Hyderabad: The executive board of Hyderabad-based Indian School of Business (ISB) on Saturday chose Adi Godrej to be its second chairman after accepting the resignation of Indian-American Rajat Gupta, who is battling allegations of insider trading brought by the US market regulator.
”As the chairman of the Godrej group, Adi has a strong reputation as a business leader and is committed to an inclusive India,” ISB dean Ajit Rangnekar said after a board meeting that was followed by the school’s convocation ceremony. ”We welccome Adi as our new chairman.”
ISB’s founder-chairman Gupta, 62, the former chief of global consulting business McKinsey & Co., offered to resign as chairman of ISB after the Securities and Exchange Commission (SEC) accused him of having passed on confidential information on Goldman Sachs Group Inc. and Procter & Gamble Co. in 2008 and 2009 to hedge fund manager Raj Rajaratnam, founder of Galleon Group LLC.
The 62 year old, ”has requested the ISB executive board to relieve him of his board responsibilities till his pending matter with the US SEC is resolved,” ISB, ranked among the world’s top 20 business schools by the Financial Times of London, said on 21 March.
His successor at ISB was named on ISB’s 10th graduation day.
The SEC has accused Gupta, who founded ISB in 2001 together with McKinsey & Co. director Anil Kumar, of having passed on confidential information on Goldman Sachs and Procter & Gamble to Rajaratnam. According to the SEC, he disclosed information to Rajaratnam about a $5 billion investment in Goldman by Warren Buffet’s Berkshire Hathaway Inc. The tip-offs generated $18 million in profits or saved losses for Galleon, according to the SEC. Gupta, who has counter-sued the SEC, has denied the charges. He has resigned from the boards of Goldman, P&G and Genpact Ltd, among others.
The SEC allegations against Gupta, an alumnus of the Indian Institute of Technology-Delhi and Harvard Business School, came on top of the resignation in 2010 of Kumar from the board of ISB after he was accused of involvement in the insider trading scandal. He has pleaded guilty.
M. Rammohan Rao resigned as dean of ISB in 2009. He was an independent director of Satyam Computer Services Ltd, which was hit by India’s biggest corporate fraud after founder B. Ramalinga Raju confessed to having misstated accounts to the tune of Rs7,136 crore over a period of several years.