Rajat Gupta
Rajat Gupta at the World Economic Forum, Davos, 2010
Born	Rajat Kumar Gupta (1948-12-02) 2 December 1948 (age 63) Kolkata, West Bengal, India
Residence	Westport, CT, USA New York, NY, USA Colorado, USA Palm Island, FL, USA
Citizenship	United States
Alma mater	IIT Delhi Harvard Business School
Occupation	Consultant, Management expert
Years active	1973-2007
Employer	McKinsey & Company, Inc.
Net worth	$100 million+ [1]
Title	Senior Partner Emeritus and former Worldwide Managing Director
Term	1994-2003 (Managing director)
Predecessor	Fred Gluck
Successor	Ian Davis
Religion	Hindu[2]
Spouse	Anita Mattoo Gupta
Children	4

Rajat Kumar Gupta (RA-jat ku-MAAR GUP-ta; Bengali: রজত গুপ্ত; born 2 December 1948) is an Indian American businessman who 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 and is on criminal trial as of May 2012.

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.

Early life and education[link]

Rajat Gupta was born in Kolkata, 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."^[3]

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.^[4] Gupta remarked that the first time he saw an airplane was when he flew to ITC to inform them he would be attending HBS.^[3]

Career[link]

McKinsey & Company[link]

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 Daniel, then head of the New York office and later also the managing director of McKinsey, on Gupta's behalf.^[3]

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.^[5] 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.

During Gupta's time as head of McKinsey, the firm opened offices in 23 new countries and doubled its consultant base.^[6] His successor Ian Davis was elected by "emphasizing the need for a return to the McKinsey heritage".^[7] 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.^[8]

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.^[9] 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.^[3]

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.^[3] He, in turn, mentored Anil Kumar as another early Indian-American at the consultancy. Gupta and Kumar "were the face of McKinsey in India."^[10] 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." ^[10]

Gupta maintained an office, executive assistant, email and phone at McKinsey and Company after 2007,^[11] and maintains the title "senior partner emeritus" of the firm^[12] — 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."^[13] According to NDTV, "sources tell us that the firm dropped Mr Gupta from its alumni database, and called clients worldwide to say that they would have nothing to do with him going forward."^[14]

Outside McKinsey & Company[link]

In 1997 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".^[15] Gupta and Kumar have both since resigned as chairman and executive board director respectively.^[16][17]

Before stepping down as managing director he co-founded Scandent Solutions with Ramesh Vangal and the American India Foundation with Victor Menezes and Lata Krishnan. After McKinsey Gupta co-founded and chaired the private equity firm New Silk Route, formerly named Taj Capital Partners, with Parag Saxena and Victor Menezes.

He served on the corporate board of directors of Goldman Sachs, Proctor and Gamble, American Airlines parent AMR, Harman International, and Sberbank. He was also senior advisor to KKR (formerly Kohlberg, Kravis, Roberts & Co.), the chairman of Galleon International, and advisor to other financial institutions such as the Qatar Financial Centre.

Philanthropy[link]

Gupta’s philanthropic efforts focus on the areas of education, global health, and global business. His activities within the field of education include co-founding and chairing the Indian School of Business with Anil Kumar and serving on the Board of Directors of many business schools including Harvard Business School, Northwestern’s Kellogg School of Management, MIT Sloan School of Management, Tsinghua University School of Economics and Management, Skolkovo and the Lauder Institute at Wharton.^[18][19] In addition, he served on the Yale President's Council, founded and chaired the IIT Alumni Association, and was a member of the board of trustees of the University of Chicago. He was additionally on the board of Millennium Promise and the Pratham India Education Initiative.

Gupta’s activities in global health include serving as a founding Board member and then Chairman of the Board for The Global Fund to Fight AIDS, Tuberculosis and Malaria and as the co-founder and founding Chairman of the Public Health Foundation of India.^[20] He was also on the board of the Emergency Management and Research Institute, Health Management Research Institute, and International Partnership for Microbicides. He was also chairman of the advisory board and the India AIDS initiative of the The Gates Foundation as well as its Global Health Initiative. He was a member of the board of the Global Health Council and the Harvard School of Public Health, as well as the Weill Cornell Medical College.

Gupta is also a supporter of global business through his work as Chairman of the International Chamber of Commerce, a founding Board member of the World Economic Forum, a Board member and Executive Committee member of the US-India Business Council, and member of the Advisory Council to the Prime Minister of India.^[21]

Gupta was also appointed as special advisor on management reform to UN Secretary-General Kofi Annan.^[22] He additionally served on the UN Commission on the Private Sector and Development and was co-chairman of the United Nations Association of America.

