'US fund manager cleared of funding terrorism'

'US fund manager cleared of funding terrorism' COLOMBO (AFP) – Sri Lankan-born hedge fund billionaire Raj Rajaratnam was investigated for allegedly funding Tamil Tiger rebels, but there was no evidence against him, the Central Bank of Sri Lanka said Monday.
US authorities on Friday charged Rajaratnam, 52, with fraud after saying they had uncovered the biggest ever case of insider-trading by a hedge fund.
He was among several wealthy overseas Sri Lankans whose donations to a Maryland-based charity, the Tamils Rehabilitation Organisation (TRO), are suspected of making their way to the separatist Tamil Tigers.
"At the time Mr. Rajaratnam made the donations, the TRO was not banned by the Sri Lankan government, nor the US. It was a donation made in good faith," the central bank's investigations unit chief, D.K. Wijesuriya, told AFP.
The central bank is the leading investigating authority in Sri Lanka for all financial transactions that are suspected of breaching money-laundering laws.
The Liberation Tigers of Tamil Eelam (LTTE) are considered a terrorist organisation by Sri Lanka, the United States and the European Union. After decades of civil war, the government declared victory over the LTTE in May.
Wijesuriya said their investigations did not uncover any wrongdoing by Rajaratnam, who he said had given the money to the TRO for reconstruction work following the December 2004 Indian Ocean tsunami.
The TRO was outlawed in Sri Lanka in November 2007 and its assets were frozen a year later.
Sri Lanka's securities regulator said there were no probes on Rajaratnam's dealings in the island's tiny 10-billion-dollar bourse.
"None of his trades ever aroused our suspicion. This (the US charges) came as a surprise," the Securities and Exchange Commission director general, Channa de Silva, told AFP.
Federal prosecutors in New York charged Rajaratnam, founder of the Galleon Management hedge fund, with securities fraud and conspiracy to commit securities fraud.
Sri Lankan shares tumbled 3.1 percent in morning trade Monday on fears of economic fallout from the US case against Rajaratnam, who has substantial business interests on the island.
Rajaratnam, who had his primary education in Sri Lanka, is the world's 559th richest person according to Forbes magazine with a net worth of 1.3 billion dollars.
Sri Lanka's justice ministry thanked Rajaratnam last month for donating millions of dollars to rehabilitate child soldiers conscripted by the Tamil Tigers.

Hedge funds face insider trading scrutiny
By Kabir Chibber Business reporter, BBC News
When Raj Rajaratnam arrives on Monday morning to address the staff at his hedge fund's Madison Avenue offices in New York, the mood will probably be sombre.
On Friday, Mr Rajaratnam was charged with five others with carrying out $25m (£15.3m) in insider trading by the Securities and Exchange Commission (SEC).
It has been labelled the biggest hedge fund insider trading case in US history.
Despite efforts by the prosecutors, he is now free on $100m bail - the highest ever set by a US court.
Among the questions his staff ask, the first will probably be if it is true. The second might be: why?
Mr Rajaratnam is estimated to be worth about $1.3bn by Forbes magazine. Galleon, the hedge fund he founded, had managed up to $7bn in assets.
And the SEC has signalled that this is only the beginning, as authorities crack down on the secretive world of hedge funds.
Crackdown
"It would be wise for investment advisers and corporate executives to closely look at today's case, their own internal operations, and the increasing focus and scrutiny on hedge fund trading by the SEC and others," said Robert Khuzami, director of the SEC's enforcement division.
“ This case should be a wake-up call for Wall Street ” US attorney Preet Bharara
Hedge funds are largely unregulated pools of money that try to make money regardless of whether markets go up or down.
Their activities include betting on downward movements - known as shorting - which was blamed for exacerbating the financial crisis last year and temporarily banned by financial authorities.
Their size and backing by many of the world's largest banks make them some of the largest players in the financial world.
The reputation of hedge funds took a beating earlier this year when Bernard Madoff was jailed for 150 years for running a $65bn Ponzi scheme.
Soon afterwards, Mr Khuzami told the US Congress that the SEC had failed in its mission to protect investors. "It is a sobering and humbling experience," he said.
"We deeply regret our failure to detect the Madoff fraud and pledge to continue to fix the problems that contributed to this failure," he and acting director of exams and compliance John Walsh added.
