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The Real Rajat Gupta

Hello. My name is Atul Kanagat. I am an alumnus of IIT Bombay (1977) and Harvard Business
School (1982), and a retired Director of McKinsey & Company (ret. 2004). I have known and
admired Rajat Gupta for almost twenty-five years.
I am deeply troubled by the recent events engulfing this good man. I am concerned that a
grave injustice is being perpetrated on Rajat and the fine reputation he has built with hard
work and perseverance over half a lifetime. The political climate of animosity toward Wall
Street in general and Goldman Sachs in particular is creating misdirected anger at Rajat who
has never been a Wall Street executive and whose conduct had absolutely nothing to do with
the troubles of the global financial system. Sadly, we witnessed an unseemly rush to
judgment, with total disregard for the basic principle of the presumption of innocence.
I offer below my own assessment of Rajat and what is happening to him. If you are
sympathetic with my observations and line of reasoning, please do your part in helping restore
the good name of an innocent and honest man.
The Rajat Gupta I Know (1)
I first met Rajat in 1987. He was exploring a transfer to McKinseys Chicago Office where I was
about to be elected Partner. He had earned a terrific professional reputation in Copenhagen
where he had led a very successful effort to establish McKinsey as the preeminent consulting
firm in Scandinavia. Shortly after transferring to Chicago, he was appointed Managing Director
of that office. In four short years, he led the office to a tripling of its consulting staff with
associated growth in consulting revenues. His successes in Scandinavia and Chicago led to his
election as Managing Director (MD) of the global Firm, becoming the first person of Indian
origin to lead a major US company.
As MD, he continued his successful leadership performance, helping the Firm grow rapidly and
solidifying its global preeminence as advisor to top managements. His success was underlined
by three consecutive elections to the MDs office. He could not be a candidate for election a
fourth time due to a three-term limit that he had himself put in place in his first term. After
stepping down as MD, Rajat continued to serve clients as a Director in the Firm till the
mandatory retirement age of 60.
Rajat enjoyed decisive support from the partnership, resulting in repeated elections to MD. Of
course, Rajat also had his detractors at the Firm, some who disagreed with his leadership
direction, and, as you might expect, others that were openly envious of his spectacular
success. They were, of course, a distinct, if somewhat vocal, minority.
A telling story about Rajats leadership at McKinsey came in the 90s as a result of the
spectacular success of Bain Capital, an offshoot of the consulting firm, Bain & Company.
Voices inside McKinsey were increasingly suggesting the Firm start Blue Capital to tap into
the flow of money being enjoyed by private equity firms at the time. Rajat even had a
majority of votes on the Shareholders Committee, McKinseys policy-making internal board, in
support of such a move. Rajat oversaw the debate but, in the end, steered the Firm away
from the idea. In his view, getting into the private equity business would be a huge departure
from the Firms mission of serving clients and needed near unanimous support. Majority
support was insufficient in his judgment, even though Blue Capital would likely have greatly
increased the financial interests of the Firms partners.
Having retired at 60, Rajat was still young enough to continue his spectacular career. As his
involvement with McKinsey decreased post-retirement, he found the capacity and time to
engage in other areas where his experience and talent would be valuable. He started by
devoting half his time overall to humanitarian non-profit work, becoming one of the most
prolific humanitarian business leaders in the world. He joined, in different roles, the UNs
Global Fund and the Gates Foundation and numerous other entities. In India, where he was
very highly regarded, he led the effort to create the Indian School of Business in Hyderabad
and was deeply involved in creating schools of public health across the subcontinent. The list
of his humanitarian contributions and achievements is too long to fit into this essay; suffice it
to say that the full list is a testament to the good works of a truly exceptional professional life.
During all this, he continued to help McKinsey with new client introductions, especially in India
where his celebrity helped open doors for the Firm.
He joined a few of the many corporate Boards that invited him aboard. These included
Goldman Sachs, American Airlines, Procter & Gamble, Genpact, and Harman International. He
also began to look for ways to participate more directly in the financial sector; in this context
he co-founded the New Silk Route (NSR) with two partners, initially including Raj Rajaratnam.
The fund was created to bring capital to infrastructure projects and investment opportunities
in India. Rajaratnam, however, quickly dropped out of the management of the fund.
Ironically, at the very time the US Attorney claims Rajat was passing information to
Rajaratnam, Rajat was in the middle of a substantive disagreement involving the loss of over
$10 million in a separate fund run by Rajaratnam.
The Rajat Gupta I Know (2)
I have had the privilege of observing Rajat very closely during the last 25 years or so. I served
two major clients of the Firm in the late 80s and 90s with Rajat as my senior partner. I was a
member of the Chicago partner group, helping run and grow the office. When I moved to
Seattle to open a new office for McKinsey in the Pacific Northwest, Rajat was one of two or
three senior partners that flew out to help me get traction with some of the leading CEOs
there. I also led a Firm-sponsored competitive analysis of a competitor firm under his
guidance and worked with him and others on a two-year exploration of the Firms Global
Strategy. More recently, I served briefly as VP of Corporate Development at Harman
International, where he also served as a Director of the Board.
Having had every opportunity to observe Rajat and his professional rise up close, in meeting
rooms, boardrooms and living rooms. I believe I know him as well as anybody. And I can say
with complete conviction that, in my view, he is not the man being portrayed by the U.S.
government in the Galleon case.
I know Rajat as a gentle, soft-spoken and caring human being, blessed with a wonderful
intellect and boundless generosity of spirit. He has built his phenomenal success largely by
helping others succeed. He has done this in his personal life, in his work with McKinsey
partners, in his service of clients and in his advisory capacity as Board member and strategic
advisor to institutions around the world. Underpinning his various talents are his remarkable
powers of empathy, his prodigious capacity for work, and his selfless pursuit of initiatives to
help others. In all my years as colleague and friend, he has never lied about anything or said
anything derogatory about others, even when they disagreed with him or were intent on
harming him. He has a cautious, caring and respectful style of listening and talking to others
regardless of station, from Bill Gates to my 18-year old son or a junior colleague at McKinsey.
Whats going on?
I believe the government is doing this primarily because it can. I believe that Rajat was swept
up, like the proverbial dolphin in a tuna net, in the Galleon wiretap probe. Excited by the
prospect of nailing someone as high profile as Rajat, the government undoubtedly looked
everywhere for evidence to level charges against Rajat. With the successful prosecution of
Rajaratnam behind them, they returned to Rajats case. All they could find on Rajat was what
they had found before: circumstantial evidence from calls placed by him to Rajaratnam; they
cherry-picked a few that seemed suspicious. Importantly, it allowed them to create an
inaccurate narrative from highly selective circumstantial information.
Remarkably, the governments charges do not claim Rajat made any money on his illegal
tips to Rajaratnam but was doing favors for a friend. I know that Rajat has positively affected
hundreds of people at the Indian Institutes of Technology (IIT), Harvard Business School,
McKinsey, clients, and the many institutions he has advised. I urge these many silent voices
now come to the fore and speak the truth about what they know of this remarkable man and
help him combat the unprincipled assault on his character. In doing so, I propose they
consider the following questions:
1. Does the portrait being painted of him measure up to what you personally know about the
2. Has he been treated fairly?
3. What role does the popular anti-Wall Street sentiment in the political arena play in the
prosecution of Rajat?
My plea to all fair-minded people is to avoid falling into the trap of condemning and vilifying an
innocent man. In a highly charged political atmosphere, Rajat is far more likely to be simply
collateral damage in the governments prosecution of Rajaratnam.