Court Issues Summons to Ramalinga Raju, Others in SEBI Case

Hyderabad: An economic offences court here has issued summonses to Satyam Computer Services founder Ramalinga Raju, his brother Rama Raju and three former senior executives among others, to appear before it on November 13 in connection with complaints by capital market regulator SEBI.

Based on two complains filed in August by the Securities and Exchange Board of India (SEBI) on alleged unfair trade practices adopted by Raju and alleged violations of the insider trading regulations committed by him and others, the court issued notices on Friday.

Earlier, the market regulator had slapped a penalty of Rs 1,849 crore plus 12 per cent interest per annum on them, besides banning the accused from the market for 14 years.

SEBI filed the complaints in the economic offences Court urging the court to punish the accused Raju brothers and CFO Vadlamani Srinivas, besides two former auditors of global auditing firm PWC, which allegedly helped perpetrate the country's biggest corporate fraud, among others.

B S Siva Prasad is standing counsel for SEBI.

According to SEBI complaints, the accused are punishable under Section 24 (a) under SEBI Act which carries punishment upto 10 years. The first complaint has eight people as accused and the other has 14 people and entities as accused.

On January 7, 2009, Raju, the then chairman of Satyam Computers had sent an email to SEBI, wherein he admitted and confessed to inflating the company's cash and bank balances, besides understating liabilities and other financial 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 info-tech firm.

The company was acquired by Tech Mahindra, then renamed as Mahindra Satyam and eventually it was merged with Tech Mahindra.

According to SEBI, Raju brothers made 'unlawful gains' to the tune of Rs 543.93 crore from sales of shares and Rs 1,258.88 crore, by way of pledging of some shares.