Mr Rajaratnam's arrest is probably the first step as the SEC attempts to restore investor confidence.
Sri Lanka impact
The charges are an interesting twist in the life story of the 52-year-old Mr Rajaratnam.
Born in Sri Lanka, he was educated at the prestigious Wharton business school in Pennsylvania and went to set up a hedge fund for boutique investment bank Needham.
The hedge fund was spun off with Mr Rajaratnam at its head in 1997.
Galleon was well known for its extensive research reports, according to the New York Times, and for having many senior technology executives as its investors.
Mr Rajaratnam was investigated by the Federal Bureau of Investigation in 2007 for allegedly funding the Tamil Tiger rebel movement in Sri Lanka, the Central Bank of Sri Lanka said on Monday.
He was among several wealthy Sri Lankans who donated to the US-based charity, the Tamil Rehabilitation Organisation, which may have been funnelled to the Tamil Tigers.
"At the time Mr Rajaratnam made the donations, the TRO was not banned by the Sri Lankan government, nor the US," said DK Wijesuriya, the central bank's investigations unit head. "It was a donation made in good faith."
The central bank added that investigations are still ongoing into the matter and he had not yet been cleared.
Sri Lankan shares tumbled 3.1% on fears about the case against Mr Rajaratnam, who has substantial investments in the country.
Wider net cast
The other people arrested along with Mr Rajaratnam also hint at the scope of the authorities' ambitions.
They include Anil Kumar, a director at prestigious consulting firm McKinsey and Robert Moffat, of computer group IBM's systems and technology division.
Among the other hedge fund insiders charged are Rajiv Goel, a director of strategic investments at Intel Capital, the investment arm of microchip giant Intel.
All investors in Galleon, they are alleged to have secured inside information regarding firms including Google, AMD, and Hilton Hotels.
Hedge funds commonly hire lobbyists and other insiders as they seek to eke out every shred of profitable information about companies.
The SEC seems able and willing to go after the rest of Wall Street as it cracks down on hedge funds.
"Greed is not good," US attorney Preet Bharara told a press conference on Friday. "This case should be a wake-up call for Wall Street."
Story from BBC NEWS:Published: 2009/10/19 12:50:36 GMT
Raj Rajaratnam Became Billionaire Demanding Edge

By Katherine Burton and Saijel Kishan
Oct. 19 (Bloomberg) -- Every weekday at 8:35 a.m., Galleon Group’s 70 analysts, portfolio managers and traders pack into a conference room on the 34th floor of the IBM Building, a gray- green polished
granite skyscraper on New York’s Madison Avenue. Tardy arrivals are fined $25.
At the head of the table, Chief Executive Officer Raj Rajaratnam fires off questions to the staff of his $3.7 billion hedge-fund firm: Which companies’ margins are peaking? What would change your mind about
this stock? What’s the risk of that company failing to win an expected contract? The 52-year-old billionaire expects his analysts to have an edge: better information than anyone else, say people who have
attended the meetings.
U.S. prosecutors allege that Rajaratnam’s own edge was illegal. He was arrested on Oct. 16 at his home on Manhattan’s Sutton Place, charged with using inside information to trade shares including Google
Inc., Polycom Inc., Hilton Hotels Corp. and Advanced Micro Devices Inc., according to complaints. Five other defendants also were arrested in New York and California in a $20 million scheme that
prosecutors say is the largest-ever insider trading case involving hedge funds.
“Every trader wants an edge, and there are many gray areas when it comes to aggressive research,” said Ron Geffner, a lawyer at New York-based Sadis & Goldberg LLP, whose clients include hedge funds.
“But if you trade on material, non-public information that comes from a company insider who is breaching his fiduciary duty, odds are that it is illegal.”
559th Richest Person
Rajaratnam’s net worth of $1.3 billion makes him the 559th richest person in the world, according to Forbes Magazine, on par with the likes of hedge-fund manager Julian Robertson and investor Wilbur Ross.
Rajaratnam has invested in at least two New York City restaurants, Opia, in midtown Manhattan, according to people who know him, and Rosa Mexicano.
Galleon was among the 10 largest hedge funds in the world in the early years of this decade, and it managed $7 billion at its peak in 2008. It also was one of the three largest technology hedge funds along with
Lawrence Bowman’s Bowman Technology Fund, which closed in 2001, and Daniel Benton’s Andor Capital Management LLC, which shut down last year.
