Satyam scam: Sebi grants relief to 3 officials in modified order

In the Satyam Computer scam, Sebi Tuesday passed a partially-modified order with respect to the period of debarment from securities market and disgorgement of illegal gains made by three officials of the erstwhile IT firm.

The latest directions pertain to three officials -- Vadlamani Srinivas (ex-CFO), G Ramakrishna (ex-vice president) and V S Prabhakara Gupta (Ex-Head of Internal Audit) -- at the company.

In July 2014, the regulator passed an order against various entities, including the three officials, in the nearly Rs 90 billion Satyam scam. They were barred from the securities market as well as asked to disgorge illegal gains.

The three officials challenged the ruling at the Securities Appellate Tribunal regarding the calculation of amounts to be disgorged and the period of restraint from securities market. Then, the tribunal asked Sebi to make a fresh decision on the quantum of illegal gains to be disgorged and restraint period.

According to Sebi's order issued on Tuesday, Srinivas and Ramkrishna have been barred from the securities market for seven years while the ban on Gupta is for four years.

The debarment period would include the years of ban already undergone by these individuals.

While Srinivas has been ordered to disgorge Rs 156.5 million, Ramakrishna and Gupta have been directed to pay Rs 115 million and Rs 4.8 million, respectively along with 12 per cent annual interest from January 7, 2009 till the date of payment.

The scam came to light on January 7, 2009.

In July 2014, the watchdog barred erstwhile Satyam Computers' founders -- B Ramalinga Raju and B Rama Raju -- along with the three officials from the securities market for 14 years. Besides, they were together to disgorge Rs 18.49 billion worth of unlawful gains with interest.

Passing the order, Sebi Whole Time Member G Mahalingam said it would be come into effect from such date as would be directed by the Supreme Court.

"Till such decision of the Supreme Court, the noticees (three officials) shall continue to abide by their undertakings submitted to the Supreme Court in the ... appeals," Mahalingam said in the 27-page order.

The details about the appeals before the Supreme Court were not mentioned in the order.

With regard to period of restrain, the regulator said as employees holding senior level positions in Satyam, Srinivas and Ramkrishna played a role in operationalising the fraud masterminded by Ramalinga Raju and Rama Raju.

Noting that the role of Gupta was different and he did bring out three instances of lack of reconciliation in invoices but had to abide by the instructions of Ramalinga Raju as the latter was managing director of the firm.

The regulator said that it would be appropriate to consider the role of Gupta as 'less incriminating than that of Srinivas and Ramkrishna in timely detection of falsification of accounts.