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Anil Kumar

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Anil Kumar
Born1958
Alma materIIT Bombay, Imperial College London, The Wharton School
Occupation(s)Former senior partner and director at McKinsey & Company
Known forCo-founder of Indian School of Business; key cooperating witness in insider trading prosecutions involving Raj Rajaratnam and Rajat Gupta

Anil Kumar (born 1958) is a former senior partner and director at the management consulting firm McKinsey & Company, recognized as an Indian-American executive. He played a pivotal role in launching McKinsey’s operations in both Silicon Valley and India, and was instrumental in creating its Internet division, which at its height contributed about one-quarter of the company’s global revenue. Alongside Rajat Gupta, he co-founded the Indian School of Business and was a pioneer in developing two distinct outsourcing models. Kumar holds academic qualifications from IIT Bombay, Imperial College London, and The Wharton School.

In 2010, Kumar admitted guilt to charges of insider trading, becoming a crucial cooperating witness for the government in major securities fraud prosecutions involving billionaire hedge fund founder Raj Rajaratnam and former McKinsey managing director Rajat Gupta. Both Rajaratnam and Gupta were ultimately found guilty in these widely publicized trials. In 2012, Judge Denny Chin sentenced Kumar to two years probation in return for his cooperation, remarking that "greed was not the driving factor" and describing Kumar’s behavior as an "aberration" within an otherwise law-abiding professional history. Federal prosecutors praised him as "one of the best and most important cooperating witnesses" they had encountered.

A 2015 investigation uncovered that Kumar had illicitly transferred insider trading gains into offshore accounts opened under the name of his domestic employee, Manju Das, who was unaware of these accounts established using forged documentation. The inquiry also revealed that Kumar compensated Das below the minimum wage for several years, violating U.S. labor laws.

Early life and education

Kumar graduated at the top of his class from The Doon School and ranked among the nation’s top 100 candidates for admission to Indian Institute of Technology institutions. He earned a degree in mechanical engineering from IIT Bombay, placing third in his class with a thesis focused on renewable energy. Sponsored by De Beers Company, he pursued further studies at Imperial College within the University of London, completing a two-year applied mechanics program in just 10 months and graduating first in his cohort. Subsequently, Kumar attended the Wharton School at the University of Pennsylvania, where he developed a specialized curriculum concentrating on technology management and international business.

Career

Kumar was regarded as a "star senior partner" and one of McKinsey’s most accomplished leaders. He played a foundational role in establishing McKinsey’s offices in Silicon Valley and India, overseeing divisions focused on Internet companies—which at their peak contributed between 25% and 30% of McKinsey’s worldwide revenue—as well as outsourcing and intrapreneurship initiatives. As a mentee of former CEO Rajat Gupta, Kumar was held accountable for the failure of McKinsey's e-commerce ventures following the collapse of the dot-com bubble and chose not to pursue the managing partner position. Together with Gupta, he also co-founded the Indian School of Business located in Hyderabad, India.

McKinsey and Company

Kumar started his professional journey at Hewlett Packard as a product manager before joining McKinsey & Company in 1986, becoming one of the earliest Indian-American consultants at the firm. In 1988, he co-established McKinsey’s Silicon Valley office, growing its team from two to approximately 35 employees by 1992. By 1993, after becoming a partner, he launched McKinsey’s New Delhi office, which along with Mumbai marked the firm’s entry into India. There, he introduced innovative models such as Knowledge Process Outsourcing and Business Process Outsourcing, while serving as a protégé to then-managing director Rajat Gupta. Kumar later returned to lead McKinsey’s Internet practice during the dot-com boom—a division that eventually accounted for roughly 25-30% of firm revenues before declining post-bubble burst. Alongside Gupta, he briefly implemented a program permitting acceptance of stock as payment for consulting services. Kumar also held leadership roles including Chairman of McKinsey's Knowledge Center and Asia Center, as well as serving as director and corporate officer. His work took him across offices in New Delhi, New York, and Silicon Valley with frequent travel.

