Rajat Gupta

Rajat Kumar Gupta
Rajat Kumar Gupta
Born	December 2, 1948 (age 77); Calcutta, India
Occupation(s)	Business leader, management consultant
Years active	1973–2012
Known for	First foreign-born managing director of McKinsey & Company; board memberships at Goldman Sachs, Procter & Gamble, American Airlines; founder of Indian School of Business and American India Foundation; insider trading conviction

Rajat Kumar Gupta (born December 2, 1948) is an Indian-American business leader who made history as the first managing director (CEO) of McKinsey & Company to be born outside the United States, holding the position from 1994 until 2003. Throughout his career, he served on the boards of prominent corporations including Goldman Sachs, Procter & Gamble, and American Airlines. Additionally, Gupta provided strategic guidance to nonprofit organizations such as the Bill & Melinda Gates Foundation and The Global Fund to Fight AIDS, Tuberculosis and Malaria. He was instrumental in founding several institutions including the Indian School of Business, the American India Foundation, New Silk Route, and Scandent Solutions.

In 2012, Gupta was found guilty on four felony charges involving conspiracy and securities fraud connected to the Galleon Group insider trading case. He received a sentence of two years in prison, followed by one year of supervised release, alongside a $5 million fine. His conviction was affirmed by a Federal Appeals Court in March 2014 and subsequently by the U.S. Supreme Court in April 2015. After an unsuccessful attempt to remain free while awaiting Supreme Court review, he commenced his prison term in June 2014. Gupta was transitioned to house arrest under supervision in January 2016 and completed this phase in March 2016.

Early life and education

Rajat Gupta was born in Calcutta, India, to Ashwini Gupta, a Bengali Baidya journalist and former professor at Ripon College, and Pran Kumari, a Punjabi Montessori school educator. He grew up with three siblings.

When he was five years old, his family relocated to New Delhi where his father launched the Delhi edition of Hindustan Standard. After his father passed away when Gupta was sixteen and his mother died two years later, he and his siblings made the uncommon decision at that time to live independently.

Gupta completed his schooling at Modern School in New Delhi. Ranking 15th nationally on the Indian Institutes of Technology Joint Entrance Examination (IIT JEE), he earned a Bachelor of Technology degree in Mechanical Engineering from IIT Delhi in 1971. His economics professor, Subramanian Swamy, provided a recommendation that supported his admission to Harvard Business School. Opting not to accept a job offer from ITC Limited, Gupta pursued an MBA at Harvard Business School, graduating with distinction as a Baker Scholar in 1973. Notably, his inaugural airplane trip was taken solely to notify ITC of his decision to attend Harvard.

McKinsey & Company

Gupta joined McKinsey & Company in 1973 as one of the pioneering Indian Americans at the firm. Initially declined due to limited experience, his acceptance followed after Walter J. Salmon, his professor at Harvard Business School, intervened with Ron Daniel who led McKinsey’s New York office at that time.

Guided by mentors Ron Daniel and Anupam (Tino) Puri, Gupta later became a mentor himself to Anil Kumar; together they formed a significant Indian-American leadership partnership that played a key role in expanding McKinsey’s footprint in India. The Financial Times characterized them as a "forceful double-act" that successfully secured business opportunities, government connections, and philanthropic relationships associated with Hyderabad-based ISB.

Starting out in New York City, Gupta took charge of McKinsey’s Scandinavian offices beginning in 1981, building his reputation within a smaller market segment. He was elected senior partner in 1984 and led the Chicago office by 1990. In 1994, Gupta broke new ground as McKinsey’s first foreign-born managing director and was re-elected twice thereafter. He is acknowledged as among the earliest Indian-born chief executives of a global corporation. During his leadership tenure, McKinsey expanded operations into 23 additional countries, doubled its partner count to 891, and increased revenues by 280%, reaching $3.4 billion. His yearly earnings were reported between $5 million and $10 million.

Gupta's period at the helm encountered challenges amid evolving market dynamics that tested McKinsey’s traditional values. The firm's involvement with Enron's downfall and adoption of stock-based client compensation during the dot-com era under Gupta and Kumar drew criticism. Views on his responsibility varied; some defended him by highlighting the complexity inherent in managing a firm with numerous leaders worldwide. His successor Ian Davis focused on reestablishing McKinsey’s core heritage following Gupta's aggressive expansion strategy.

