Lies, confessions & the law
Satyam Computer Chairman B. Ramalinga Raju must have felt relieved after shooting off a letter admitting financial wrongdoings to the IT giant’s board of directors and the SEBI.india Updated: Jan 08, 2009 01:25 IST
Satyam Computer Chairman B. Ramalinga Raju must have felt relieved after shooting off a letter admitting financial wrongdoings to the IT giant’s board of directors and the Security and Exchange Board of India (SEBI).
But the sense of relief is bound to be short-lived, as government agencies have already started investigation into the financial manipulations admittedly committed by Raju.
If Raju’s admissions of financial manipulations were true, he could be held liable for several offences under the Indian Penal Code (IPC) and the Companies Act, ranging from cheating, criminal breach of trust to forgery and falsification of accounts.
Some of these offences are cognisable and non-bailable and attract jail terms between three and seven years plus fine, depending upon the exact nature of the crime.
Noted criminal lawyer K.T.S. Tulsi said Raju can be prosecuted for several offences including forgery and criminal breach of trust. “Directors of a company are only trustees of the funds on behalf of the investors and they are supposed to act in accordance with the law,” he added. Tulsi said SEBI was the best agency to investigate the matter.
Diljeet Titus of Titus and Co, a leading law firm, said “the admissions by Raju that he falsified earnings and assets exposes Raju and his aides to both civil and criminal proceedings.” It will need accounting, tax and legal experts to handle this kind of case, he added.
While agreeing that Raju’s admissions would attract both criminal and civil liabilities, Supreme Court advocate Prashant Bhushan said the matter should be investigated by a specialised independent agency.
“The Government has created the Serious Fraud Investigation Office but that is not an independent body. It works under the Government and, therefore, is prone to political interference. It should have statutory backing and independence,” Bhushan added.
Tulsi, however, praised Raju for being courageous enough to let the skeletons out of the closet. “Indians rarely give in to the call of conscience. I am sure there have been even bigger corporate frauds but no candid admissions. It can work as a mitigating factor while awarding him punishment.”