He was affiliated with organizations such as the Council on Foreign Relations and Young Presidents' Organization, was a founding charter member of TiE, and acted as U.S. chairman for India's largest business association, the Confederation of Indian Industry.

Critiques often centered on his close association with Gupta and perceived hubris. The Financial Times described their partnership as a "dynamic double-act" that secured business opportunities for McKinsey, facilitated access to Washington policymakers, and cultivated donor networks around Hyderabad-based ISB and social projects. Despite recognition for his business expertise, Kumar faced reproach for an allegedly arrogant demeanor.

Galleon investigation

Kumar kept a low profile outside of McKinsey until his arrest in October 2009, which occurred during an extensive US probe into insider trading.[1] His former mentor, Rajat Gupta, was subsequently detained in a connected case,[2] leading to increased examination of McKinsey's executive leadership and its operational framework.[3][4]

By December 2009, Kumar had officially departed from McKinsey.[5] In January 2010, he admitted guilt to insider trading allegations,[6] and later became the principal government witness during the March 2011 trial of billionaire and Galleon Group founder Raj Rajaratnam.[7][8] Kumar’s involvement was particularly significant; a Reuters blog highlighted that he was considered more professionally accomplished than Rajaratnam.[9] In May 2010, Kumar reached a settlement with the SEC for $2.8 million, reflecting profits obtained from Rajaratnam via a Swiss bank account.[10] Alongside Gupta and Rajaratnam, Kumar co-founded the $1.3-billion private equity firm New Silk Route, although both Rajaratnam and Kumar exited prior to its operational launch.[11]

Kumar was represented by Robert Morvillo,[12] who had previously defended billionaire Martha Stewart in an insider trading matter.[13][14] He again served as the government’s key witness during Gupta’s trial in May 2012,[15][16] elaborating on their closely connected relationships.[17] Federal prosecutors acknowledged the challenge posed by Kumar's close association with Gupta.[18]

Both Gupta and Rajaratnam were ultimately found guilty in separate prominent trials.

Kumar’s assistance to Rajaratnam has been widely examined by international media and financial analysts,[19][20][21][22] generating diverse views regarding his incentives involving financial gain, esteem, and personal connections. The New York Times raised questions about why individuals possessing wealth and status would jeopardize so much to supply insider information.[23] It was estimated that payments from Rajaratnam accounted for less than 5% of Kumar’s yearly earnings, further complicating the understanding of his motivations.[24] Prosecutors speculated on why a highly successful McKinsey senior partner engaged in philanthropy would compromise fundamental professional ethics.[25] Some outlets questioned aspects of Kumar’s sentencing report.[26] Judge Chin determined that greed was not the driving factor behind Kumar’s actions.[27]

Federal prosecutors described Kumar’s testimony as “devastating,” credible, accurate, and thoroughly supported by evidence.[28] In July 2012, he received a sentence of two years probation, concluding in July 2014.[27]

Education and Non-Profit Involvement

In 1997, Kumar partnered with Gupta to establish the Indian School of Business. Legal filings indicated that Kumar was responsible for securing approximately 35% of the school's total donations, while maintaining a discreet role as co-founder. It has been noted that much of the intellectual foundation behind ISB can be attributed to Kumar, a fact that remains largely unrecognized outside the institution's leadership circle.

In New Delhi, Kumar contributed to doubling the enrollment at IIT Delhi without raising expenses and was instrumental as a founding member of the Bharti Foundation's board. Meanwhile, in San Jose, he held board positions at both the Children's Discovery Museum and the San Jose Civic Light Opera.

By 2012, Kumar was engaged in partnerships with Baylor College of Medicine and Max Healthcare aimed at creating a medical university, a teaching hospital, and a nursing school in India. Additionally, he collaborated with the Hero Group to initiate an engineering college designed to accommodate 8,000 students.