After completing three consecutive terms as managing director—the maximum permitted under a policy he introduced—Gupta resumed duties as senior partner in 2003 before becoming senior partner emeritus in 2007. Upon stepping down from active management roles, he reportedly felt overshadowed compared to peers in Silicon Valley and Wall Street who commanded substantially higher incomes.

As senior partner emeritus, Gupta maintained an office at McKinsey and received compensation—$6 million in 2008 followed by approximately $2.5 million annually for three subsequent years. However, after further controversies emerged involving him, McKinsey publicly ended all professional affiliations with Gupta. According to NDTV reports, he was removed from McKinsey’s alumni directory and clients were informed that future engagements with him would cease. This disassociation generated debate about how the firm handled its relationship with a former top executive. Even after completing his prison term, Gupta continued encountering obstacles from McKinsey regarding reinstatement of his professional status.

Activities Beyond McKinsey & Company

In 1997, Gupta, together with fellow senior partner Anil Kumar, established the Indian School of Business (ISB). By 2011, The Financial Times had ranked the institution 13th worldwide. Both Gupta and Kumar have since stepped down from their leadership positions at ISB.

Prior to departing McKinsey, Gupta co-founded Scandent Solutions alongside Ramesh Vangal and launched the American India Foundation with Victor Menezes and Lata Krishnan. After his tenure at McKinsey, he co-founded and took on the role of chairman at the private equity firm New Silk Route (previously known as Taj Capital Partners), partnering with Parag Saxena and Victor Menezes.

In 2005, Gupta joined forces with Raj Rajaratnam and investor Ravi Trehan to create Voyager Capital, which was predominantly owned by Rajaratnam and initially funded with $50 million.

Gupta has served on various corporate boards throughout his career. His board memberships include Procter & Gamble from 2007 until March 2011 and Goldman Sachs between 2006 and 2010. He held the position of non-executive chairman at Genpact from 2007 to 2011 and was a board member at AMR Corporation, the parent company of American Airlines, from 2008 to 2011. Additionally, he served on the board of Harman International during 2009–2011. His roles also extended to the Russian bank Sberbank, where he was a board member, and as managing advisor to Symphony Technology Group.

In advisory capacities within financial firms, Gupta has acted as an advisory partner for Fjord Capital Partners, chaired Clutch Group’s advisory board, and participated on the advisory board of OmniCapital Group.

Philanthropy

Gupta’s philanthropic focus centers on advancing education, enhancing global health, and supporting business development. He has been active on numerous university boards and councils, including election to the University of Chicago’s board of trustees in 1995 and membership in Yale’s President’s Council. He also co-founded both the Indian Institute of Technology Alumni Association and the Indian School of Business, where he served as chairman of its governing and executive boards.

He led the Harvard Business School board of associates as chairman and contributed to advisory boards at institutions such as Wharton’s Lauder Institute, MIT Sloan School of Management, Northwestern’s Kellogg School, Tsinghua University School of Economics and Management, and Skolkovo. His involvement extended to organizations like Millennium Promise and Pratham India Education Initiative.

Within global health initiatives, Gupta was a founding board member and chairman (2007–2011) of The Global Fund to Fight AIDS, Tuberculosis and Malaria. He co-established the Public Health Foundation of India (PHFI), serving as its inaugural chairman before resigning in 2011. His board service also included roles with the Emergency Management and Research Institute, International Partnership for Microbicides, Global Health Council, Harvard School of Public Health, Weill Cornell Medical College, and The Gates Foundation’s India AIDS program until 2011.

Gupta co-founded and co-chaired the American India Foundation (AIF), recognized as the largest US-based diaspora philanthropic organization focused on India, which was founded in response to the 2001 earthquake. Between 2006 and 2011, he was a trustee for the Rockefeller Foundation. In 2009, he gained election to the American Academy of Arts and Sciences. Additionally, he helped establish the Young India Fellowship in 2011 and formerly served as Co-Chairman of the United Nations Association of America.

His global business leadership includes chairing the International Chamber of Commerce and acting as special assistant for Management Reform to UN Secretary General Kofi Annan in 2005. From 2008 through 2010, he participated on the World Economic Forum foundation board. Gupta also chaired the U.S.-India Business Council between 2002 and 2005 and was a member of Indian Prime Minister Manmohan Singh's global advisory council until early 2012.

