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Thursday, Jan 08, 2009
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Business Daily from THE HINDU group of publications Thursday, Jan 08, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Regulatory Bodies & Rulings Markets - Stocks
Our Bureau Mumbai, Jan. 7 SEBI said it has appointed an investigating authority to look into transactions in the shares of Satyam Computer Services to determine if there have been violations of SEBI rules. Mr Sunil Kumar A., General Manager, will be in the investigating authority, said a statement from the regulator. It is learnt that a SEBI delegation, consisting of the new authority and three SEBI members each from the Chennai and Mumbai offices, is being despatched to Hyderabad to commence investigations. The probe will be done without issuing any notice to the persons being investigated, in the interest of the investors and in the public interest, said SEBI. Investigative and legal experts said SEBI investigations could only be limited as a search of documents would only reveal that there was inflation of revenues and operating profits or understatement of liabilities, something that Mr Ramalinga Raju has already admitted. “How the manipulation was done and where the money is can only be revealed by Mr Raju himself as nobody else had knowledge of the manipulation. This can only be determined by enforcement agencies such as the Income-Tax Department or the Enforcement Directorate,” said a legal expert. According to him, the immediate response of the authorities should be to freeze all the accounts and payouts of the promoter, his family and associated persons. Quarterly statements and disclosures on insider trading are anyway made to the stock exchanges, and it appears that no Government agency or department, authority or even the exchanges have studied or examined the disclosures, said one legal expert. If they had they might have had an inkling of what was happening, he said. “The purpose of filing itself appears to have been defeated.” However, if the disclosures made under the listing agreement with stock exchanges are false, the stock exchanges and SEBI can take action against the company. The shares of Satyam could be de-listed or trading suspended by the exchanges for obvious and glaring violations of the listing agreement. However, in the interest of protecting shareholders, they are unlikely to do so, said another regulatory expert. Another matter that might be looked into is if the new insider trading regulations would apply to lender to Satyam, IL&FS Trust Company, which sold Satyam shares over the last few days. This would depend on when the shares were pledged to IL&FS, said the regulatory expert. The new regulations say that an insider cannot make contrary transactions in a company within six months. IL&FS Trust sells 44.1 lakh Satyam shares Satyam shares fall 6% More Stories on : Regulatory Bodies & Rulings | Stocks | Satyam Computer Services Ltd | Software
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