Galleon’s $1.2 billion Diversified fund has climbed 21.5 percent a year, on average, since 1992, according to a September marketing document from the firm, compared with 7.6 percent for the Standard &
Poor’s 500 Index of the largest U.S. companies. The fund has returned 22.3 percent this year, according to an investor letter.
Charitable Giving
As Rajaratnam’s wealth grew, he and his wife Asha Pabla, who have three children, created a family foundation and have given money to fight AIDS in India. They donated $5 million to help the 2004 tsunami
victims in his home country of Sri Lanka, where Rajaratnam was on vacation with his family when the disaster struck.
The foundation donated $400,000 in 2005 to the Tamils Rehabilitation Organization in Cumberland, Maryland, according to tax forms filed by the foundation with the Internal Revenue Service. Two years
later, the U.S. Treasury Department froze the assets of the charity, saying it was a front for the Liberation Tigers of Tamil Eelam, or LTTE, which the State Department had designated as a terrorist group 10
years earlier.
‘Thousands of Homes’
“His donation was responsible for rebuilding thousands of homes for Tamils, Sinhalese, and Muslims without discrimination,” Dan Gagnier, a spokesman for Galleon, said in an e-mailed statement.
Sri Lanka authorities will review “significant” transactions carried out by Rajaratnam, Channa De Silva, director general of the Securities and Exchange Commission of Sri Lanka, said in an interview today. The
agency will “collaborate” with foreign governments in their investigations.
“We don’t want a market glazed with investors of this reputation and will make every attempt to keep the Sri Lankan market clean,” De Silva said.
Born in Sri Lanka’s capital, Colombo, Rajaratnam was educated there at St. Thomas’ Preparatory School before leaving for England, where he studied engineering at the University of Sussex. He came to the
U.S. to get his master’s of business administration, graduating from the University of Pennsylvania’s Wharton School in 1983.
High-Tech Companies
His first job after graduation was at Chase Manhattan Bank, where he was a lending officer in the group that made loans to high-tech companies. In 1985, he joined Needham & Co., a New York-based
investment bank that specialized in technology and health-care companies. He started as an analyst covering the electronics industry and rose through the ranks, becoming head of research in 1987, chief
operating officer in 1989 and president in 1991. A year later, at 34, Rajaratnam started a fund, Needham Emerging Growth Partners LP, according to Galleon’s marketing documents.
Rajaratnam and Needham colleagues Krishen Sud, Gary Rosenbach and Ari Arjavalingam formed Galleon Group in January 1997. By the end of that year, they were managing $830 million, much of it from
technology company executives Rajaratnam had gotten to know throughout his career, according to “The New Investment Superstars: 13 Great Investors and Their Strategies for Superior Returns,” written by
Lois Peltz (John Wiley & Sons Inc., 2001).
Splitting Up
As the Internet bubble burst in 2000, the Galleon Diversified Fund climbed 43.7 percent in the three-year period through 2002, while the S&P 500 dropped 37.6 percent.
Galleon’s assets jumped to $5 billion by 2001, making it one of the 10 biggest hedge funds in the world. That year Sud, who was co-head of the firm’s health-care fund and who had been friends with
Rajaratnam since the two were classmates at Wharton two decades before, left to start his own firm, taking six employees with him.
Rajaratnam faces 13 fraud and conspiracy counts, many of which carry 20-year maximum sentences. Under federal sentencing guidelines, he faces 10 years in prison if convicted at trial, Assistant U.S.
Attorney Josh Klein said in court on Oct. 16.
Prosecutors also charged Rajiv Goel, who worked at Intel Capital as a director in strategic investments, Anil Kumar, who worked as a director at McKinsey & Co., International Business Machines Corp.
executive Robert Moffat, and former officials at Bear Stearns Asset Management Danielle Chiesi and Mark Kurland, who were affiliated with the firm’s $1 billion New Castle Partners.
Temporary Leave
Moffat ran one of five major businesses at IBM, the world’s largest computer-services provider, and reported to Chief Executive Officer Sam Palmisano. The Armonk, New York-based company placed
Moffat on temporary leave and Rodney Adkins was put in charge of his group on an acting basis, Edward Barbini, an IBM spokesman, said today.
