Rajat Gupta facts for kids
Quick facts for kids
Rajat Gupta
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Gupta in 2010
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Rajat Kumar Gupta
December 2, 1948 |
| Nationality | American |
| Education | IIT Delhi (BTech) Harvard University (MBA) |
| Employer | McKinsey & Company |
| Title | Senior partner emeritus, former global managing director |
| Criminal charge(s) |
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| Criminal penalty |
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| Criminal status | Convicted |
| Spouse(s) | Anita Mattoo |
| Children | 4 |
Rajat Kumar Gupta (born 2 December 1948) is an Indian-American business leader. He became the first foreign-born head of the big consulting company McKinsey & Company. He led McKinsey from 1994 to 2003.
Later, in 2012, he was found guilty of sharing secret company information. This is called insider trading. He spent two years in prison for this. Gupta also served on the boards of major companies like Goldman Sachs and Procter & Gamble. He was also an advisor to important non-profit groups. These included the Bill & Melinda Gates Foundation. He also helped start the Indian School of Business.
Contents
Rajat Gupta's Early Life and School Days
Rajat Gupta was born in Calcutta, India. His father, Ashwini Gupta, was a journalist and professor. His mother, Pran Kumari, taught at a Montessori school. Rajat has three brothers and sisters.
When Rajat was five, his family moved to New Delhi. His father started a new newspaper there. Sadly, Rajat's father died when he was sixteen. His mother passed away two years later. Rajat and his siblings decided to live on their own. This was very unusual at the time.
He went to Modern School in New Delhi. After high school, he did very well on a tough entrance exam. He ranked 15th in the whole country for the Indian Institutes of Technology. In 1971, he earned a degree in Mechanical Engineering from IIT Delhi. He then went to Harvard Business School and got his MBA in 1973. He graduated with high honors.
Leading a Big Company: McKinsey & Company
Rajat Gupta joined McKinsey & Company in 1973. McKinsey is a company that gives advice to other big businesses. He was one of the first people of Indian descent to work there. At first, he was not accepted because he didn't have enough work experience. But his Harvard professor helped him get the job.
Gupta had mentors at McKinsey who guided him. He also helped other Indian-Americans join the company. He and another colleague, Anil Kumar, became important faces for McKinsey in India. They worked together to get new business and help social projects.
Becoming the First Non-American Leader
Gupta started his career in New York. In 1981, he moved to Scandinavia to lead McKinsey offices there. He did very well in this area. In 1984, he became a senior partner. In 1990, he led the Chicago office.
In 1994, he was chosen to be the first managing director of McKinsey. This meant he was the chief executive. He was re-elected twice, in 1997 and 2000. He was the first person born outside the US to lead such a big global company. During his time, McKinsey opened offices in 23 new countries. The number of consultants doubled. The company's income grew by 280 percent.
Challenges and Changes at McKinsey
However, Gupta's time as leader also had some challenges. When he joined, McKinsey was a smaller company with strict rules. But as he expanded the company, some felt its old principles were changing. A company called Enron, which McKinsey worked with, failed during his leadership. Also, during the "dot-com bubble," he allowed McKinsey to accept company stock as payment.
Some people thought Gupta was responsible for these changes. Others said his job was very hard, like trying to "herd cats." Gupta himself said it was like being a "servant-leader." After three terms, which was the maximum allowed, Gupta stepped down in 2003. He remained a senior partner.
After leaving his top role, Gupta reportedly felt some resentment about money. His friends in other industries were making huge amounts of money. He was still making millions, but it was less than his peers. McKinsey later ended its professional relationship with him after his legal issues.
Helping Others and Working with Other Companies
In 1997, Gupta helped start the Indian School of Business (ISB). He co-founded it with his friend Anil Kumar. This school became one of the top business schools in the world. Both Gupta and Kumar later resigned from their roles at the school.