Personal Background

Kumar preferred to keep a low public profile. Despite substantial earnings during his tenure at McKinsey, he maintained a modest lifestyle with assets exceeding his liabilities. Over several decades, he lived and worked across New Delhi, New York, and Silicon Valley, frequently traveling for McKinsey assignments. His real estate holdings included an apartment in Manhattan’s Time Warner Center and a residence in Saratoga, California. Kumar is married and has one son.

See also

  • Chip Skowron, hedge fund portfolio manager convicted of insider trading
  • Mathew Martoma, hedge fund trader and portfolio manager convicted of insider trading

Further reading

  • Vachani, Nilita. "The Strange True Story Of How A Chairman At McKinsey Made Millions Of Dollars Off His Maid." The Nation 9 November 2015
  • Raghavan, Anita. The Billionaire's Apprentice: The Rise of The Indian-American Elite and The Fall of The Galleon Hedge Fund. Hachette, June 2013.
  • Sharma, Amol and Joann Lublin. "A Star Partner's Galleon Arrest Shakes Up Ranks at McKinsey." The Wall Street Journal. 21 October 2009.
  • McDonald, Duff. "Galleon Scandal's Executive Conundrum." CNN. 23 October 2009.
  • McDonald, Duff. "Rajat Gupta: Touched By Scandal." CNN. 1 October 2010.
  • Duray, Dan. "Dealbook London Correspondent Scores Deal for Crisis Book." The New York Observer. 3 December 2010.
  • Lamont, James and Tom Burgis. "Elite Take Sides As Gupta Fights SEC Charges." The Financial Times. 8 March 2011.
  • Lattman, Peter. "On Tape, Galleon Founder Told of Possible Goldman Deals." The New York Times. 15 March 2011.
  • Lattman, Peter. "Rajat Gupta Charged with Insider Trading." The New York Times. 1 March 2011.
  • McCool, Grant and Dena Aubin. "McKinsey In Uncomfortable Rajaratnam Trial Glare." Reuters. 30 March 2011.
  • Rothfeld, Michael and Susan Pulliam. "Defense in Galleon Trial Bids to Discredit U.S.'s Star Witness." The Wall Street Journal. 16 March 2011
  • "Rajaratnam Lawyer, Key Witness Do Battle At Insider-Trading Trial." Financial Alternatives. 16 March 2011.
  • Raghavan, Anita. "Expert View On Galleon Insider Trading Trial." NDTV. 18 March 2011.
  • Van Voris, Bob, David Glovin and Patricia Hurtado. "Rajaratnam Lawyer Challenges Kumar’s Testimony on Insider Tips, Payments." Bloomberg. 16 March 2011.

External links

  1. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named nyt-arrest
  2. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named wsj-exgoldman
  3. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named ft-mckinseybad
  4. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named reuters-mckinseybad
  5. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named wsj-leavingmckinsey
  6. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named nyt-guiltyplea
  7. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named wsj-testimony
  8. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named wsj-rajGuilty
  9. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named reuters-insidertrading
  10. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named wsj-secsettlement
  11. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named ft-nsr
  12. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named sec-morvillo
  13. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named newyorker-marthastewart
  14. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named nyt-morvillo
  15. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named wsj-whoswho
  16. ↑ Chakraborty, Barnini. "Blankfein Takes Stand, Says Gupta Was at Key Meetings". Fox Business. 4 June 2012.
  17. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named bloomberg-presentence
  18. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named bloomberg-protege
  19. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named wsj-motives
  20. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named wsj-motives2
  21. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named ft-motives
  22. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named fiercefinanceblog-motives
  23. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named nyt-motives
  24. ↑ Calculation
  25. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named WSJ-india1
  26. ↑ Lua error in Module:Citation/CS1/Configuration at line 2123: attempt to index field '?' (a nil value).
  27. ↑ 27.0 27.1 Cite error: Invalid <ref> tag; no text was provided for refs named wsj-sentencing
  28. ↑ Cite error: Invalid <ref> tag; no text was provided for refs named sdny-5k
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