The Theranos trial for Elizabeth Holmes has officially begun with jury selection, and both Holmes and Ramesh "Sunny" Balwani are under the microscope. Balwani's own trial doesn't start until early 2022, but as the former president of since-dissolved Theranos, he plays a crucial role in the Department of Justice's investigation.
Ramesh Balwani set to look into the government's eyes once his own trial begins
Balwani is currently about 56 years old, nearly two decades older than his former girlfriend and colleague, Holmes. The Pakistani businessperson has a storied resume, working for the likes of Lotus Software and Microsoft before becoming president and COO of Theranos.
Bystanders expect prosecutors to question Balwani on the full story of his net worth during his trial to gauge how much he profited from the long-time fraudulent business. Some facts may come to light during Holmes's own trial, as she's expected to slam Balwani by testifying that he physically and emotionally abused her during the entire Theranos operation. Balwani was 37 when he met 18-year-old Holmes and started a business and personal relationship with her.
Ramesh Balwani's early net worth came from selling stake in a software product
In 1998, Balwani helped create a startup software product, CommerceBid. It was an early e-commerce platform that rolled out ahead of its time. By the following year, a business development software company called Commerce One purchased the product.
The acquisition went through in an all-stock deal. Balwani became a board member for the new operation. By mid-2000, he sold his entire stake in Commerce One, pocketing nearly $40 million in the deal. Commerce One went out of business shortly thereafter due to the dot-com bubble burst. Balwani got out in the nick of time.
Ramesh Balwani's Theranos profits a key factor in the fraud
By the time The Wall Street Journal exposed Theranos in 2015, investors understood that nothing Balwani or the company said could be trusted. Theranos claimed to bring in $100 million in revenue in 2014, though later audits showed that the number was actually $100,000.
Because the legitimate revenue was much lower than once proclaimed, the bulk of Balwani's profits likely came from institutional investors pumping capital into the Holmes-faced Silicon Valley startup. According to the SEC, Theranos raised over $700 million from investors, far exceeding any revenue metrics ever reached.
Ramesh Balwani's net worth has fallen with legal fees and business ostracization
Balwani has not worked since Theranos came under fire. With the trial just getting started, the former company president is facing prison time, which means he may never step foot in a boardroom again.
Additionally, Balwani—who has pleaded not guilty on all counts—has been fighting the Theranos battle since details about the scheme came to light in 2015. The Department of Justice indicted Holmes and Balwani in 2018—but even then, three years of legal representation comes at no small cost. Whatever remained of Balwani's $40 million net worth has likely dwindled.