SEBI allowed to quiz Satyam’s Raju brothers (Second Lead)

February 3rd, 2009 - 7:26 pm ICT by IANS  

Ramalinga RajuNew Delhi/Hyderabad, Feb 3 (IANS) The Supreme Court Tuesday allowed the market watchdog to grill Satyam Computer Services founder B. Ramalinga Raju and his brother B. Rama Raju over the Rs.70-billion accounting fraud - the biggest in India’s corporate history.The bench of Chief Justice K.G. Balakrishnan allowed a team of SEBI sleuths, headed by its general manager Sunil Kumar, to interrogate the Raju brothers in Hyderabad jail Feb 4-6.

The bench said Sunil Kumar would apprise the Chanchalguda jail superintendent in advance of the names of his subordinates and colleagues who would be accompanying him to interrogate the two.

The Raju brothers’ lawyer S. Bharat Kumar said in Hyderabad: “They (the brothers) will not challenge the decision. They will cooperate with SEBI in investigation.”

The two were arrested Jan 9, two days after Ramalinga Raju publicly confessed to the accounting fraud in Satyam, India’s fourth largest IT firm and a leading player in the BPO segment.

In judicial custody following their surrender to the local police, the two brothers are suspected to be evading a SEBI interrogation.

SEBI turned to the Supreme Court to interrogate the Rajus after several legal hurdles.

Appearing for the SEBI, Solicitor General Goolam E. Vahanvati said: “Here is a person, who is a self-confessed fraud. Here is a person, who has to be interrogated.”

“We are not even seeking his custody,” he said, urging the apex court to allow the market regulator to interrogate the two brothers.

A Hyderabad court on Jan 23 dismissed the SEBI’s plea for the Raju brothers’ interrogation. The Hyderabad magisterial court said the market regulator was not an investigative agency and was not entitled to interrogate suspects in criminal cases.

The SEBI then approached the Andhra Pradesh High Court, which has slated the plea for hearing Feb 9, frustrating the SEBI’s move to conduct a quick probe into the scam.

Suspecting that the two brothers might be misusing their judicial custody to obfuscate their role in the crime, the SEBI contended in its petition to the Supreme Court, “It appears that while being in custody, the Raju brothers are organising tampering with documents and destruction of the firm’s records.”

Explaining its role, the SEBI said it is “a statutory Body, constituted under the SEBI Act, 1992, to regulate the securities market and protect investors”.

Terming Satyam Computer Services’ accounting fraud as “most serious financial scam in country’s corporate history and having large-scale national and international ramifications”, the SEBI lawsuit said that “it is a specialised agency having necessary competence and expertise to probe frauds in securities transactions.”

Submitting that “a case of this magnitude has not arisen in the in the Indian corporate history till now,” the SEBI said: “As an expert body, it is its statutory duty to conduct a comprehensive and meaningful probe into the scam.”

Meanwhile, in Hyderabad, lawyer S. Bharat Kumar said he will move a fresh application Wednesday for the bail of the Raju brothers and former Satyam chief financial officer Vadlamani Srinivas before Sixth Additional Chief Metropolitan Magistrate D. Ramakrishna.

The judge earlier rejected the bail plea of the three and extended their judicial custody till Feb 7.

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