his parents before he was 18. He earned a scholarship to study mechanical engineering at iit, Delhi, and boarded a plane for the first time en route to Harvard Business School to do an mba. He joined McKinsey after Harvard and rose rapidly through the ranks to become its chief executive. During his nine-year stint as head of McKinsey, the smooth and articulate Gupta, who likes to quote from the Gita in conversation, came to know most of the leading ceos of America on a first-name basis.
On October 24, 2012, Gupta was sentenced to two years in prison by Judge Rakoff of United States District Court in Manhattan handed for leaking boardroom secrets to former hedge fund manager Raj Rajaratnam. After the jail term, he will also be subject to one year of supervised release, after the jail term. Gupta took the sentencing impassively, showing no emotions. His family sitting behind the gallery also didn’t react much, unlike when he was held guilty in June.
While some raised eyebrows at the length of the prison term, Judge Rakoff said that Mr. Gupta was “a good man,” and that his court “has never encountered a defendant whose prior history suggests such an extraordinary devotion, not only to humanity writ large, but also to individual human beings in their times of need.” Yet he added, “But the history of this country and the history of the world is full of examples of good men who did bad things.”
Gupta, reading from a statement, said: "The last 18 months have been the most challenging period of my life since I lost my parents as a teenager." "I regret terribly the impact of this matter on my family, my friends and the institutions that are dear to me. I've lost my reputation I built for a lifetime. The verdict was devastating," he said.
Gupta had received over 400 letters of support that were sent to Rakoff, but in the end it was not enough to overcome the public’s demand, and the strong government position, that executives be held accountable for their actions (I’m sure we could come up with a long list of those who have not been). Even letters from former U.N. Secretary Kofi Annan and billionaire Bill Gates were not enough to convince Rakoff that probation would be sufficient enough of a punishment. The public weighed in on what they felt was a proper prison sentence with over half asking for a prison term of over 6 years in an unscientific poll at the NY Post.
In June 2012 a jury convicted Mr. Gupta on four criminal felony counts of conspiracy and securities fraud related to his passing on material non-public information on Goldman Sachs to Mr. Rajaratnam, who is himself currently serving out an 11-year jail term.The Sri Lankan-born Rajaratnam is accused of having netted $45 million in illicit profits from insider trading with the help of Gupta and others.
Charges against Gupta:
Gupta called Raj Rajaratnam soon after learning that Goldman Sachs had been handed a five billion dollar lifeline by Berkshire Hathaway.
Minutes before close of markets, Rajaratnam purchased 1,75,000 Goldman shares.
Rajaratnam sold them the next day for a profit of 900,000 dollars.
In June-July, the Goldman CEO had conveyed strong earnings growth of the company to Gupta.
Gupta is also accused of passing the information on to Rajaratnam, following which, Galleon fund bought 5500 contracts and 350,000 Goldman shares over two days.
Rajaratnam sold the contracts to make two million dollar after Goldman reported positive results.
Gupta then sold the shares for another 6.6 million dollar.
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.
Rajat Gupta was hailed for long as a poster-boy of Indians scaling great heights in corporate echelons abroad and his friends describe him as a God-fearing, 'first-class guy'.
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.Back in India, Gupta figures among the very few people to have interviewed Prime Minister Manmohan Singh, more so among those 5 from outside the media organisations.
Gupta's downfall is almost as remarkable as his rise. Born in Kolkata, he lost both his parents before he was 18. He earned a scholarship to study mechanical engineering at iit, Delhi, and boarded a plane for the first time en route to Harvard Business School to do an mba. He joined McKinsey after Harvard and rose rapidly through the ranks to become its chief executive. During his nine-year stint as head of McKinsey, the smooth and articulate Gupta, who likes to quote from the Gita in conversation, came to know most of the leading ceos of America on a first-name basis.
On October 24, 2012, Gupta was sentenced to two years in prison by Judge Rakoff of United States District Court in Manhattan handed for leaking boardroom secrets to former hedge fund manager Raj Rajaratnam. After the jail term, he will also be subject to one year of supervised release, after the jail term. Gupta took the sentencing impassively, showing no emotions. His family sitting behind the gallery also didn’t react much, unlike when he was held guilty in June.
While some raised eyebrows at the length of the prison term, Judge Rakoff said that Mr. Gupta was “a good man,” and that his court “has never encountered a defendant whose prior history suggests such an extraordinary devotion, not only to humanity writ large, but also to individual human beings in their times of need.” Yet he added, “But the history of this country and the history of the world is full of examples of good men who did bad things.”
Gupta, reading from a statement, said: "The last 18 months have been the most challenging period of my life since I lost my parents as a teenager." "I regret terribly the impact of this matter on my family, my friends and the institutions that are dear to me. I've lost my reputation I built for a lifetime. The verdict was devastating," he said.
Gupta had received over 400 letters of support that were sent to Rakoff, but in the end it was not enough to overcome the public’s demand, and the strong government position, that executives be held accountable for their actions (I’m sure we could come up with a long list of those who have not been). Even letters from former U.N. Secretary Kofi Annan and billionaire Bill Gates were not enough to convince Rakoff that probation would be sufficient enough of a punishment. The public weighed in on what they felt was a proper prison sentence with over half asking for a prison term of over 6 years in an unscientific poll at the NY Post.
References: Wikipedia; indiatoday.in; Wall Street Journal; forbes.com; Hindustantimes; The Hindu
Photos Courtesy: Google Images
Photos Courtesy: Google Images