After the Satyam Computer scam came to light, the government had ordered an auction for sale of the company. (Reuters)
Closing five-and-a-half year long probe into the country’s biggest corporate fraud, Sebi today barred erstwhile Satyam Computer’s founder 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 interest.
The money needs to be deposited with Sebi 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 the light through a letter written by Raju himself.
The others in theSatyam Computer Services Ltdscam 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 VS Prabhakara Gupta (Ex-Head of Internal Audit).
In its 65-page order, effective immediately, 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 has 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”.
Sebi’s Whole-Time Member Rajeev Kumar Agarwal said in his 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.”
On January 7, 2009, Raju – the then Chairman of Satyam Computer – had sent an email to the Sebi, wherein he admitted and confessed to inflating the cash and bank balances of the company, besides understating liabilities and other financial mis-statements.
After the fraud came to the light, the government had ordered an auction for sale of the company in the interest of investors and employees of what was known at that time as the country’s fourth largest IT firm.
The company was acquired byTech Mahindra Ltd, then renamed as Mahindra Satyam and eventually it was merged with Tech Mahindra.