Apex court to hear SEBI plea to quiz Satyam chief
The Supreme Court will Tuesday hear the market regulator's plea to allow it to interrogate Satyam Computer Services' tainted chief B Ramalinga Raju about the Rs.70-billion accounting fraud in the firm.Updated: Feb 02, 2009, 21:16 IST
The Supreme Court will Tuesday hear the market regulator's plea to allow it to interrogate Satyam Computer Services' tainted chief B Ramalinga Raju about the Rs.70-billion accounting fraud in the firm.
Appearing for the Securities and Exchange Board of India (SEBI), Solicitor General Goolam E. Vahanvati apprised a bench of Chief Justice KG Balakrishnan of the market regulator's lawsuit filed in the apex court registry and sought an early and urgent hearing on it.
The bench, which also included Justice P. Satahsivam, acceded to the request to hear the lawsuit Tuesday.
The SEBI has moved the Supreme Court against a lower court order, which on Jan 23 dismissed its plea to help it access Satyam founder and former chief B. Ramalinga Raju and his brother B. Rama Raju in Hyderabad jail.
The two are in judicial custody since Jan 9 following their surrender to the Andhra Pradesh police for their alleged role in the accounting fraud of the firm that led to devaluation of its market capital from Rs.15 billion to Rs.2 billion in less than a month.
The Hyderabad magisterial court dismissed SEBI's plea, saying that the market regulator was not an investigative agency empowered to interrogate suspects in criminal cases.
Against the magisterial court's order, the SEBI approached the Andhra Pradesh High Court, which, however, has slated the plea for hearing on Feb 9, frustrating the SEBI that wants to conduct a quick probe into the scam.
Suspecting that the Raju brothers might be misusing their custody with the police to obfuscate their role in the crime, the SEBI's lawsuit said, “It appears that while being in custody, the Raju brothers are organising tampering with documents and destruction of firm's records.”
The SEBI has sought the Supreme Court's direction to the jail superintendent to allow its investigators to interrogate the Raju brothers, pointing out: “SEBI is a statutory body, constituted under the SEBI Act, 1992, to regulate the securities market and protect investors.”
Terming the Satyam fraud as “most serious financial scam in the country's corporate history and having large-scale national and international ramifications”, the SEBI lawsuit said: “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 Indian corporate history till now”, it said: “As an expert body, it is the SEBI's statutory duty to conduct a comprehensive and meaningful probe into the scam.”