Mumbai: Facing a Sebi order to cough up Rs1,849 crore plus interest for making ‘unlawful gains’ in Satyam scam, the erstwhile IT major's founder-chairman B Ramalinga Raju and four others have approached the Securities Appellate Tribunal against the market regulator.
The Tribunal has listed all the five pleas, filed separately, for hearing tomorrow to consider their 'admission'. Closing five-and-a-half year long probe into the country's biggest corporate fraud, Sebi on July 15 barred erstwhile Satyam Computer's then Chairman B Ramalinga Raju and four others from markets for 14 years and asked them to return Rs 1,849 crore worth of unlawful gains with 12 per cent interest resulting into total disgorgement amount of over Rs 3,000 crore.
Others facing the prohibitory orders include Raju’s brother B Rama Raju (then Managing Director of Satyam), Vadlamani Srinivas (ex-CFO), G Ramakrishna (ex-vice president) and V S Prabhakara Gupta (Ex-Head of Internal Audit).
A Sebi order can be challenged before the SAT within 45 days of the directions being passed. While the two Raju brothers filed their present appeals against Sebi order on Friday, Srinivas, Ramakrishna and Gupta moved their respective pleas a few days earlier. As per Sebi's order, the money was asked to be deposited with the regulator within 45 days, while interest would be levied at 12 per cent per annum with effect from January 7, 2009, the day this mega-scam came to light through a letter written by Raju himself.
The disgorgement amount can exceed Rs 3,000 crore after taking into account the applicable interest payments. In its 65-page order, Sebi said these five persons "have committed a sophisticated white collar financial fraud with pre-meditated and well thought of plan and deliberate design for personal gains and to the detriment of the company and investors in its securities".
The regulator, which had exercised the powers given to it through promulgation of an ordinance for passing disgorgement orders, further said that the "financial frauds as found in this case are inimical to the interests of the investors in securities and endanger the market integrity". Later last month, a new law was notified to replace this Ordinance with Securities Laws Amendment Act, which has amended three key securities market Acts to grant greater powers to Sebi to take on fraudsters and other market manipulators.
Sebi's Whole-Time Member Rajeev Kumar Agarwal said in his Satyam order: "I am convinced that this is a case where befitting enforcement action is necessary to send a stern message to the market to create an effective deterrence."
