Nov. 7 (Bloomberg) -- Krish Panu, a managing partner at Galleon Group LLC, resigned from the board of software maker Concurrent Computer Corp. after the New York hedge-fund firm’s involvement in an insider-trading scandal.

Panu, who hasn’t been accused of wrongdoing, stepped down as of Nov. 5, Concurrent said in a regulatory filing yesterday. He was appointed to the Duluth, Georgia-based company’s board a year ago. Panu was also a director at PeopleSupport Inc. until the outsourcing company’s takeover by a unit of Essar Group.

Criminal complaints against Galleon founder Raj Rajaratnam said the hedge fund had regular access to inside information about PeopleSupport because Galleon held a 25 percent stake in the company and an unnamed Galleon managing director sat on its board. Prosecutors have called Galleon the largest insider- trading case involving hedge funds, with the illicit profits coming to as much as $53 million.

Panu left for India to attend to family issues and wasn’t available for comment, Cathy Wilson, his assistant, said yesterday in a telephone interview from Menlo Park, California. Kirk Somers, executive vice president of Concurrent, declined to comment.

Even without wrongdoing, any link to such a high-profile case would likely raise eyebrows on a board of directors, said Patrick McGurn, special counsel at proxy adviser RiskMetrics Group Inc. in New York.

“There’s a lot of reputational value attached and they need to take all the director’s actions into account,” said McGurn, who spoke generally and doesn’t have any connection to the case.

Silicon Valley Veteran

Panu joined Galleon in April 2008. Prior to that, he was chairman and chief executive officer of @Road Inc., which provided location, reporting and messaging services for mobile workers. He negotiated the sale of the Fremont, California-based company to Trimble Navigation Ltd. in 2006 for $496 million.

A resident of the Silicon Valley community of Los Altos Hills, Panu spent seven years at semiconductor maker Atmel Corp., where he served as a vice president. He also had sales and marketing stints at chipmakers Catalyst Semiconductor Inc. and Xicor Inc., and computer maker Datapoint Corp.

In 2007, Panu also set up the Panu Foundation, a non-profit that provides grants to educational institutions and health-care research, according to the Concurrent statement. The foundation had total assets of $1 million in 2007, according to the National Center for Charitable Statistics.

Panu received a bachelor’s degree in electrical engineering from Wayne State University. He also has two master’s degrees, in business and computer engineering, from the Detroit school.

Concurrent Shareholder

“Mr. Panu’s extensive experience in building successful technologies companies, combined with his knowledge of the investment community, is a tremendous asset,” Dan Mondor, chief executive officer of Duluth, Georgia-based Concurrent, said in a November 2008 statement announcing Panu’s appointment to the board. The company makes software for video-on-demand services.

Galleon was one of Concurrent’s largest shareholders at the time, Concurrent said in the statement. The hedge fund sold more than 533,000 shares of Concurrent, according to a June 30, 2009, regulatory filing. If it still held the stake today, Galleon would be the third-largest shareholder, based on data compiled by Bloomberg.

On Nov. 5, U.S. prosecutors charged 14 people, including hedge fund managers, lawyers and an ex-Galleon employee, as part of the probe into the alleged insider-trading scheme. That followed the arrests of Rajaratnam, 52, and five others, including International Business Machines Corp. executive Robert Moffat, on Oct. 16. Moffat stepped down from his position as senior vice president of the hardware division last week.

‘Galleon Designee’

Prosecutors allege that Rajaratnam traded on private information about PeopleSupport. A “Galleon Designee” provided information about PeopleSupport on or before March 12, 2008, discussing the company’s stock buybacks with Rajaratnam on his mobile phone, according to prosecutors. Through 2008, the two also discussed PeopleSupport’s revenue targets and whether a proposed takeover would benefit Galleon, according to the complaint.

In October of that year, Rajaratnam allegedly bought shares in the company for Rajiv Goel, an Intel Capital executive who was also charged in the case, according to the complaint. Earlier, PeopleSupport stock had dropped on concern that the takeover would fall apart. Rajaratnam allegedly told Goel it was “an opportunity for me to buy for you” because the deal would close by Oct. 31.

To contact the reporter on this story: Siddhartha Vaidyanathan in New York at svaidyanath3@bloomberg.net

Last Updated: November 7, 2009 00:01 EST