Under scanner Rajat Guptas’s wealth at trial

Rajat Gupta’s net worth at $84 million, a trust at $38 million and $11 million in cash, is under the lens of the jurisdiction. Gupta, currently, is on trial for benefitting from inside tips he provided to Raj Rajaratnam, the co-founder of the Galleon. Gupta, a former director of Goldman Sachs and Procter & Gamble, is on trial facing allegation that he revealed secret information about those two companies to Raj Rajaratnam, the Galleon co-founder who was found guilty.

Who is Rajat Gupta?

• Rajat Kumar Gupta, is an Indian American Businessman.  He was global head of McKinsey & Company, the management consulting firm from 1994 to 2003 and a business leader in India and the United States.
• After his rise in McKinsey, he was known as the “First India-born CEO of a global corporation”.
• Gupta also chaired as corporate chairman, board director or strategic advisor to a variety of large and notable organizations 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.

He co-founded 4 different organizations:

• Indian School of Business (ISB)
• American India Foundation
• New Silk Route
• Scandent

He served on board of directors of following academic institutions

• Harvard Business School
• Northwestern’s Kellogg School of Management
• MIT Sloan School of Management
• Tsinghua University School of Economics and Management
• Lauder Institute at Wharton

He also headed the following organizations:

• The Global Fund to Fight AIDS Tuberculosis and Malaria
• Public Health Foundation of India
• World Economic Forum

What is the controversy related to Rajat Gupta?

In 2007 when Gupta was serving as Director of Goldman Sachs, he leaked confidential information about the company’s investment plan and earning details, which are considered Non-Public information, to Raj Rajaratnam. He leaked the information of $ 5 billion investment which was to be made by Berkshire Hathaway into Goldman Sachs. Rajaratnam traded on the information and made profits. It is alleged that Gupta also had some vested interest in Rajaratnam company- Galleon and he also got some benefits through that trading which is considered as Insider Trading- a corporate crime. It is also alleged that Gupta passed on non- public info about Procter & Gamble to Rajaratnam where he leaked info about company’s sale of its assets worth $ 3 billion and about its quarterly earnings which were not made public.

Month: Current Affairs - June, 2012