'Rajat secretly served Rajaratnam's hedge fund'
Prosecutors in the insider-trading trial of Rajat Gupta have suggested he leaked information about Goldman Sachs to convicted hedge fund billionaire Raj Rajaratnam because he was secretly serving as an executive of his Galleon Group.world Updated: Jun 01, 2012 10:49 IST
Prosecutors in the insider-trading trial of Rajat Gupta have suggested he leaked information about Goldman Sachs to convicted hedge fund billionaire Raj Rajaratnam because he was secretly serving as an executive of his Galleon Group.
Indian-American Gupta quietly served as an executive of Galleon while also serving on the boards of Goldman Sachs and Procter & Gamble, a witness testified Thursday at the Manhattan federal court trial.
Ayad Alhadi, a marketer for Galleon between 2008 and 2009, told the court that he was called into Rajaratnam's offices a few days ahead of a big fundraising trip to the Middle East and was told that Gupta was the new chairman of Galleon International.
"I think I congratulated him," he said when asked how he responded to the news.
Alhadi and Gupta then went together to the Middle East, where they met with a slew of moneyed institutions - some of which were quite taken with Gupta and his ties to Goldman, the witness said.
Among their meetings were representatives of the Abu Dhabi Investment Authority, the Abu Dhabi Pension Fund, First Gulf Bank and the Abu Dhabi Investment Council (ADIC).
The ADIC promised to invest up to $75 million with Galleon within days of their meeting with Alhadi and Gupta.
Asked if an investment of this size after four days was common, Alhadi said "that's pretty uncommon".
An e-mail exchange about the National Bank of Abu Dhabi suggested that Gupta's Goldman ties were a selling point.
"When I told him of your affiliation with Goldman, he was extremely pleased," Alhadi told Gupta in an e-mail about the head of the investment unit, which was set to invest $1 billion in hedge funds over the next 12 months.
Prosecutors also told district judge Jed Rakoff Thursday that former Goldman Sachs Group CEO will be their next-to-last witness before wrapping up about June 6.
First Published: Jun 01, 2012 10:02 IST