Anil Kumar (businessman)
Encyclopedia
Anil Kumar was a longtime top senior partner and director at management consultancy McKinsey & Company
, the co-founder of the Indian School of Business
with Rajat Gupta
, and the creator of two different types of outsourcing
. He graduated from The Doon School
and the Indian Institute of Technology Bombay
in India, Imperial College London
in the UK, and The Wharton School
in the US.
In 2010 Kumar pleaded guilty to insider trading
in a dramatic “descent from the pinnacle of the business world.”
and Business Process Outsourcing
. He was “one of McKinsey’s most senior employees [and] brightest stars”Rushe, Dominic. “McKinsey Jettisons Troubled Star Kumar”. The Sunday Times. December 6, 2009. and a protégé of longtime former managing director (chief executive) Rajat Gupta
, though following Gupta's retirement never ran in the elections for chief executive himself. Anticipating the rise of India and Silicon Valley, he co-founded and directed McKinsey offices in Silicon Valley in the 1980s and in India in the 1990s. During the dot-com bubble
he headed McKinsey's technology and Internet consulting operations, where he and Gupta created a program to allow the firm to accept stock in lieu of consulting fees. At McKinsey Kumar was Chairman of the Knowledge Center and Chairman of the Asia Center, among others. He was a director and corporate officer of the firm. He lived and worked from multiple offices in New Delhi, New York, and Silicon Valley, traveling over thirty thousand miles a month.
Kumar co-founded the Indian School of Business
in 1997, which is today one of the top 15 business schools worldwide. He is a member of the Council on Foreign Relations
and the Young Presidents' Organization
, a founding charter member of TiE
, and was the US chairman of India's largest business lobby, the Confederation of Indian Industry
.
Criticism of Kumar centered around his close relationship with Gupta and a perception of arrogance. According to The Financial Times, “as much as Mr Kumar was admired for his business ability and sharpness, he also drew fire for what was seen as his arrogance.”
. Former mentor Rajat Gupta was later arrested by the FBI in a related case, prompting inquiries into McKinsey’s senior leadership and business model.
As of December 2009, Kumar was no longer at the consultancy. In January 2010 he pleaded guilty to insider trading charges and was the government’s star witness in March 2011 in U.S. v Rajaratnam against his billionaire friend and Galleon Group
founder Raj Rajaratnam
. In the sprawling case his involvement was unusual; according to a Reuters blog, “He’s the only informant who could be considered even more successful than Raj was, at least professionally if not in terms of raw cash. Raj had money, more money than he really knew what to do with, but Kumar had much more societal acceptance and prestige.” He settled with the SEC in May 2010 for $2.8 million, the amount after gains he received from Rajaratnam through a Swiss bank account in a domestic worker's name. Gupta, Rajaratnam, and Kumar were all close friends and had founded the $1.3-billion private equity firm New Silk Route
together, though Rajaratnam and Kumar withdrew before the firm began operation.
Kumar was represented by attorney Robert Morvillo, who had previously led billionaire Martha Stewart
’s defense in her own insider trading case
.
International media, business, and finance industry observers have analyzed extensively his actions in aiding Rajaratnam. Consensus remains divided on the precise motivators of money, respect, and relationship, with The New York Times asking, “Why would people who seem to have it all — wealth, prestige, powerful jobs and infinite access to others with the same — risk that, and more, to provide inside information to the Sri Lankan-born billionaire?”Cohan, William D. “Why Is Enough Never Enough?”. The New York Times (blog). April 27, 2011. Rajaratnam's annual payments were estimated at less than 5% of Kumar's annual income (and just 1-2% excluding a one-time bonus), further raising the question of motivation.
.
He lived and worked for decades in New Delhi, New York, and Silicon Valley simultaneously. He had a Manhattan
apartment in the Time Warner Center
and a “housekeeper in Saratoga, California.”
McKinsey & Company
McKinsey & Company, Inc. is a global management consulting firm that focuses on solving issues of concern to senior management. McKinsey serves as an adviser to many businesses, governments, and institutions...
, the co-founder of the Indian School of Business
Indian School of Business
The Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
with Rajat Gupta
Rajat Gupta
Rajat Kumar Gupta was the managing director of management consultancy McKinsey & Company from 1994 to 2003 and a business leader in India and the United States...
, and the creator of two different types of outsourcing
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
. He graduated from The Doon School
The Doon School
The Doon School is an independent school located in Dehradun in the state of Uttarakhand in India. Established in 1935, it was founded by Satish Ranjan Das. Its first Headmaster was Arthur E...
and the Indian Institute of Technology Bombay
Indian Institute of Technology Bombay
The Indian Institute of Technology Bombay , popularly known as IIT Bombay or IITB, is a public research university located in Powai, Mumbai...
in India, Imperial College London
Imperial College London
Imperial College London is a public research university located in London, United Kingdom, specialising in science, engineering, business and medicine...
in the UK, and The Wharton School
Wharton School of the University of Pennsylvania
The Wharton School is the business school of the University of Pennsylvania, an Ivy League university in Philadelphia, Pennsylvania. Wharton was the world’s first collegiate business school and the first business school in the United States...
in the US.
