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SEBI will get to question Rajus

business Updated: Feb 03, 2009 20:35 IST
Bhadra Sinha

Nearly one month after waiting to get its investigators interrogate the man behind India’s biggest corporate fraud, the Securities and Exchange Board of India (Sebi) made headway on Tuesday when the Supreme court came to its rescue. The matter had been dragging on in the Andhra Pradesh high court.

The regulator has got a chance to interrogate Satyam Computer Services founder Ramalinga Raju and his brother Rama Raju over the next three days. The Rajus are in judicial custody while they face a slew of charges under laws relating to corporate irregularities and insider trading.

A Supreme Court bench headed by Chief Justice K G Balakrishnan gave an ex-parte order (without issuing notice to the opposite side) and allowed Sebi’s petition after its counsel Solicitor General G E Vahanvati said interrogation and recording of their statements was necessary to verify facts as “documents were going out of the country.”

“Refusal to permit Sebi even to record the statements of the accused while in the custody is arbitrary, unreasonable and perverse,” read the petition.

The CJI’s bench ordered the Superintendent of Chanchalguda central prison to permit Board’s investigating officer Sunil Kumar to visit the jail.

Sebi has been trying to quiz the brothers since January 8, the day after Raju disclosed a Rs 7,800 crore fraud in Satyam. According to Sebi counsel Pratap Venugopal, the board had issued a show-cause notice to the Raju brothers following which their counsel sought time till January 10. “However, instead of appearing before us, Raju surrendered to the State (Andhra Pradesh),” Venugopal said.

The Andhra Pradesh State Criminal Investigation Department formally arrested Raju on January 9. Sebi moved the trial court to gain access to the Rajus. But the plea was rejected on technical grounds after the court held that Sebi wasn’t an investigating agency but a regulator.

Vahnavati clarified that the regulator was not seeking custody of the two, but only permission to quiz them.