Yolande Daeninck, a spokeswoman for McKinsey, said the firm is “distressed” by Kumar’s arrest. Chuck Mulloy, an Intel spokesman, said the company is investigating and has put Goel on leave.
At the hearing, U.S. Magistrate Judge Douglas Eaton in Manhattan set Rajaratnam’s bail at $100 million, to be secured by $20 million in assets and guaranteed by his wife and four others. Rajaratnam, who
gave up his passport, may not travel more than 110 miles from New York City.
$100 Million Bail
Klein asked Eaton to hold Rajaratnam in jail pending his trial. He said the hedge-fund manager had “enormous incentive” to flee to his native Sri Lanka or elsewhere. The prosecutor said there’s additional
evidence, there may be more charges against Rajaratnam and that the evidence is “overwhelming.”
Defense attorney Jim Walden said in court that prosecutors are misconstruing the evidence against Rajaratnam and that the case isn’t as strong as prosecutors allege.
Prosecutors say Rajaratnam traded on leaks from insiders at Polycom, Moody’s Investors Service Inc. and Market Street Partners. In another alleged scheme, Chiesi got tips from an unidentified person at
Akamai Technologies Inc. and from Moffat, according to one of the criminal complaints. These tips generated others, prosecutors said, as Chiesi passed them onto to Rajaratnam, who in turn gave Chiesi
inside information.
The government’s complaint quotes conversations between Chiesi and Rajaratnam, including a July 24, 2008, discussion that they allegedly had after she spoke to the person at Akamai. That day, Akamai
stock had closed at $32.18.
‘Gonna Guide Down’
“Akamai,” Chiesi told Rajaratnam, according to the complaint. “They’re gonna guide down. I just got a call from my guy.”
After Chiesi said that the company’s comments would bring the stock down to $25 a share, Rajaratnam replied that he would be “radio silent” and asked when Akamai would report, according to the
complaint.
Galleon said in an Oct. 16 statement after Rajaratnam’s arrest that the firm “continues to operate and is highly liquid.”
While there is no key-man clause that would allow investors to pull out based on Rajaratnam’s arrest, investors in the Diversified and Buccaneer’s Fund can withdraw their money on a quarterly basis with 45
days notice, according to marketing documents.
Galleon’s portfolio managers include Jeff Bernstein, who runs the Diversified Fund, and Leon Shaulov, the senior manager of the Galleon Buccaneer’s Fund, a short-term trading fund.
Retaining top managers and holding on to clients may prove challenging in light of the investigation, said Craig Lilly, a Palo Alto, California-based attorney at Squire, Sanders & Dempsey LLP, whose clients
include hedge funds.
“This may spell the end of the firm,” Lilly said. “They will probably face a tremendous wave of redemptions as well as brain-drain as senior people head for the exit door.”
Last Updated: October 19, 2009 15:20 EDT

Rajaratnam and the Tamil Tigers Connection
October 18, 2009 , 11:21 pm
Updated: As Zachery Kouwe and I report in The New York Times, Raj Rajaratnam, the hedge fund executive accused of leading a $20 million insider trading ring, has drawn scrutiny for donations he's given to his homeland of Sri Lanka.
More specifically, authorities have looked into millions of dollars in donations that apparently landed in the coffers of the Tamil Tigers, the violent separatist group that battled the Sri Lankan government for a quarter century until earlier this year.
A 2007 investigation into the American branch of the Tigers, formally known as the Liberation Tigers of Tamil Eelam, or L.T.T.E., turned up an "Individual B" who authorities say donated $2 million to the rebel group. People briefed on the matter, confirming a report in The Wall Street Journal, said that individual was Mr. Rajaratnam.
According to the complaint in the case (filed against Karunakaran Kandasamy, the purported head of the L.T.T.E.'s American wing) Individual B is described in a Tamil-language letter found by investigators as "among the people who provide financial support for our struggle for freedom." It also describes Individual B's "long lasting desire to meet and discuss with the National Leader" of the L.T.T.E., Velupillai Prabhakaran. (Individual B is mentioned on pages 10 through 12 in the complaint below, as well as page 22.)
That's not the only instance of Mr. Rajaratnam's money being examined. In 2005 and 2006, a charity he founded to help rebuild Sri Lankan homes after the devastating 2004 tsunami donated a total of $3.5
million to the Tamil Rehabilitation Organization, a charity law enforcement figures later accused of raising funds for the L.T.T.E. See the Internal Revenue Service documents here and here.
