Saturday 16 February 2013

Rajat Gupta’s phone call

A chapter from ‘Fallen Angel’, Sandipan Deb’s new book on the rise and fall of Rajat Gupta

The only phone conversation between Rajaratnam and Gupta that the US government was able to tap took place in the early evening of 29 July 2008. It lasted eighteen minutes. The conversation is, to say the least, revealing. Gupta sounds unsure and confused at times, and is looking to his friend for career advice. He is also lobbying for a bigger role in the Galleon Group—and more money.
It is obvious from the conversation that Gupta is well aware that his long-time protégé, and McKinsey employee, Anil Kumar, is working on the sly for Rajaratnam and is getting paid for it. Gupta has now been retired from McKinsey for about a year, but the conversation implies that it is very likely he knew about the arrangement between Rajaratnam and Kumar while he was still working at the firm.
After the usual pleasantries, Rajaratnam, who is suffering from a cold, mentions that he has called because he is meeting Gary Cohn, president and chief operating officer of Goldman Sachs, in two days, then goes on: “And there’s a rumour that Goldman might look to buy a commercial bank.” Gupta is initially non-committal, but Rajaratnam asks him point blank: “Have you heard anything along that line?” He mentions Wachovia, at that time the fourth-largest bank holding company in the US in terms of assets, but in deep trouble.



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