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Mumbai, Jan. 8 Several questions are being raised on whether the Satyam Chairman, who admitted to a Rs. 7,000-crore fraud in his company, is guilty of a cognisable offence or not, and if so why he has not been arrested or at least been detained for questioning so far.

It looks like the Central Government is indicating that law and order is a state subject; and the Government of Andhra Pradesh waiting for a formal complaint to be filed on the basis of which an arrest can be made, said a lawyer.

Satyam founder-head Mr. Ramalinga Raju could be prosecuted under the Companies’ Act, the Indian Penal Code or the SEBI Act, said a legal counsel who appears in several SEBI-related cases. It is surprising that this has not been done so far, he said.

There can even be a quick detention made for 48 hours without warrant under the Code of Criminal Procedure if a reasonable suspicion exists, he said.

Section 25 of the Securities Contracts (Regulation) Act says that notwithstanding anything contained in the above Code, an offence which is punishable under Section 23 of the SCR, shall be deemed a cognisable offence within the meaning of the Code.

Under Section 23 of the SCRA, a person under conviction is punishable with imprisonment for a term of up to 10 years and fine of up to Rs. 25 crore, or both.

The same punishment is provided for under Section 24 of the SEBI Act itself for offences under that Act. Under Section 11B of this Act, SEBI also has the powers to issue directions to replace the management of entities or to appoint administrators to troubled companies.

This means it is possible for SEBI _ which is empowered to proceed under the SCRA _ on prima facie evidence to file a complaint at a magistrate’s court or with the police, that can lead to Mr. Raju’s arrest, said a lawyer.

It is surprising that nearly two days have elapsed after admission of a massive crime, and that the alleged offender has still not been held for questioning, said lawyers.

More Stories on : Software | Corporate Governance | People | Economic Offences | Andhra Pradesh

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