In addition, Gupta was a trustee on the board of the Rockefeller Foundation^[18] and was elected in 2009 to the American Academy of Arts and Sciences.^[23]

Controversy[link]

McKinsey & Company[link]

The notion of company growth has been controversial from the 1970s as the firm began its global expansion; McKinsey opened many new offices under Rajat Gupta's tenure in the late 1990s. The election of British-born Ian Davis as Gupta's successor was seen as "a return to McKinsey's heritage".^[24]

Additionally, though a McKinsey spokesman said "It has always been a clear violation of our values and professional standards for any firm member to provide consulting or advisory services outside of McKinsey for personal monetary gain," Gupta "was an advisory director from 2005 to 2007, for which he was granted 81,405 stock options, valued at 93 cents each then, according to Genpact’s 2008 proxy statement."^[25] During this period, while an active senior partner at McKinsey, he also set up New Silk Route and worked with InfoUSA for Mindspirit.

Sberbank board seat[link]

Gupta was paid nearly five times as much as the next corporate director for his board seat at Sberbank, prompting a watchdog group to vote against his reelection.^[26]

Tamilnad Mercantile Bank[link]

India's Enforcement Directorate alleged in 2012 that Gupta violated India's Foreign Exchange Management Act in an attempted hostile takeover of the Tamilnad Mercantile Bank. According to The Economic Times, "Gupta and seven NRI investors led by Vangal picked up 24.93 per cent equity in TMBL with the clear understanding among themselves to acquire substantial TMBL shares and get representation on the bank’s board."^[27] Gupta and Vangal had previously co-founded Scandent Solutions.

Insider trading trial[link]

	Rajat Gupta and Raj Rajaratnam FBI wiretap on July 28, 2008 of McKinsey senior partner emeritus Rajat Gupta speaking to Galleon Group founder Raj Rajaratnam about Goldman Sachs, senior partner Anil Kumar, Galleon International and Kohlberg Kravis Roberts
Problems listening to this file? See media help.

On March 1, 2011, the SEC filed an administrative civil complaint against Gupta for insider trading with billionaire and Galleon Group founder Raj Rajaratnam. Coverage of the event noted that Anil Kumar — who, like Gupta, had graduated from IIT, was a highly regarded senior partner at McKinsey, and had also co-founded the Indian School of Business — had already pleaded guilty to charges in the same case.^[28] Gupta, Kumar, and Rajaratnam were all close friends and business partners. Gupta countersued and both sides eventually dropped.

On October 26, 2011 the United States Attorney's Office filed criminal charges against Gupta. He was arrested in New York City by the FBI and pleaded not guilty. He was released on $10 million bail on the same day. Gupta's lawyer wrote, “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.”^[29] The SEC alleged, "The tips generated 'illicit profits and loss avoidance' of more than $23 million." Manhattan U.S. Attorney Preet Bharara said, "Rajat Gupta was entrusted by some of the premier institutions of American business to sit inside their boardrooms, among their executives and directors, and receive their confidential information so that he could give advice and counsel."^[30]

In April 2012, another charge relating to passing P&G information was added by the prosecution. Gupta's lawyers countered that "newly added charges -- like the ones brought last year -- are not based on any direct evidence, but rely on supposed circumstantial evidence". More new charges based on new information may follow.^[31] The defense has maintained that "the wrong person is on trial".^[32]

In early May 2012, a pre-trial defense motion for access to SEC settlement-negotiation documents was denied by Judge Rakoff.^[33] Also in early May, the prosecution made a motion to play in trial three FBI wiretaps of two Rajaratnam "conversations with his principal trader and another with Galleon's then portfolio manager" related to the Goldman Sachs information.^[34] As well, details of wiretap recordings and trading activity related to the charges were analyzed at length in the media, assessing the strengths and weaknesses of the prosecution's and defense's cases.^[35][36][37]

The current case is focusing on the relationship between Raj Rajaratnam, Anil Kumar and Gupta.^[38] Gupta, Rajaratnam, and Kumar were all involved to varying degrees as founding partners of of private-equity firms Taj Capital and New Silk Route, though Rajaratnam and Kumar left before they began operation. Gupta remained as chairman of New Silk Route, and Rajaratnam eventually invested $50 million in the fund.^[39]

Rajat Gupta's trial began on 22 May 2012.

Personal life[link]

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.^[40] Mattoo came from Srinagar, Kashmir, India.