However, it's important to note that Individual B was never named in the complaint, and Mr. Rajaratnam was never charged in that case. It doesn't seem apparent that the L.T.T.E. case and the insider trading
charges are related.
Jim Walden, a lawyer for Mr. Rajaratnam, said in a statement that his client is not an L.T.T.E. supporter. Mr. Walden adds: "As everyone knows, Mr. Rajaratnam gave money to rebuild homes destroyed by
the Tsunami. His donation was responsible for rebuilding thousands of homes for Tamils, Sinhalese, and Muslims without discrimination. He obviously had the homes rebuilt, as they are standing today. Go see them."
Update 11:25 p.m. A spokesman for the Sri Lankan defense ministry tells The Financial Times that his country's government believes Mr. Rajaratnam was financing the "L.T.T.E. frontline organization" through several schemes. The spokesman did not elaborate.
- Michael J. de la Merced

Six charged in $20m insider trade case

By Joanna Chung in New York
Published: October 16 2009 16:21 Last updated: October 16 2009 21:41
Billionaire investor Raj Rajaratnam and present and former executives of Bear Stearns, IBM, Intel and McKinsey were charged on Friday in an alleged insider trading scheme that US prosecutors called the biggest ever involving hedge funds.
In a possible sign of escalating federal efforts to uncover white collar crime, Preet Bharara, US attorney in Manhattan, said the case marked the first time court-authorised wire taps – a traditional tool of investigators pursuing mob bosses and drug kingpins – had been used in a significant insider trading case.
Mr Bharara said the investigation, aided by an unnamed co-operating witness, was continuing. He said the charges “should be a wake up call for every hedge fund manager and every Wall Street trader and
every corporate executive who is even thinking about engaging in insider trading”.
Documents: Complaint against Rajaratnam et al
Complaint against Chiesi et alProsecutors claimed Mr Rajaratnam, founder of the Galleon hedge fund, and others used insider information from sources inside hedge funds, public companies, Moody’s Investors Service and an investor
relations firm to trade ahead of earnings announcements, acquisitions and joint venture deals.
The alleged scheme, which ran from 2006 until earlier this year, involved trades in companies including Google, IBM, Sun Microsystems and Hilton and produced profits of more than $20m, most of which
went to Mr Rajaratnam, according to federal prosecutors. The Securities and Exchange Commission, which brought civil charges, put the proceeds of the scheme at more than $25m.
Among those charged with trading on and providing tips were Mr Rajaratnam; Danielle Chiesi, an employee of New Castle, a hedge fund set up by Bear; and Mark Kurland, a New Castle executive who
formerly served as Bear’s head of research and asset management.
Some alleged offences occurred after Bear – and New Castle – were acquired by JPMorgan Chase in March last year. New Castle, which faces civil charges filed by the SEC, was separated from JPMorgan in late 2008.
Among those charged with providing inside information were Robert Moffat, a senior vice-president at IBM; Rajiv Goel, a director in strategic investments at the investment arm of Intel; and Anil Kumar, a director at McKinsey.
Mr Kumar said he was shocked by the complaint and emphatically denied all charges.
Moody’s said last night: “Moody’s has strict policies against divulging confidential information, and the alleged wrongdoing by an individual at Moody’s would be an egregious violation of Moody’s policies and values.”
Mr Rajaratnam, named this year as the 236th richest American by Forbes, was due to fly to London yesterday, according to court documents, with a return flight to New York from Geneva scheduled for October 22.

Wire taps used to fight white-collar crime

By Joanna Chung in New York
Published: October 16 2009 23:09 Last updated: October 16 2009 23:09
US prosecutors signalled a new aggressiveness in their pursuit of white-collar crime on Friday by revealing that they had used court-authorised wire taps in the investigation that led to the filing of insider trading
charges against hedge fund manager Raj Rajaratnam and five other people.
Preet Bharara, US attorney in Manhattan, warned that the “same powerful investigative techniques that worked so successfully with mob and drug cartels” would also be used in white-collar probes. He said
Friday’s case marked the first time wire taps had been used in a significant insider trading case.
“As the defendants in this case have now learned the hard way, they may have been privy to a lot of confidential corporate information but there was one secret they did not know: we were listening,” he said. “To the extent that it is possible to do in white-collar cases, we are going to do that.”
