Ex-McKinsey chief Rajat Gupta quits as chairman of ISB

Former McKinsey chief Rajat Gupta, accused by the US Securities Exchange Commission of insider trading, on Monday resigned as chairman of the prestigious Indian School of Business (ISB), Hyderabad.

''Rajat Gupta has requested the ISB executive board to relieve him of his board responsibilities till his pending matter with the US SEC is resolved,'' the ISB said in a statement. The board will meet on April 2 to consider his request and the appointment of a new chairman. Gupta is unlikely to attend the meeting.

Last week, Gupta had announced he had taken 'leave of absence' from New Silk Route, a $1.4 billion PE fund founded by him. Earlier, he had quit from the boards of Genpact, American Airlines, Harman International, Procter & Gamble (P&G) and Goldman Sachs.

The SEC filed civil charges against Gupta, accusing him of passing sensitive information from P&G and Goldman Sachs to Sri Lankan-origin hedge fund executive Raj Rajaratnam. Gupta has denied the charges and has sued the US regulator, accusing it of unfairly depriving him of a jury trial.

Gupta along with another former McKinsey executive, Anil Kumar, had founded the ISB. Last week, Kumar pleaded guilty and testified in court that Rajaratnam had hired him in 2003 and paid $500,000 to his Swiss bank account in exchange for confidential information from McKinsey. Kumar had quit the ISB board last year.

But the business school had all these weeks stood by Gupta, pointing out in an earlier statement that Gupta's counsel had asserted that all the charges against him were baseless. ''The ISB community is confident that Rajat Gupta will be vindicated. He continues to be the chairman of the ISB executive board," the business school, ranking among the top-20 in he world, had said earlier.