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SEBI has served on 10 entities linked to the Satyam scam — one of the biggest corporate frauds in India — a disgorgement order of ₹1,800 crore for making illegal gains from insider trading.
In addition, they will have to pay a penalty of nearly ₹1,500 crore as interest. The individuals named by SEBI are linked to the main accused B Ramalinga Raju, including his mother, brother and son.
Thursday’s order follows the SEBI order dated July 15, 2014, which had directed B Ramalinga Raju and B Rama Raju to disgorge the entire unlawful gain of ₹543.93 crore (for sale/transfer of shares) and ₹1,258.88 crore (for pledge of shares).
SEBI had issued showcause notices on June 19, 2009 and September 15, 2009 to the other entities and individuals including SRSR Holdings (controlled by Raju brothers), Maytas Infra (now part of IL&FS Engineering and Construction), Ramalinga Raju's mother B Appalanarasamma, his two sons — Teja Raju and Rama Raju Jr — and his brother Suryanarayana Raju.
SEBI found that SRSR Holdings had served as a front for promoter group and related entities to obtain funds through the pledge of shares of Satyam Computers.
On Thursday, SEBI directed SRSR Holdings Pvt Ltd to disgorge a wrongful gain of ₹1,258.88 crore. Others have been directed to disgorge jointly and severally unlawful gains of over ₹543 crore derived by sale and transfer of shares while possessing unpublished price sensitive information.
SEBI also banned the eight surviving entities for seven years from the securities market. This order comes into immediate effect and has been served upon depositories and exchanges for necessary action.
The Satyam scam became public in 2009 when the company’s chairman Ramalinga Raju confessed that the company’s accounts had been falsified by $1.47 billion. In February 2009, the CBI took over the investigation, and on April 10, 2015, Ramalinga Raju was convicted with 10 others.
“It has to be kept in mind that in respect of contraventions of relating to the insider trading, the violator should face the consequences otherwise the objects of the regulations and also of the regulatory jurisdiction would get defeated.
“In my view, the enforcement actions for such violations as found in this case should have effective deterrence,” Rajeev Kumar Agarwal, Whole Time Member, SEBI wrote in his 39-page order released on Thursday
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