Raju has it tough with Sebi

Feb. 4: The interrogation of Mr B. Ramalinga Raju by the Securities and Exchange Board of India (Sebi), which began on Wednesday, wou-ld have come as quite a change for the man who had it easy with CID officials.

Unlike at the CID questioning, where officials were not allowed to carry a pen and paper, where Mr Raju’s counsel were present throughout, and where questioning was restricted to an hour a day, Sebi officials proved to be tougher.

Mr Raju was grilled by a five-member team from the Sebi, led by Mr Sunil Kumar. Mr Raju’s counsel, Mr S. Bharat Kumar, was not allowed into the room. The questioning was primarily about alleged insider trading, sources said.

Sources said Mr Raju was mostly quizzed about transaction of Satyam shares in the last six months. It is learnt that Mr Raju answered most questions in the negative.

Jail officials said they provided a room with a table and few chairs for the exercise. According to sources, he was quizzed at the jail superintendent’s office. The questioning session began at 10.30 am and went on till evening with a one-hour lunch break thrown in.
Outside the jail, Mr Raju’s counsel, Mr S. Bharat Kumar, said the Sebi team had turned down his request to provide Mr Raju some documents. He said Mr Raju did not have documents to answer Sebi’s questions. He said they would question the validity of statements recorded by Sebi. It is learnt that Mr Raju was briefed by his defence lawyers on Tuesday on answering Sebi’s questions.

It is learnt that Mr Raju’s brother, Mr B. Rama Raju, will be interrogated on Thursday. Elsewhere, the two Pricewaterhouse officials, Mr S. Gopalakrishnan and Mr T. Srinivas were handed over to police custody at 10.30 am on Wednesday. The custody period will end at 4 pm on Thursday.

Satyam bosses sold most shares ahead of scam

SEBI is itching to go into the Satyam probe but all that it can do now is wait - wait for the courts to allow them to interrogate B Ramalinga Raju and gang and wait for police to give them access to the documents.

The SEBI lawyer says this will delay a probe into the truth behind the Satyam episode.

"For each and every document, we have to make an application to the court and take the permission of the court, then go through the papers. Naturally there will be delay investigation," says SEBI lawyer, Pradyumna Kumar Reddy.

SEBI says it is the best equipped to handle a financial accounting fraud involving a listed company.

"SEBI should be given all information first and SEBI should be allowed to probe," says Reddy.

And one of the key areas SEBI will go into is - Did the top management indulge in insider trading? Did they sell shares in bulk?

Ramalinga Raju sold over 14 per cent Satyam shares in the last eight years, bringing his holding down from 22.89 per cent to 8.27 per cent in September 2008.

And Raju was not alone. Network 18 has learnt that as many as 20 people from the Satyam senior management sold shares just before the Maytas deal happened in December 2008.

Among them were Satyam CFO Sriniwas Vadalamani and Board Director Ram Mynampati - who is now the interim CEO of the company.

According to sources, among the top management of the company:

*Srinivas Vadlamani sold 92,538 shares

*Ram Mynampati sold 7 lakh shares and 2.5 lakh American Depository Receipts (ADRs)

*Keshan Mehta 6.1 lakh shares and 1 lakh ADRs

*Pavan Kumar Maddali sold 5.2 lakh shares and 75,000 ADRs

*Manish Mehta sold 30,000 shares

*T Hari sold 13,000 shares

*Independent Director Vinod Dham sold 2,500 shares

Apart from the top management, some 16 senior vice-presidents also sold shares in considerable amounts, raising questions of corporate governance and insider trading. It makes it seem as if everyone in the top echlons of the company had an idea that India's biggest corporate fraud was round the corner.

Reliance Capital to Replace Satyam Computers in Nifty : Effective from January 12 2009

Breaking News : Reliance Capital to Replace Satyam Computers in Nifty : Effective from January 12 2009.

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- CNBC TV 18