The criminal complaints filed yesterday against Mr Rajaratnam and current and former executives of Bear Stearns, IBM, Intel and McKinsey include transcripts of phone conversations recorded from both cell
phones and land lines. Prosecutors also used recorded conversations with an unnamed individual who became a co-operating witness for the government.
Yet there are questions about how frequently such tools will be used in future investigations.
“Electronic surveillance only works when the authorities are focusing on criminal activity as it unfolds,” said Daniel Richman, a former federal prosecutor. “In the white-collar area, that is rarely the case.”
John Coffee, a law professor at Columbia University, said Friday’s insider-trading case also highlighted the importance of securing cooperating witnesses.
“That is the hard part: getting the first witness,” he said. “Then, you can use him to divide and conquer the rest.”
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Sri Lankan tycoon held in hedge funds scam
The Hindu: B. Muralidhar Reddy
COLOMBO: The arrest by U.S. authorities on Friday of Sri Lanka-born Raj Rajaratnam, founder and head of the New York-based Galleon Management hedge fund, on charges of “vast insider trading” has
triggered alarm bells in the government and business circles of Sri Lanka.
Mr. Rajaratnam’s firm has a stake in all of the 10 top listed Sri Lankan companies. The island nation’s nearly $10 billion stock exchange is rated as being among the world’s best performing markets.
Observers here are of the view that the “scam” could have an adverse impact on Sri Lanka’s stock market and the economy which is showing signs of recovery after the military defeat of the LTTE in May.
Mr. Rajaratnam (52) was among six persons arrested on charges of securities fraud and conspiracy to commit securities fraud. In September this year, Justice Minister Milinda Moragoda told President
Mahinda Rajapaksa that Mr. Rajaratnam was willing to pay $1 million for the rehabilitation of LTTE child-soldiers. Foreign Minister Rohitha Bogollagama objected to the proposal on the ground that the
Foreign Ministry had given a dossier to the U.S. Treasury Department’s Directorate of Intelligence on Money Laundering which said Mr. Rajaratnam was involved in LTTE financing. In a report, The Wall
Street Journal quoted unnamed federal agents as saying that they uncovered documents showing Mr. Rajaratnam was among several wealthy Sri Lankans in the U.S. whose donations to a Maryland-based
charity made their way to the LTTE.

Raj’s arrest triggers panic in Lanka

Alleged Hedge-fund fraud in US By Feizal Samath

Sri Lankan-born billionaire businessman Raj Rajaratnam's arrest in the United States on Friday on an alleged US$ 20 million insider trading charges has hit Sri Lanka like a thunderbolt with not only the Colombo Securities & Exchange Commission(SEC) here scrambling to check whether his million-dollar dealings bordered on any illegality, but also high-level politicians under a cloud for involvement with him.
The US Attorney, Preet Bharara, announced Rajaratnam's company Galleon Group had as much as US$ 7 billion in assets. "This is not a garden variety insider-trading case", he told a news conference after
the arrest. "This case represents the largest hegde fund insider-trading case ever charged criminally".
In Colombo, news that his arrest by US federal agents who wire tapped his telephone calls by court authority sent the political establishment as well as the business community into a tail-spin. Cabinet Ministers
and former Cabinet Ministers with whom the US-based Sri Lankan fund manager had been talking were concerned if their names would come up in the investigations.
In September this year, Justice Minister Milinda Moragoda had told President Mahinda Rajapaksa that Rajaratnam was willing to pay US$ 1 million for the rehabilitation of LTTE child-soldiers. Foreign
Minister Rohitha Bogollagama had objected to the exercise saying that the Foreign Ministry had given a dossier to the US Treasury Department's Directorate of Intelligence on Money Laundering that
Rajaratnam is a front for LTTE finances.
Minister Bogollagama yesterday confirmed to the Sunday Times that he had objected to his Cabinet colleague's suggestion. The Justice Ministry later made a public announcement stating that Rajaratnam
would be giving this money.
Rajaratnam's tentacles into the Sri Lankan political mainstream extends to meetings with President Mahinda Rajapaksa and Opposition Leader Ranil Wickremesinghe. His business associates included frontline
Cabinet Ministers, past and present. Much of his Sri Lankan portfolio is managed by the son of a now retired multi-millionaire businessman of a blue-chip company and who is married to a Cabinet Minister's
sister.
