Whither justice for Satyam investors?

The Central Bureau of Investigation (CBI) has put the loss for the investors in the Satyam Computers scam at Rs 14,000 crore. The CBI figures have to be authentic as it has access to information and documents that ordinary citizens don’t have, so we can take these figures as the actual loss suffered by investors. Earlier the Midas Touch Invest-ors Association had put the loss of three lakh retail inve-stors at Rs 4,600 crore. They had based its figures on what the investors lost on the day that the shares collapsed to a one digit figure when Satyam Computers’ founder Ramalinga Raju confessed to fudging revenue and proift figures.

Looking for appropriate forum?
Midas Touch had gone to the National Consumers Re-dressal Commission to ask for this compensation on be-half of the retail shareholders but the commission thr-ew out the appeal saying th-at the shareholders were not consumers under the Consumer Protection Act. The association then went to the Supreme Court which said that it should go through the “appropriate forum.” But what is the appropriate forum? Where does it exist?

Not a normal market loss
The point that the shareholders have lost Rs 14,000 crore, according to the CBI, does not seem to have evoked any outrage from the government nor investor protection institutions like the Securities and Exchange Board of India. One admits that when you buy shares you can expect the normal ups and downs but here was a deliberate fraud committed for several years, in which the shareholders were the losers when the fraud was disclosed. Even if Sebi does not have any law to deal with this, it could at least throw its weight behind organisations fighting for compensation. Because unless you get down to fight you will not come up with solutions.

Why are institutional investors quiet?
What is very mysterious is that the financial institutions and corporate bodies that held nearly 80 per cent of the shareholding in Satyam Computers are not taking any action. They are custodians of the people’s money and this loss should have forced them to look for opti-ons of recovery. It was not a normal market loss. So whe-re does one go from the latest pronouncement of a Rs 14,000 crore loss estimated by the CBI? Whether shareholders can get compensation cannot be left to the discretion of the courts alone.

Class action suit
There is nothing even in the amended companies bill to deal with such a fraud. Midas Touch has proposed the inclusion of a provision of class action suit for investors to collectively get redressal as the shareholders in Enron did. The standing committee of Parliament on finance headed by Mr Murli Manohar Joshi is looking into the amended companies bill, after it has been seen by Parliament. Midas Touch has sent the committee a detailed proposal on the inclusion of the class action in the amended bill. It is hoped that the standing committee on finance does consider this seriously. It is a mockery and inexplicable as to why if everyone knows that the investors have lost why can’t there be means of compensating them? Granted that in the stock market some lose and some win., But this was not a normal stock market loss. It was a fraud perpetrated by the then promoter and admitted to by him. Surely there must be a way and a law to deal with such loss by frauds.