Indo American News
Friday, May 27 2011 | Vol. 30, No. 21 Published weekly from Houston, TX
Just $1
www.indoamerican-news.com
Partnered & Syndicated with Times of India, Sulekha.com, Google, Yahoo & Bing
Pg 6
Indo American News Takes Green Initiatives
This Week
Inside
Baylor Spreads its Horizons with Max Hospital Pg 5
From Kolkata’s lower-middleclass to Harvard Business School to the head of international consulting firm McKinsey, Rajat Gupta’s ascendancy in global business was a feat of smarts and determination.
“You can never underestimate the seductive power of three or more zeroes added to net-worth numbers,” Connelly told Bloomberg. “You can be successful, but if you’re in hedge fund managers’ circles and you’re not rich like them, you can start asking, ‘Why can’t I get that? I’m every bit as smart.’”
The Rise and Fall of
1.5M Wrongful New York City Pg 10
Chicago Trial Headley Nails ISI
Pg 29
Rajat Gupta
By Bernice yeung NEW YORK (Bloomberg): But oh, how the mighty have fallen! The philanthropist who has raised millions for Indian education and healthcare charities, is now facing a civil case brought by the U.S. Securities and Exchange Commission for passing confidential information to Raj Rajaratnam, the disgraced Galleon hedge fund billionaire convicted of insider trading earlier this month. (Gupta’s SEC hearing will take place in July, and he could face a monetary fine and could potentially be barred from serving on the boards of public companies.) And what’s more, according to Bloomberg, Gupta’s questionable business behaviour didn’t stop there. In direct violation of the consulting firm’s policies, Gupta secretly ran consulting businesses on the side—which often involving Indian companies—while still at the helm of McKinsey.
• Gupta and Anil Kumar (another Rajaratnam co-conspirator who pleaded guilty in the Galleon insider trading case) set up a consulting company in 2001 called Mindspirit LLC under their wives’ names. One of Mindspirit’s clients, database company InfoGroup, paid the consulting firm with 200,000 stock options, which was exercised for an undisclosed amount, according to SEC filings. •While on McKinsey’s payroll, Gupta also advised Genpact Ltd., a General Electric spinoff based in Gurgaon that manages business processes. Gupta served as an advisory director for Genpact from 2005 to 2007, and was granted more than 81,000 stock options, valued at 93 cents each in 2008. (SEC filings show that Gupta hasn’t yet exercised the options, which are currently trading at nearly $17 per share.) McKinsey has since conducted an internal investigation and has implemented stricter rules to
make it more difficult for these kinds of conflicts to occur in the future. Overcome by greed? What’s baffling is why Gupta, the brilliant businessman and regarded philanthropist, went so far astray. What happened to his moral compass? Bala Balachandran, dean of the Great Lakes Institute of Management in Chennai and a long-time friend, told Bloomberg that urgent desire to live a flashy lifestyle may have driven him to make questionable choices: “He wanted a billionaire’s life and the question for him was how could he become a billionaire in a short time,” Balachandran says. Meanwhile, Terry Connelly of the Ageno School of Business at Golden Gate University in San Francisco told Bloomberg that Gupta may have been motivated by a desire to keep up with the super-wealthy.
Indo AmerIcAn news • FrIdAy, A mAy Ay, A 27, 2011 • Online editiOn: Ay On: www.indOamerican-news.cOm O