Group-16 (Assignment on Rajat Gupta Case Study)

Abhinav Singh-22PGP154, Aditya Kumar Gautam-22PGP167,

Ritanshu Rajore-22PGP176, Neha Saradana-22PGP321

Q.1:- What qualities helped Gupta succeed and become a leader throughout his career? Did you see
any evidence up to his retirement from McKinsey of characteristics that might have led him to
subsequently compromise his integrity?

Answer:- Rajat Gupta was a highly accomplished individual who faced challenges early in life but
thrived through his determination, persistence, and strong intellect. He excelled academically, ranking
0015 in the prestigious IIT Delhi and graduating from Harvard Business School as one of three Indians in
his class. Gupta was described as a kind and helpful person, who later became involved in philanthropy
and had connections with prominent figures like Bill Gates and Bill Clinton. He was successful at
McKinsey, where he worked in a competitive environment and rose to the top.

The qualities that helped Gupta succeed and become a leader throughout his career were his Fortitude,
perseverance, and the capacity to keep going when things get tough. His qualities were evident from the
fact that he led the Scandinavia office on his own and helped in expanding it from 15 to 125 professionals
and also made it profitable.

I didn’t see any characteristics that might have led Gupta to subsequently compromise his integrity but his
stubbornness and inquisitive nature to face new challenges without weighing other’s opinions highly
would have cost him to lose sight of his integrity in pursuit of his new dream.

Q.2:- What errors do you see Gupta making in his choices after stepping down as head of
McKinsey?

Answer:- When Rajat Gupta left McKinsey in 2007, he was on the board of publicly traded companies.
During the next seven years he served on several high profile boards and was appointed to the Board of
Directors of Goldman Sachs, Procter & Gamble and AMR.
He was also interested in his private equity and hedge fund world where he was introduced to Raj
Rajaratnam. Years later, when Rajat Gupta and Trehan Rajaratnam sought advice and venture capital, they
formed a proposed venture. Voyager Capital Partners, after which Gupta reunited with Rajaratnam and
two other of his partners to launch a new venture, his New Silk Road.
His greatest folly was meeting Rajaratnam and working with him on several ventures. He was later jailed
for providing classified information about Goldman Sachs investments to his Rajaratnam and was
sentenced to 24 months in prison and he fined $500,000.

Q.3:- What is the nature of the insider trading case against him? How compelling is the
case? Why do you think he has not accepted his guilt?
Answer:- Insider Trading Insider trading involves trading in a public company's stock by someone who
has non-public, material information about that stock for any reason. Regulatory scrutiny arises in the 2
cases when an individual with fiduciary relationship with the firm having material, on public
information-Trades himself Tipping information to others
In this case, There was evidence of Mr. Rajat Gupta tipping his friend Mr. Rajaratnam on 3 different
occasions
–March 12, 2007, Mr. Gupta unlawfully disclosed material nonpublic information regarding Goldman
Sach’s First quarter Earnings. Rajaratnam benefitted by purchasing 350,000 shares on the very same day.
-September 23, 2008, Mr. Gupta unlawfully disclosed material nonpublic information regarding Warren
Buffet’s $5 billion in Goldman Sach’s. Mr. Rajaratnam bought 150,000 and 67,200 shares.
-October 24, 2008, this time Mr. Gupta unlawfully disclosed material nonpublic information regarding
Goldman Sach’s having lost money for the quarter ending November 28, 2008 and Mr Rajaratnam used
this information selling 150,000 shares on October 24,2008.

Q.4:- How does someone in Gupta's position make decisions that compromised his reputation and
integrity? Have you experienced colleagues you admire who have made errors of judgment?

Answer:- There could be a huge number of reasons prompting Rajat Gupta settling on choices that landed
him in a difficult situation, some of them are as per the following:
1.It could be plausible that Gupta messed with the circumstance and didn't comprehend the gravity of the
discussion he was having with Rajaratnam.
2.Chances are that Gupta was new to financial markets sectors and didn't have sound information on
exchanging and stocks; consequently, he shared data that was not supposed to be shared.
3.Before Gupta, nobody at any point was sentenced for insider trading and in this way it very well may be
plausible that Rajat figured he could undoubtedly move away subsequent to doing something like this.
4.In Rajat Gupta's situation, a relaxed discussion could be a data spill and perhaps he accepted it as a
cordial discussion with Rajaratnam and didn't plan to share any secret data.
5.He needed to be in a position where Rajaratnam owes him some help as he was a financial backer in a
considerable lot of his endeavors so Gupta could have a circuitous advantage from him. This is a human
inclination to make mistakes of judgment. In our everyday lives, we run over associates and companions
making such mistakes. Settling on an objective choice is at times impacted by how we might interpret
what is happening.