'Gupta's USD 10 million loss deliberate hanky panky by Rajaratnam'
Berkshire Hathaway's India-born top executive Ajit Jain was 'shocked' to hear that his friend ex-McKinsey head Rajat Gupta had lost USD 10 million in an investment fund with Raj Rajaratnam, which he described as a 'deliberate hanky panky' by the convicted hedge fund founder.
Jain, seen as a possible successor to Berkshire's billionaire CEO Warren Buffett, testified as a defense witness in Gupta's insider trading trial, which is wrapping up in Manhattan federal court here.
In Jain's video deposition, which was recorded on May 27 and played in the courtroom for the jury on Tuesday, Jain tells Gupta's lawyer Gary Naftalis and the prosecution he was 'shocked to hear' from Gupta in 2009 that he had lost USD 10 million in a Voyager fund that was managed by Rajaratnam.
"He (Gupta) told me, as best I can remember, that he had a USD 10 million investment with Rajaratnam in some venture and he had been gypped, swindled or cheated by Raj," Jain said. "He lost his entire investment with Rajaratnam."
Jain said from his conversation with Gupta, he was 'left with the impression' that it was not just a bad investment or loss of money but 'a deliberate hanky panky on part of Rajaratnam'.
In response to a question by Naftalis, Jain said it was 'unusual' for Gupta to share information about his investment with him.
Gupta's lawyers have argued in the case that he had no motive to share secret boardroom information about Goldman Sachs and Proctor and Gamble with Rajaratnam since there was a falling out between the two when Gupta lost his money.
A former McKinsey partner Anil Kumar had testified in the trial that Gupta felt Rajaratnam had taken his money behind his back and was being 'evasive' about what had happened to his investment. 63-year-old Gupta, a relatively 'calm' person, was upset with Rajaratnam, Kumar had said.
The prosecution has said Gupta leaked information to the Sri Lankan co-founder of the Galleon Group much before he lost his money in Voyager.
One of the most well known Indian-Americans in corporate America, Gupta has been accused of passing insider information to Rajaratnam, who is currently serving an 11 year prison term after being convicted last year.
The government alleges Gupta tipped Rajaratnam seconds after a Goldman board meeting ended about a USD five billion investment by Buffett in the banking giant at the height of the financial crisis in 2008.
The former Proctor and Gamble and Goldman board director has pleaded not guilty to one count of conspiracy and five counts of securities fraud. He faces a maximum prison sentence of 25 years if convicted.
Post new comment