Gupta owns several properties that he uses for both work and pleasure:

• His primary residence is a two-acre estate in Westport, Connecticut that formerly belonged to JC Penney and his family, which was valued at $13 million as per town records of October 2011.^[30]
• He owns a $4 million waterfront home on the Gulf of Mexico in Palm Island, Florida.^[1]
• He owns an apartment in Manhattan.^[41]
• He owns a ranch in Colorado.^[3][42]

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."^[42]

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.^[43]

See also[link]

• Anil Kumar — in particular career
• Galleon insider trading case — in particular relationship with Rajaratnam and Gupta
• Indian School of Business — in particular history and formation
• McKinsey & Company, Inc. — in particular Notable employees and Galleon case
• New Silk Route — in particular history and formation
• Raj Rajaratnam — in particular conviction
• SEC v. Rajaratnam — also U.S. v. Rajaratnam

Appendix: Affiliation list[link]

Below is a list of his affilitaions. Source: various official biographies May be incomplete and quite likely out-of-date^{[44][45][46][47]}

Corporate[link]

• Senior partner emeritus, McKinsey & Company, Inc.

Former:

• Managing director (CEO), McKinsey & Company, Inc.
• Chairman of the Board, Genpact Limited
• Member of the Board, AMR Corporation and American Airlines Inc. subsidiary
• Member of the Board, Goldman Sachs
• Member of the Board, Harman International.
• Member of the Board, Procter and Gamble
• Member of the Board, Sberbank
• Co-Founder and Member of the Advisory Board, Symphony Technology Group

Financial[link]

Former:

• Co-Founder and Chairman, New Silk Route (NSR)
• Senior advisor, Kohlberg Kravis Roberts
• Chairman-elect, Galleon Group International

Status unknown:

• Member of the Board, Qatar Financial Centre
• Chairman of the Advisory Board, Clutch Group LLC
• Member of the Advisory board, Fjord Capital Partners Ltd
• Senior advisor, TeleSoft VC partners
• Advisor, Novitaz, Inc.
• Advisor, OmniCapital Group LLC

Education[link]

Universities[link]

Former:

• Member of the Board of Trustees, University of Chicago
• Member, Yale President’s Council
• Chairman, IIT Alumni Association^[48]

Business schools[link]

Former:

• Co-founder and Chairman of the Board, Indian School of Business
• Chairman of the Board of Associates, Harvard Business School
• Member of the Board of Governors, Lauder Institute of Management & International Studies, The Wharton School, University of Pennsylvania

Status unknown:

• Member of the Board, Skolkovo
• Member of the Advisory Board, Kellogg School of Management
• Member of the Dean’s Advisory Council, Massachusetts Institute of Technology Sloan School of Management
• Member of the Dean’s Advisory Board, School of Economics and Management, Tsinghua University

Medical schools[link]

Former:

• Member of the Board of Overseers, Weill Cornell Medical College

Status unknown:

• Member of the Dean’s Council, Harvard School of Public Health

Non-profits[link]

Former:

• Member of the Board, Pratham India Education Initiative
• Member of the Board, Millennium Promise

Global Health[link]

Former:

• Chairman, Global Fund for AIDS, Malaria, and Tuberculosis
• Chairman, Public Health Foundation of India (PHFI)
• Member of the Board, Emergency Management and Research Institute

Status unknown:

• Chairman of the India AIDS Initiative, The Gates Foundation
• Member of the Board, Global Health Council
• Member, United Nations Commission on the Private Sector and Development
• Member of the Board, International Partnership for Microbicides (IPM)
• Member of the Board, Health Management Research Institute

Other nonprofit[link]

• Member, American Academy of Arts and Sciences

Former:

• Chairman of the Advisory Board, The Gates Foundation
• Co-Chairman, United Nations Association of America

Status unknown:

• Co-Founder and Co-Chairman of the Board, American India Foundation (AIF)
• Trustee, Rockefeller Foundation

Global business[link]

Former:

• Chairman, International Chamber of Commerce
• Member of the Foundation Board, World Economic Forum
• Special Assistant to the Secretary General for Management Reform, United Nations
• Member of the Board, US-India Business Council
• Member, Advisory Council to the Prime Minister of India

References[link]

External links[link]

• "This boss is never shy of making unpopular moves", The Economic Times, 24 October 2007 02.46PM IST, TNN.
• Sreenivasan, Sreenath, "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 Mint, an Indian newspaper affiliated with The Wall Street 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 at website 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, SAJAforum.org, April 26, 2007. Desi refers to Indian subcontinent and diaspora.
• Coverage of World Malaria Day and a video (SAJAforum.org)
• New Silk Route bio
• Qatar Financial Center
• Lemann, Nicholas, "The Kids in the Conference Room: How McKinsey became the next big step",The New Yorker, pp. 215, 216; October 18, 1999. Comments by R.Gupta, as head of firm, about global recruiting challenges, via Felix Salmon 2011-05-23.
• "The High Cost of Insider Trading", NYTimes.com Dealbook blog. March 13, 2012.
• Bartlett, Christopher A., "McKinsey & Co.: Managing Knowledge and Learning" (for sale), Harvard Business Review Cases, June 28, 1996. "Describes the development of McKinsey & Co. as a worldwide management consulting firm from 1926 to 1996."