SC refuses to direct Sebi to cancel Satyam stock deals

The Supreme Court today refused to given any direction to market regulator Sebi, and the Bombay Stock Exchange to cancel transactions in the shares of scam-tainted Satyam Computer and Chennai-based entertainment firm Pyramid Saimira, as sought in a case of Public Interest Litigation.

The PIL, filed by Mohan Lal Sharma, a practising advocate, had sought cancellation of all the transactions between January 6 and 7 on the ground that innocent investors were lured by these companies on buyback announcements and a fraud was committed on them.

The petitioner's arguments failed to impress a Chief Justice K G Balakrishnan-headed bench, which said, "Make a complaint to Sebi. This is not an appropriate forum."

The advocate said on January 6 that the media had widely reported about Satyam proposing to buy back its shares and its decision to take up the issue in the board meeting.

According to him, before the decision was taken by the board, IL&FS had sold about 246.6 lakh shares in the market at Rs 176 per share.
However, the Satyam shares crashed to close at Rs 30 after Satyam Chairman Ramalinga Raju resigned from the board and confessed to the Rs 7,800 crore fraud, he added.

The petition further added that Pyramid Saimira, which was in the news recently for serious fraud allegations wherein the company was sent a forged letter of Sebi asking its co-promoter PS Saminathan to make an open offer to minority shareholders to buy 20 per cent at Rs 250 a share.

Various investors, including Sharma, had bought the shares following the receipt of the latter by the company.

Within one hour of disclosure, the shares went down to freeze at Rs 61.15 per share, he said, adding Sebi, NSE and BSE had failed to take any action to get the purchased shares cancelled.