NEW YORK: Convicted hedge fund founder Raj Rajaratnam wanted former Goldman Sachs director Rajat Gupta to ask Indian industrialist Mukesh Ambani if his company Reliance Industries was planning to “aggressively” get into the solar business, information federal prosecutors want to include as evidence in Gupta’s ongoing insider trading trial.
In court documents submitted on Monday, prosecutors said they want to offer as evidence an April 3, 2008, email from former McKinsey executive Anil Kumar to Gupta to demonstrate the “close” relationship between Gupta and Rajaratnam, particularly the “mutual trust” between them.
In the April 2008 email, labeled “urgent”, Kumar told Gupta that Rajaratnam wanted him to ask whether “Reliance Industries Limited would be getting into the solar business aggressively because, if so, there would be implications for supplier companies.”
According to the email, Kumar said, “When with Mukesh on portfolio question… 2 things to explore: A) Raj wants to know if they will get into the solar biz aggressively and when (there are implications for supplier companies etc).”(sic)
The email was sent to Gupta around the time he was scheduled to meet Ambani.
Ambani has not been accused of any wrongdoing in the case.
Kumar has pleaded guilty to insider trading and is cooperating with prosecutors. He is scheduled to take the witness stand in Gupta’s trial, which began on May 21.
“The proffered testimony of Kumar is relevant to demonstrate the nature of the relationship between Gupta and Rajaratnam, particularly the mutual trust between them and that their relationship was so close that Rajaratnam was willing to confide in Gupta, the former worldwide head of McKinsey, about his illicit activities with Kumar in violation of McKinsey policies and US tax laws,” the prosecutors said.
US District Judge Jed Rakoff, presiding over the case, has not yet decided whether to allow the email into evidence.
The government alleges that Kumar received money from 2004 through 2006 in exchange for providing Rajaratnam with material, non-public information.
Kumar received approximately USD 125,000 every 3 months in 2004 and 2005, as well as a bonus of one million dollars in late 2006 after providing Rajaratnam with material, nonpublic information.
During a July 29, 2008 call between Gupta and Rajaratnam, the Sri Lankan founder of the Galleon hedge fund told Gupta that he was “giving him [referring to Kumar] a million dollars a year for doing literally nothing.”
In the July 29 call, Rajaratnam also cites the name of Ambani’s younger brother industrialist Anil Ambani as he discusses with Gupta how a telecom fund can be set up. -PTI