Indian American star witness denies he was paid to get India business
Anil Kumar Indian American star witness denies he was paid to get India business
New York, March 17, 2011: Anil Kumar, star Indian American prosecution witness, has testified that he was rarely consulted by hedge fund tycoon Raj Rajaratnam and ex-Goldman Sachs Group director Rajat Gupta about the launch of a private equity fund investing in South Asia.
Taking the stand again in the biggest insider trading case in the US in decades Thursday, Kumar, a former McKinsey & Co. partner, denied a suggestion by Rajaratnam's lawyer that he was being paid for legitimate consulting work, including a role in the launch of New Silk Route.
"I did very little work in the beginning," Kumar said during cross examination in a New York court by John Dowd, who is defending Sri Lankan born co-founder of Galleon Group, charged with making $45 million from tips leaked by corporate insiders and hedge fund traders.
Kumar, who has pleaded guilty to leaking information about his clients to Rajaratnam, said he was rarely consulted by Rajaratnam and Gupta, who were among the financial backers of the new fund, about it.
"They treated me pretty poorly," Kumar said. "They treated me like I was irrelevant."
Kumar testified that he and Gupta, a former colleague of Kumar's at McKinsey, created a company called Mindspirit LLC in 2001 as a vehicle for their two families to make investments, not as a consulting company, as suggested by Dowd.
Dowd asked Kumar about his role in a $50 million investment that New Silk Route made with an Indian company to build telecommunications towers.
New Silk Route dropped a potential deal with Bharati Telecom, which was controlled by a friend of Kumar, and instead did the deal with Reliance Telecom Ltd., "the archenemy of Bharati," Kumar testified.
"It was an embarrassment for me," Kumar told the court.
When Dowd accused Kumar of "making up" facts in the courtroom and of trying to get "something for nothing" from the New Silk Route fund, in which he said he invested $1 million, Kumar replied: "I was not worth $2 billion like Rajaratnam."
Suggesting that Rajaratnam paid Kumar more than $1 million for legitimate work at the Galleon Group, Dowd showed the jury a Galleon investor presentation that named Kumar as an adviser to the fund.
He displayed an e-mail that showed Kumar helping to arrange meetings and secure deals in India for Rajaratnam.
Dowd also contended that Kumar was paid money by Rajaratnam for his involvement with another fund, Taj Capital, which was started by Rajaratnam and a group of investors that included Gupta.
"You were paid $1 million because of work you did for Galleon and Taj Capital," Dowd said.
Dowd presented records that showed the largest payment from Galleon for $1 million to Kumar was described as "consulting" in the hedge fund's books.
Kumar retorted: "I don't think they could have written that they paid for insider information in the records."
Kumar said he received no money for his time spent working on the Taj Capital fund, because the team had agreed he would be compensated only if he left McKinsey and joined the firm.
A former Intel executive, P. Alexander Lenke, also testified about how he gave inside information to Rajiv Goel, another former Indian American executive at Intel who has pleaded guilty to leaking earnings information about the chip maker to Rajaratnam....IANS