In 2010 Kumar pleaded guilty to insider trading
Insider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
in a dramatic “descent from the pinnacle of the business world.”
Career
Kumar was considered a star partner behind the scenes of the consultancy, where he pioneered the concepts of Knowledge Process OutsourcingKnowledge process outsourcing
Knowledge process outsourcing is a form of outsourcing, in which knowledge-related and information-related work is carried out by workers in a different company or by a subsidiary of the same organization, which may be in the same country or in an offshore location to save cost...
and Business Process Outsourcing
Business process outsourcing
Business process outsourcing is a subset of outsourcing that involves the contracting of the operations and responsibilities of specific business functions to a third-party service provider. Originally, this was associated with manufacturing firms, such as Coca Cola that outsourced large segments...
. He was “one of McKinsey’s most senior employees [and] brightest stars”Rushe, Dominic. “McKinsey Jettisons Troubled Star Kumar”. The Sunday Times. December 6, 2009. and a protégé of longtime former managing director (chief executive) Rajat Gupta
Rajat Gupta
Rajat Kumar Gupta was the managing director of management consultancy McKinsey & Company from 1994 to 2003 and a business leader in India and the United States...
, though following Gupta's retirement never ran in the elections for chief executive himself. Anticipating the rise of India and Silicon Valley, he co-founded and directed McKinsey offices in Silicon Valley in the 1980s and in India in the 1990s. During the dot-com bubble
Dot-com bubble
The dot-com bubble was a speculative bubble covering roughly 1995–2000 during which stock markets in industrialized nations saw their equity value rise rapidly from growth in the more...
he headed McKinsey's technology and Internet consulting operations, where he and Gupta created a program to allow the firm to accept stock in lieu of consulting fees. At McKinsey Kumar was Chairman of the Knowledge Center and Chairman of the Asia Center, among others. He was a director and corporate officer of the firm. He lived and worked from multiple offices in New Delhi, New York, and Silicon Valley, traveling over thirty thousand miles a month.
Kumar co-founded the Indian School of Business
Indian School of Business
The Indian School of Business is a business school in Hyderabad, Andhra Pradesh, India and is widely recognized as one of the top business schools in the world. It offers a Post Graduate Programme in Management , a Fellow Program in Management, and a Post Graduate Programme in Management for Senior...
in 1997, which is today one of the top 15 business schools worldwide. He is a member of the Council on Foreign Relations
Council on Foreign Relations
The Council on Foreign Relations is an American nonprofit nonpartisan membership organization, publisher, and think tank specializing in U.S. foreign policy and international affairs...
and the Young Presidents' Organization
Young Presidents' Organization
The Young Presidents’ Organization is a global network of young chief executives. With approximately 18,000 members in more than 100 countries, YPO and its graduate organization, WPO share a founding mission: Better Leaders Through Education and Idea Exchange....
, a founding charter member of TiE
TiE
TiE is a global nonprofit dedicated to fostering entrepreneurship. TiE has 54 chapters in 13 countries, with a total membership exceeding 13,000. TiE is most closely affiliated with the South Asian business community, and is recognized as an important networking forum for entrepreneurs and investors...
, and was the US chairman of India's largest business lobby, the Confederation of Indian Industry
Confederation of Indian Industry
The Confederation of Indian Industry is a non-government, not-for-profit, industry-led and industry-managed organisation, seeking to play a proactive role in India’s development process. The organisation works to create and sustain an environment conducive to the growth of industry in India,...
.
Criticism of Kumar centered around his close relationship with Gupta and a perception of arrogance. According to The Financial Times, “as much as Mr Kumar was admired for his business ability and sharpness, he also drew fire for what was seen as his arrogance.”
Galleon case
Kumar remained hidden from the media and outside McKinsey until a 2009 arrest in conjunction with an ongoing and wide-ranging US governmental investigation into insider tradingInsider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
. Former mentor Rajat Gupta was later arrested by the FBI in a related case, prompting inquiries into McKinsey’s senior leadership and business model.
As of December 2009, Kumar was no longer at the consultancy. In January 2010 he pleaded guilty to insider trading charges and was the government’s star witness in March 2011 in U.S. v Rajaratnam against his billionaire friend and Galleon Group
Galleon Group
Galleon Group was one of the largest hedge fund management firms in the world, managing over $7 billion, before closing in October 2009. The firm was at the center of a 2009 insider trading scandal that resulted in investors pulling capital from the firm rapidly...
founder Raj Rajaratnam
Raj Rajaratnam
Raj Rajaratnam is an American former hedge fund manager and founder of the Galleon Group, a New York-based hedge fund management firm. On October 16, 2009, he was arrested by the FBI on allegations of insider trading, which also caused the Galleon Group to close. He stood trial in U.S. v...
