The news of the arrest of Rajat Kumar Gupta in an insider trading case in the United States of America was heard in the corridors of the Indian School of Business amid hushed silence.

The $130-million world class premier Indian School of Business in Hyderabad, a brain child of Rajat Gupta, was nurtured by him and his other colleagues in McKinsey through the nineties and the last decade.

Rajat Gupta and another McKinsey executive Anil Kumar had, however, resigned from their positions at the ISB after they were accused of involvement in revealing the corporate secrets.

Gupta, who was the first non American to head the McKinsey Company was the founder chairman of the Board of governors at the Indian School of Business and played a major role in getting it international recognition by getting it affiliated to big names like Wharton, Kellog and London Business School.

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What made the ISB a unique model of its kind and the first world class business school in the country was that it was wholly financed and promoted by 50 top private companies of the country including Reliance, Mahindra and Mahindra and Godrej.

Gupta was key in bringing several national and international business leaders together to make this dream project a reality.

He was the focus of attention when the then Prime Minister Atal Bihar Vajpaee inaugurated ISB's ultra modern sprawling campus in Gahi Bowli area of Hyderabad.

Quoting extensively from the Vedas and reciting Sanskrit Shlokas Rajat had laid emphasis on producing world class leaders in India to meet the growing demand of Indian economy and also to promote Indian values and ethos in the world of business.

Again he was a huge draw when the then President of India A P J Abdul Kalam presided over the first graduation ceremony of the ISB in 2002.

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On Thursday, however, no faculty member or any other official was willing to offer any comment on the arrest of the same person. "It is a sad development. We are shocked. We hope that he will prove his innocence and come out clean," said one of the faculty members at the ISB on condition of anonymity.

Others said that as Rajat Gupta had already quit the ISB, they did not have any thing to say on the matter.

The reluctance of the staff to talk about the matter was understandable -- it was second time that the institution's name figured in major corporate scandal.

Earlier ISB's Dean Emeritus M Rammohan Rao, handpicked by Gupta had to quit in connection with the Satyam Computers scandal as Rao was the independent Board member of the company.

Similarly the tainted founder chairman of Satyam Computers B Ramalinga Raju had to resign as the member of the executive Board at the ISB.

However the staff members and students at the ISB recognised the pivotal role Gupta played in taking the ISB to an internationally reputed position where it became the only Indian business education institution to be recognised by the Financial Times as one of the top 20 global business schools.