Starting New Projects and Schools
Before leaving McKinsey, he also helped start Scandent Solutions and the American India Foundation. After McKinsey, Gupta co-founded a company called New Silk Route. This company invested in other businesses.
In 2005, Gupta, along with Raj Rajaratnam and Ravi Trehan, started Voyager Capital. Rajaratnam was a big investor who later invested $50 million in New Silk Route.
Joining Company Boards and Helping Charities
Gupta served on the boards of many large companies. He was on the board of Procter & Gamble from 2007 to 2011. He also served on the board of the investment bank Goldman Sachs from 2006 to 2010. He was the chairman of Genpact and served on the boards of American Airlines and Harman International. He also advised other financial groups.
Giving Back: Rajat Gupta's Philanthropy
Rajat Gupta spent a lot of time helping others. His charity work focused on education, global health, and international business.
He was involved with many universities and schools. He served on the boards of the University of Chicago and Yale University. He also helped lead the Indian Institute of Technology Alumni Association. He was chairman of the board for Harvard Business School. He also advised other top business schools like The Wharton School and MIT Sloan School of Management.
Gupta was a founding board member and chairman for The Global Fund to Fight AIDS, Tuberculosis and Malaria. This organization helps fight major diseases worldwide. He also helped start the Public Health Foundation of India. He was on the board of the Global Health Council. He also advised The Gates Foundation on global health.
He co-founded the American India Foundation (AIF). This is a large charity group focused on India, based in the US. He started it after an earthquake in India in 2001 to help victims. He also served as a trustee for the Rockefeller Foundation.
Gupta was also involved in global business efforts. He was chairman of the International Chamber of Commerce. He advised UN Secretary General Kofi Annan on management reform. He was also on the board of the World Economic Forum. He led the U.S.-India Business Council. He also advised the Indian Prime Minister.
Facing Consequences: Insider Trading Case
In 2009, Rajat Gupta was accused of sharing secret company information. This is called insider trading. He was accused of sharing secrets with Raj Rajaratnam, who ran a big investment fund. Another person, Anil Kumar, who was also a senior partner at McKinsey, had already admitted to similar charges. Gupta, Kumar, and Rajaratnam were all friends and business partners.
In 2010, criminal charges were filed against Gupta. He was arrested in New York City. He said he was not guilty. His lawyer stated that Gupta did not trade any securities himself. He also said Gupta did not share in any profits. However, prosecutors said the secret information led to over $23 million in illegal profits or avoided losses.
The Trial and Sentence
Gupta's trial began in May 2012. On June 15, 2012, he was found guilty on four charges related to sharing secret information. His lawyer said they would appeal the decision. The maximum sentence for these types of charges could be many years in prison. Prosecutors suggested up to 10 years in prison. The defense suggested probation and community service. They even suggested he could work on health care in Rwanda.
On October 24, 2012, Gupta was sentenced to two years in prison. He was also ordered to pay a $5 million fine. His conviction was confirmed by a higher court in March 2014. He began his prison sentence in June 2014. In January 2016, he was released from federal prison to house arrest. He was allowed to go to an office during weekdays. His house arrest ended in March 2016.
After Release
In March 2019, Rajat Gupta published his memoir, Mind Without Fear. In interviews, he shared his side of the story. He said he did not speak during his trial because his lawyers advised him not to. He also said that there was "no benefit, no establishment of criminal intent." He felt they "made up a case" and succeeded.
Personal Life
Rajat Gupta married Anita Mattoo in 1973. They met at IIT Delhi. Anita was an electrical engineer. Rajat said she was a "much smarter student" than him. They met at college debates and plays. Anita came from Srinagar, India. They have four daughters.
In 2008, Rajat Gupta's net worth was estimated to be around $84 million.
See also
- SEC v. Rajaratnam — also U.S. v. Rajaratnam
- Chip Skowron, hedge fund portfolio manager convicted of insider trading
- Mathew Martoma, hedge fund trader and portfolio manager convicted of insider trading
