MUMBAI (Reuters) - Before Indra Nooyi became CEO of PepsiCo Inc or Vikram Pandit took the reins at Citigroup Inc there was Rajat Gupta, the original “global Indian” who was the first to head a major Western business.
More than 17 years after first being elected head of McKinsey & Co, the management consultancy, Gupta was charged last week in part of the same insider trading investigation that saw his friend, hedge fund manager Raj Rajaratnam, sentenced to 11 years in prison, the longest-ever sentence in such a case.
For hundreds of thousands of bright young men and women from India’s huge middle class, Gupta and later Pandit and Nooyi were role models -- case studies of how learning and old-fashioned hard work could lead to success on a global scale.
“He kind of came to epitomize, if not exactly a rags-to- riches story, but more of how a person from a relatively humble background, out of sheer hard work and merit, could really rise to the top of the ladder,” said Paranjoy Guha Thakurta, a political commentator.
Gupta was born in 1948, a year after India’s independence, in what was then Calcutta and is now Kolkata. His journalist father moved the family to the capital New Delhi when he was five.
The young Gupta attended the prestigious Modern School, a sprawling campus in the center of the city, on a scholarship and his classmates included the sons and daughters of India’s elite.
His father died when he was 16 and his mother, a Montessori school teacher, died two years later, leaving Gupta and two sisters and a brother on their own.
If anything, being orphaned made him even more determined to succeed. Gupta stood out as a student, ranking 15th out of thousands in the entrance exam for the Indian Institute of Technology (IIT) in 1966, according to a Business Today profile.
The IIT entrance is fiercely competitive and at the time was one of the few paths to professional opportunity in India.
He took a place at the IIT’s Delhi campus, earning a degree in mechanical engineering, perhaps the best professional qualification in the land in the early 1970s.
It was success against a challenging background that made Gupta’s story compelling to many in India.
“Everybody cannot be born into an Ambani family,” said Sarthak Prakash, 24, a graduate business student at IIT-Delhi, referring to the Ambani brothers who fought over a multi-billion-dollar empire inherited from their father.
“Some of us will be born as middle-class people in Gupta families and we will have to study and pay our own way.”
Other than the success, there was nothing extraordinary in Gupta’s early years. He was fairly typical for someone from Bengal, a part of India that traditionally prizes learning, debate and the arts more than wealth.
In interviews later in his career, Gupta used to quote from the Bhagavad Gita, which encapsulates the wisdom of India’s ancient Vedic knowledge, especially the principles by which life should be lived.
At the IIT, he was a debater and a keen amateur dramatist. At a play rehearsal he met Anita Mattoo, a Kashmiri from northern India. They married in 1973.
Offered a job at cigarette maker ITC Ltd, then about the most sought-after employment for a young graduate, Gupta instead opted to go to Harvard Business School, where he was a Baker Scholar, an honor bestowed on the top 5 percent of the MBA class.
He joined McKinsey after Harvard and rose to lead the partnership’s operations in Scandinavia before becoming global head in 1994.
While at McKinsey, he co-founded the Indian School of Business, a graduate school in the southern city of Hyderabad that quickly became an elite institution in education-mad India. He also co-founded the American India Foundation.
Gupta completed three terms as managing director of McKinsey in 2003 and retired in 2007, a lifer in a firm many use as a stepping stone to Wall Street or the corporate world.
However, he was only getting started in a variety of advisory, philanthropic and investment roles that leveraged his formidable networking skills and ultimately got him in trouble.
Gupta, now 62, is accused of leaking secrets of Goldman Sachs and Procter & Gamble, where he was a director, to the Sri Lankan-born Rajaratnam, who founded the Galleon Group. On Wednesday, Gupta pleaded not guilty to all charges and was freed on $10 million bail.
“I‘m really saddened by this turn of events because regardless of the outcome, he’s done a lot for the world, and for India in particular,” said Pramod Bhasin, vice chairman and former CEO of back office services firm Genpact, where Gupta was chairman before resigning in March.
India has a large and prosperous diaspora that is a source of national pride, with the exploits of overseas Indians a regular feature of Indian media.
Although he holds a U.S. passport and has lived outside India for four decades, Gupta embraces being Indian. He often quotes from Indian philosophy and literature, even to Western groups, and breaks into Hindi or Bengali around Indians.
“He was one of those people who, despite having reached a very high level, used to carry his Indian-ness with a certain self-confidence,” said Pramath Sinha, a former McKinsey partner.
“He was genuinely happy to talk about India or to discuss India rather than disown India, which sometimes Indians who have been very successful tend to do,” he said.
Charming and persuasive, impeccably dressed and well-coiffed, Gupta was known in the United States as a master networker who was a prolific joiner and leader of boards and committees, becoming the quintessential insider and rubbing shoulders with the likes of Bill Gates and Bill Clinton.
People who know him say Gupta has personal warmth and a knack for connecting with people, taking an interest in their careers and families. Not a back-slapper or a joker, Gupta likes small groups and tends to steer conversation toward topics in which he takes a professional or philanthropic interest.
Gupta and his wife raised their four daughters in a waterfront mansion in upmarket Westport, Connecticut. The house is now security for his bail.
“He has what every Indian seeks, which is recognition, respect of the mind,” said Suhel Seth, a marketing expert and commentator.
He also has money, but perhaps not as much as he wanted. Gupta is a millionaire but he hobnobbed with billionaires and multi-millionaires, including Rajaratnam, with whom he invested.
Despite his fairly straight-laced upbringing, Gupta is widely viewed as motivated by a desire to become extremely rich.
“Here he sees an opportunity to make a hundred million dollars over the next five years, or 10 years, without doing a lot of work,” Rajaratnam said of Gupta in a recorded phone call played during the hedge fund manager’s trial in New York.
Sinha takes issue with the portrayal of Gupta as driven solely by greed, noting he was interested in helping others and motivated by new challenges.
“I know it is hard to argue, and I think that with all the money that he was investing with Raj and so on, it seems like that’s what he wanted to do,” said Sinha. “Obviously, there was a lapse.”
Additional reporting by Annie Bannerjee in NEW DELHI; Editing by Raju Gopalakrishnan