SEBI officials grill Ramalinga Raju

Wednesday, February 4, 2009 at 8:02 am

Market regulator SEBI on Wednesday (February 4) began interrogating former Satyam Chief Ramalinga Raju after the Supreme Court gave a go ahead yesterday to grill the Raju brothers for three days in connection with the accounting fraud in the firm.

Earlier, a five-member SEBI team arrived at the Chanchalguda Central Prison in Hyderabad today to quiz Satyam Computer founder Ramalinga Raju and his brother Rama Raju. A State Prisons Official informed that he further said SEBI will be provided a place in the administrative block of the jail for interrogating the Raju brothers.

“We are going through the copy (of the order) and a decision will be taken on whether the SEBI interrogation will take place in the presence of a jail official — either a Superintendent, Deputy Superintendent or a jailor,” he added.

On Tuesday (February 3), a bench headed by Chief Justice KG Balakrishnan directed the Superintendent of Chanchalguda central prison to allow SEBI’s investigating officer Sunil Kumar to question the Raju brothers.

SEBI had since January 8, the day after Ramalinga Raju disclosed a Rs 7,800 crore fraud in Satyam, been trying to quiz the two brothers. But the Rajus were arrested by the state CID police on January 9 and since became inaccessible. The regulator then approached a local court for permission to interrogate the Rajus, but the plea was rejected on technical grounds.

When hearing of its appeal in the Andhra Pradesh High Court was repeatedly deferred, SEBI moved the apex court for “urgent relief.”

The Supreme Court had also said that Kumar will intimate the jail authorities in advance as to who will be accompanying him for the interrogation of the Raju brothers. SEBI would be probing if there was any insider trading angle to the fraud since Raju had disclosed falsifying profits for years — which would have helped inflate share prices.

Arguing on behalf of SEBI, Solicitor General G E Vahanvati had claimed interrogation and recording of statement was necessary to verify facts as documents were going out of the country. He clarified that the regulator was not seeking custody of the Rajus, but only permission to quiz them.

The 6th Additional Chief Metropolitan Magistrate, Hyderabad, had refused permission on the ground that SEBI was not an investigating agency and there was no provision in law under which it could interrogate the Raju brothers.

The Supreme Court had directed SEBI to also intimate the jail authorities about the duration of the interrogation. In its petition before the apex court, the regulator said that the High Court should have seen that the Raju brothers cannot use judicial custody as a shield to avoid probe by expert agencies.

“The judge ought to have seen Section 167 (2) Criminal Procedure Code which gives a magistrate power to authorise the detention of the accused in such custody as he thinks fit,” the petition filed through K J John and Co had stated.

“He can grant a remand either to judicial custody or custody of other agency like SEBI who are not police officers if the circumstances require and permit them to record the statements of the accused,” the petition stated, adding that SEBI has powers and obligations under the SEBI Act 1992 to investigate, “but is being thwarted at every stage”.

SEBI had further said that just as police apply for custody, any other agency can also apply for access or custody and the same can be granted and the refusal to permit SEBI even to record the statements of the accused while in the custody was “arbitrary, unreasonable and perverse”.

According to SEBI, merely because investigations by different agencies like CID, Enforcement Directorate, Serious Frauds Investigation Office, Registrar of Companies, etc may overlap, it cannot be said that they cannot investigate simultaneously pursuant to the power conferred on them under their respective statutes.

Complete coverage of Satyam Fiasco

(With inputs from Agencies)

( This post is from an independent writer. The opinions and views expressed herein are those of the author and are not endorsed by APakistanNews.Com.)

SEBI officials grill Ramalinga Raju

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