The single largest known US contributor to a charity linked to the LTTE, the Tamil Rehabilitation Organisation (TRO), Rajaratnam was a major contributor to US Secretary of State Hillary Clinton's
campaigns.
Rajaratnam had given as much as US$ 3.5 million to the TRO. "The TRO passed off its operations as charitable, when in fact it was raising money for designated terrorist groups responsible for heinous acts of
terrorism," director of the Treasury Office of Foreign Assets Control at the time said.
The New York-based businessman has a stake in all ten of the top listed Sri Lankan companies.In the general sense of things we need to probe and find out whether any of the transactions Rajaratnam was involved were questionable, said an SEC official, who declined to be named. “There haven’t been
any issues in the past (over his investments) but due to the new developments it is incumbent on our part to look at these issues afresh”
Mr. Rajaratnam, is the single largest foreign investor in Sri Lankas stock market, investing millions in blue chips companies and lately in smaller firms. This has raised some eyebrows, according to stock market
analysts.
When he first began investing in 2002-03, it raised concerns on whether he was using funds indirectly raised by the LTTE, a charge he vehemently rejected.
US TV footage and newspaper pictures of Mr Rajaratnam being led by US agents in handcuffs would be the worst nightmare for any top corporate CEO and a “good” lessons for Sri Lankan corporate
bosses who get away scot free on similar issues, said a respected corporate CEO, who didn’t want to be identified. “That’s what is called democracy, where no one --the richest and the most powerful
included -- is above the law. That is governance in the real sense, not the kind of nonsense that is practiced here -- where everything is only on paper and annual reports,” he said.
But a Colombo executive, who has associated with the suspect, said it was unfair to condemn Mr Rajaratnam until “proven guilty” “He has invested heavily in the stock market here and also spent his own
funds on tsunami housing for the needy and recently gave a million dollars to a government project to rehabilitate LTTE cadres. This present issue has been brought upon by competitors and is a fall-out from
the global financial crisis,” the executive, who declined to be named, said, adding that, “instead of a trial by media, let’s wait for the legal system to ascertain whether he is guilty or not.”
Mr Rajaratnam, 52, was ranked No. 559 by Forbes magazine this year among the world's wealthiest billionaires, with a $1.3 billion net worth, according to AP news agency reports. He was among six hedge
fund managers and corporate executives arrested on Friday in a hedge fund insider trading case that US authorities say generated more than $25 million in illegal profits and was a wake-up call for Wall Street.
He was given bail at $100 million to be secured by $20 million in collateral despite a request by prosecutors to deny bail. The judge also ordered Mr. Rajaratnam, who has both U.S. and Sri Lankan
citizenship, to stay within 110 miles of New York City.
U.S. Attorney Preet Bharara told a news conference it was the largest hedge fund case ever prosecuted and marked the first use of court-authorized wiretaps to capture conversations by suspects in an insider
trading case. "Greed is not good," Mr. Bharara said. "This case should be a wake-up call for Wall Street." AP quoted Joseph Demarest Jr., head of the New York FBI office, as saying it was clear that "the
$20 million in illicit profits come at the expense of the average public investor."
In Colombo, the corporate world was stunned and officials at the companies and banks where the savvy US-educated investor has major stakes declined to comment. “He is an investor like anyone else,” said
one official, declining further comment.
According to latest available figures, Mr Rajaratnam, whose father -- J.M. Rajaratnam was the chairman of Singer (Sri Lanka) in the 1970s before being promoted to head the multinational's South East Asian
operation based in Bangkok, has a 9.2% stake in John Keells Holdings (JKH), his biggest investment upto date and, through two Galleon-related funds has 13% in People’s Merchant Bank (PMB) and 3.4%
in Commercial Bank.
Brokers in Colombo say that, Mr Rajaratnam, who began investing in the Sri Lankan bourse soon after the United National Party-led peace process began in 2002, has investments -- individually and through
the Galleon Fund group in the 10 top Colombo blue chips (biggest companies) which include DFCC, NDB, Dialog, SLT and Hayleys, though in some of these companies he has exited (sold his stock) in the
recent past.
His most recent, big investment was in Hemas Hospitals, and like in all other companies he has not sought a board (director) position, though, brokers say, many companies would have “loved” to have him on
board given his international status as a global investor.
