Amid charges of insider trading by US regulators, Rajat Gupta, former Indian-American director of Goldman Sachs Group has taken a leave of absence from a $1.4 billion private-equity firm he co-founded.
Gupta voluntarily took the leave to “avoid any distraction and ensure New Silk Route’s continued focus on the execution of its investment strategy,” the New York-based firm said in a statement Thursday. The move is effective immediately.
Gupta, 62, started New Silk Route in 2006 with partners including Raj Rajaratnam, the billionaire hedge-fund manager who is on trial in New York court for insider trading.
The US Securities and Exchange Commission sued Gupta March 1, accusing him of passing on confidential information regarding Goldman Sachs to Rajaratnam.
“The matters involving Gupta have nothing to with New Silk Route or any of our portfolio companies,” Chief Executive Officer Parag Saxena said in the statement.
“The allegations relate to the US public markets, while New Silk Route is focused on investing in private companies in the Indian sub- continent.”
New Silk Route focuses on investments in South Asia, as well as the Middle East, and has offices in Mumbai, Dubai and Bangelore, India, according to its website. Gupta leads the firm with Saxena and senior adviser Victor Menezes.
Gupta, the former head of consulting firm McKinsey & Co, resigned last week from Cincinnati-based Procter & Gamble’s board. He had stepped down from Goldman Sachs’s board last year.
The SEC accused him of leaking confidential information about Berkshire Hathaway’s $5 billion investment in Goldman Sachs in 2008, as well as quarterly earnings for the New York- based bank and for Procter & Gamble. The tips generated more than $18 million, the regulator said.
Lawyers for Rajaratnam and Gupta have said their clients aren’t guilty. Gupta hasn’t been criminally charged.