Insider Trading Conviction and Imprisonment

On March 1, 2009, the SEC initiated a civil lawsuit against Rajat Gupta, accusing him of insider trading in connection with Rajaratnam, the founder of Galleon Group. Anil Kumar, a senior partner at McKinsey and co-founder of the Indian School of Business, had previously admitted guilt in the same matter. Gupta, Kumar, and Rajaratnam shared close professional ties; although Gupta filed a countersuit, both parties ultimately withdrew their claims.

Federal criminal charges were brought against Gupta on October 26, 2010. He entered a plea of not guilty and was released on bail set at $10 million. His defense attorney refuted any allegations of illegal activity. The SEC contended that Gupta’s confidential tips resulted in unlawful gains or avoided losses totaling over $23 million. Prosecutors highlighted Gupta’s involvement on elite corporate boards where he accessed sensitive information.

Media reports scrutinized wiretap recordings and trading patterns, emphasizing Gupta’s connections with Rajaratnam and Kumar. The trio were founding partners in private-equity ventures Taj Capital and New Silk Route; however, Rajaratnam and Kumar departed prior to operational commencement. Gupta retained his position as chairman of New Silk Route, which received a $50 million capital infusion from Rajaratnam.

The jury trial for Gupta commenced on May 22, 2012. On June 15, he was convicted on three counts of securities fraud and one count of conspiracy but acquitted on two other allegations. His counsel announced intentions to file an appeal. Prosecutors requested sentences up to ten years based on $11.2 million in profits or avoided losses linked to Rajaratnam’s trades; the defense maintained that Gupta did not benefit financially.

On October 24, 2012, Judge Jed S. Rakoff sentenced Gupta to two years in prison for disclosing confidential boardroom information to Rajaratnam. The conviction was affirmed by a Federal Appeals Court in March 2014. Gupta began serving his sentence on June 17, 2014, after the US Supreme Court denied his bail request shortly before.

Gupta was transferred to house arrest on January 5, 2016, permitted to work from an office during weekdays; this arrangement concluded in March 2016. In February 2016, the US Second Circuit Court of Appeals agreed to review his appeal seeking to overturn the conviction; however, this appeal was ultimately rejected in January 2019.

Post-Release

In March 2019, Gupta published his memoir titled Mind Without Fear through Juggernaut Books. In an extensive interview following the book’s release, he revealed that he remained silent during his trial based on legal counsel’s advice and asserted that there was “no benefit, no establishment of criminal intent” involved in the charges against him, which he characterized as fabricated. Interviewer Madhu Trehan questioned him about Anil Kumar’s testimony against him and noted the absence of remorse expressed in his memoir.

Personal Life

Rajat Gupta wed Anita Mattoo in 1973 after meeting at IIT Delhi. Mattoo, an electrical engineer whom Gupta described as “a much smarter student,” hails from Srinagar, Kashmir, India. The couple has four daughters.

In 2008, Gupta’s net worth was estimated at approximately US$84 million.

External links

Shahane, Girish, "What explains Indians' empathy towards rule-breakers?", Scroll.in, July 8, 2015.
"A leader unafraid to take unpopular decisions", The Economic Times, October 24, 2007.
Sreenivasan, Sreenath, "The Superboss", cover feature in Business Today, April 22, 1994.
Bill Gates’ remarks at the 50th Anniversary of the India Institute of Technology, January 17, 2003 – moderated by Rajat Gupta.
Gupta, Rajat, "Nation’s Strength", article on public health published in Mint, February 16, 2007.
Gupta, Rajat, "Key principles for effective philanthropy", Mint, March 6, 2011.
"David Rockefeller Jr., Ann Fudge and Rajat Gupta appointed to Rockefeller Foundation Board", October 17, 2006.
"Summer News Update", University of Chicago Chronicle, September 28, 1995.
Biography at New Silk Route
Qatar Financial Center
Lemann, Nicholas, "The Conference Room Kids: McKinsey as the next career milestone",The New Yorker, October 18, 1999.
"The steep price of insider trading", NYTimes.com Dealbook blog. March 13, 2012.