Gujarat NRE Coking Coal’s new owners are being advised by a key player in what was, until recently, the biggest hedge fund insider-trading scandal in United States history.
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Rajiv Goel, who has worked as a strategic adviser for Jindal since September, has been in Wollongong in recent weeks while Gujarat’s new management trawls through the company’s finances and decides the future of its two Illawarra mines.
Last year, Goel was fined and sentenced to two years’ probation by the Manhattan Federal Court for his role in providing insider information to billionaire and head of the Galleon Group hedge fund, Raj Rajaratnam.
Galleon was one of the world’s largest hedge fund management companies before it closed in 2009.
More than 50 people have been convicted or pleaded guilty to charges stemming from the US government’s investigations into the vast insider trading ring related to Galleon.
Goel pleaded guilty to securities fraud and conspiracy in February 2010 before testifying against the hedge fund founder, who he met while attending Wharton business school in Philadelphia.
According to the FBI, Goel – a former executive at Intel Corporation – gave inside information to Rajaratnam about Intel’s ‘‘very positive’’ quarterly earnings in April 2007 before the company publicly announced its results.
‘‘Upon receipt of the inside information from Goel, Rajaratnam executed, and caused others to execute, securities trades,’’ the FBI said.
‘‘When Intel disclosed its quarterly earnings, Rajaratnam sold his stock and illegally earned over $2.4million.’’
Then, the FBI says, Goel continued to supply his friend with information about Intel’s investments ‘‘on multiple occasions’’ in 2008, which resulted in the billionaire earning more than $911,000.
A jury convicted Rajaratnam of 14 counts of conspiracy and securities fraud in 2011.
He is currently serving an 11-year sentence in a Massachusetts federal prison and was ordered to pay almost $60 million as well as a $10million fine.
He was also hit with a $92.8 million civil penalty, bringing the total monetary sanctions to $156.6 million.
According to a report by US business publication Bloomberg, Goel could have faced up to 25 years in prison for his role in the hedge fund scandal, but avoided a prison term after providing testimony that was crucial to the prosecution’s case against his friend.
The Mercury has confirmed Goel was in Wollongong, staying at the Adina Apartments on Market Street during October.
According to sources, he attended meetings between Jindal management and union officials during this time and appeared to be playing an advisory role to new Gujarat chairman and Jindal Australia boss Jasbir Singh.
It is understood Goel is no longer in Wollongong.
According to a report by Indian newspaper the Economic Times, Goel was appointed ‘‘a consultant with the group on strategic issues’’ for Jindal Steel in early September this year.
