SEBI forbid Ramalinga Raju, aides from accessing market
The Securities and Exchange Board of India (SEBI), on Tuesday, barred erstwhile Satyam Computer Serviceschairman B. Ramalinga Raju and its former top officials from accessing the securities market for 14 years, with immediate effect. SEBI also banned B. Rama Raju, ex-Managing Director, Vadlamani Srinivas, ex-Chief Financial Officer, G. Ramakrishna, ex-Vice President (Finance), and V. S. Prabhakara Gupta, ex-Head, Internal Audit of Satyam Computers Services, for the same period.
SEBI prohibited them “from buying, selling or otherwise dealing in securities, directly or indirectly or being associated with the securities market in any manner, whatsoever for a period of 14 years…. on account of their fraudulent acts, omissions and illegal transactions (in shares),” said Rajeev Kumar Agarwal, whole-time member of SEBI, in his order on Tuesday.
“The noticees have made unlawful gains,” in securities transaction, said Mr. Agarwal, adding, “I am of the view that no person can be allowed unjust enrichment by way of wrongful gain made on account of fraudulent manipulative and unfair activities and / or insider trading as found….. I, therefore, in exercise of the powers conferred under Sec.11 and 11 B of the SEBI Act, 1992, read with Securities Law (Amendment) Ordinance, 2014, direct the noticees to disgorge the wrongful gain made by them from their contravention… with simple interest at 12 per cent per annum from January 7, 2009, till the date of payment,’’ he order said.. They were asked to pay the amount within 45 days from the date of this order by way of demand draft drawn in favour of SEBI, payable at Mumbai.
Sale of shares
SEBI said that Ramalinga Raju and Rama Raju together gained Rs.543.93 crore by sale of shares and Rs.1,258.88 crore by pledging the shares. Further, the regulator said that Mr. Srinivas gained Rs.29.5 crore, Mr. Ramakrishna gained Rs.11.5 crore and Mr. Gupta amassed Rs.512.65 lakh from the sale of shares.
Penalsing them for insider trading, Mr. Agarwal said that “They took advantage of the high valuation which had been given to Satyam Computers by the market as they same was not aware of the true financial position of the company.