. In the sprawling case his involvement was unusual; according to a Reuters blog, “He’s the only informant who could be considered even more successful than Raj was, at least professionally if not in terms of raw cash. Raj had money, more money than he really knew what to do with, but Kumar had much more societal acceptance and prestige.” He settled with the SEC in May 2010 for $2.8 million, the amount after gains he received from Rajaratnam through a Swiss bank account in a domestic worker's name. Gupta, Rajaratnam, and Kumar were all close friends and had founded the $1.3-billion private equity firm New Silk Route
New Silk Route
- History and leadership :NSR was initially named Taj Capital. Its founding team included, at various points:* Rajat Gupta, former managing partner at McKinsey & Company* Parag Saxena, former managing partner of Invesco Capital and Vedanta Capital...
together, though Rajaratnam and Kumar withdrew before the firm began operation.
Kumar was represented by attorney Robert Morvillo, who had previously led billionaire Martha Stewart
Martha Stewart
Martha Stewart is an American business magnate, author, magazine publisher, and television personality. As founder of Martha Stewart Living Omnimedia, she has gained success through a variety of business ventures, encompassing publishing, broadcasting, and merchandising...
’s defense in her own insider trading case
ImClone stock trading case
A U.S. Securities and Exchange Commission and U.S. Attorney probe of trading in the shares of ImClone Systems resulted in a widely publicized criminal case, which resulted in prison terms for media celebrity Martha Stewart, ImClone chief executive officer Samuel D...
.
International media, business, and finance industry observers have analyzed extensively his actions in aiding Rajaratnam. Consensus remains divided on the precise motivators of money, respect, and relationship, with The New York Times asking, “Why would people who seem to have it all — wealth, prestige, powerful jobs and infinite access to others with the same — risk that, and more, to provide inside information to the Sri Lankan-born billionaire?”Cohan, William D. “Why Is Enough Never Enough?”. The New York Times (blog). April 27, 2011. Rajaratnam's annual payments were estimated at less than 5% of Kumar's annual income (and just 1-2% excluding a one-time bonus), further raising the question of motivation.
Personal life
Kumar maintained a low personal and professional profile externally, though was friends with other leaders in technology and Indian business such as telecom mogul Sunil MittalSunil Mittal
Sunil Bharti Mittal , Punjabi: ਸੁਨੀਲ ਭਾਰਤੀ ਮਿੱਤਲ, born 23 October 1957) is an Indian telecom mogul, philanthropist and the founder, chairman and Group CEO of Bharti Enterprises...
.
He lived and worked for decades in New Delhi, New York, and Silicon Valley simultaneously. He had a Manhattan
Manhattan
Manhattan is the oldest and the most densely populated of the five boroughs of New York City. Located primarily on the island of Manhattan at the mouth of the Hudson River, the boundaries of the borough are identical to those of New York County, an original county of the state of New York...
apartment in the Time Warner Center
Time Warner Center
The Time Warner Center is a mixed-use skyscraper developed by AREA Property Partners and The Related Companies in New York City. Its design, by David Childs of Skidmore, Owings & Merrill, consists of two 750 ft towers bridged by a multi-story atrium containing upscale retail shops...
and a “housekeeper in Saratoga, California.”
Further reading
- Sharma, Amol and Joann Lublin. “A Star Partner's Galleon Arrest Shakes Up Ranks at McKinsey”. The Wall Street Journal. October 21, 2009.
- McDonald, Duff. “Galleon Scandal's Executive Conundrum”. CNN. October 23, 2009.
- McDonald, Duff. “Rajat Gupta: Touched By Scandal”. CNN. October 1, 2010.
- Duray, Dan. “Dealbook London Correspondent Scores Deal for Crisis Book”. The New York Observer. December 3, 2010.
- Lamont, James and Tom Burgis. “Elite Take Sides As Gupta Fights SEC Charges”. The Financial Times. March 8, 2011.
- Lattman, Peter. “On Tape, Galleon Founder Told of Possible Goldman Deals”. The New York Times. March 15, 2011.
- Lattman, Peter. “Rajat Gupta Charged with Insider Trading”. The New York Times. March 1, 2011.
- McCool, Grant and Dena Aubin. “McKinsey In Uncomfortable Rajaratnam Trial Glare”. Reuters. March 30, 2011.
- Rothfeld, Michael and Susan Pulliam. “Defense in Galleon Trial Bids to Discredit U.S.'s Star Witness”. The Wall Street Journal. March 16, 2011
- “Rajaratnam Lawyer, Key Witness Do Battle At Insider-Trading Trial”. Financial Alternatives. March 16, 2011.
- Raghavan, Anita. “Expert View On Galleon Insider Trading Trial”. NDTV. March 18, 2011.
- Van Voris, Bob, David Glovin and Patricia Hurtado. “Rajaratnam Lawyer Challenges Kumar’s Testimony on Insider Tips, Payments”. Bloomberg. Mar 16, 2011.