“While there have been no issues with his investments in the big companies, there has been ‘talk’ in the market over his investments in smaller firms where the return (on investment) is lower,” one stock market
analyst said.
Mr Rajaratnam is the second Sri Lankan investor who made it big in the US to hit the headlines for the wrong reasons. In 2006, Sri Lankan-born Sanjay Kumar, former Chief of a California-based company
called Computer Associates International, was sentenced to 12 years in prison and fined US $8 million for securities fraud and obstruction of justice following a two-year investigation of an improper
accounting scheme. Some years back, Mohamed Muhsin, former World Bank Vice President in charge of IT, hit the headlines in the US media over allegations of impropriety during his tenure at the bank,
charges he has rejected.
The Sri Lankan suspect was a prominent speaker at the local CIMA business summit in June 2005, sharing the podium with well known personalities like former Malaysian Prime Minister Mahathir Mohamed
and cricket legend Imran Khan.
In an interview with the Sunday Times FT published on June 5, 2005, Mr Rajaratnam dismissed speculation that he had funded Tamil Tiger guerrillas. "I have funded orphanages in Mullaitivu, as much as I have
funded education projects in Kalutara. I funded Vanni Tech as much as I funded Sunera Foundation. I know there is speculation, but I don't worry about it one bit. When somebody is successful, apparently it
appears that no good deed goes unpunished. People don't understand philanthropy in this country.
“Here when you do charity people say that I have got political ambitions. I am very tenacious, so these statements are not bothering me," he was quoted as saying.
According to US news reports, also charged in the insider dealing scheme were Rajiv Goel, 51, of Los Altos, Calif., a director of strategic investments at Intel Capital, the investment arm of Intel Corp., Anil
Kumar, 51, of Santa Clara, Calif., a director at McKinsey & Co. Inc., a global management consulting firm, and Robert Moffat, 53, of Ridgefield, Conn., senior vice president and group executive at
International Business Machines Corp.'s Systems and Technology Group.
Mr Rajaratnam, like any US businessman, has contributed to political campaigns, the latest being $30,800 to Barack Obama and $4,600 to Hillary Clinton in the last presidential election. He lives in a $10
million condominium with his wife of 20 years, their three children and two elderly parents, according to the reports. Mr Rajaratnam has a degree from Britains University of Sussex and an MBA from the
Wharton School at the University of Pennsylvania. He founded Galleon Group in 1997 making it among the biggest hedge funds in the world.

பிரபல வர்த்தகர் ராஜ் ராஜரட்ணம் கைது

வீரகேசரி இணையம் 10/18/2009 10:35:33 AM -

வர்த்தக மோசடியில் ஈடுபட்டார் என்ற சந்தேகத்தின் பேரில் பிரபல அமெரிக்க தமிழ் வர்த்தகர் ராஜ் ராஜரட்ணம் கைது செய்யப்பட்டுள்ளார்.
உலக பிரபல்யம் பெற்ற கெலொன் நிறுவனத்தின் உரிமையாளரும், உலக செல்வந்த வரிசையில் 559ஆம் இடத்தை வகிப்பவருமான ராஜ் ராஜரட்ணம் நேற்றைய தினம் அவரது வீட்டில் வைத்து கைது செய்யப்பட்டுள்ளார்.
பங்குச் சந்தை மற்றும் நிதிச் சந்தை கொடுக்கல் வாங்கல்களின் போது மோசடியான முறையில் இலாபமீட்டியுள்ளதாக இவர் மீது குற்றம் சுமத்தப்படுகிறது.ராஜ் ராஜரட்ணம் இலங்கையைப்
பிறப்பிடமாகக் கொண்டவர் என்பது குறிப்பிடத்தக்கது.
2006ஆம் ஆண்டு முதல் 2007ஆம் ஆண்டு வரையில் இவ்வாறான சட்டவிரோத வர்த்தக நடவடிக்கைகளின் மூலம் 20 பில்லியன் அமெரிக்க டொலர் வருமானமாக ராஜ் ராஜரட்ணம் ஈட்டியுள்ளார்.
தமிழீழ விடுதலைப் புலி உறுப்பினர்களுக்கு மறுவாழ்வு அளிக்கவும் ராஜ் ராஜரட்ணம் நிதி உதவி வழங்கியுள்ளதாக சர்வதேச செய்திகள் தெரிவிக்கின்றன.