Sebi asks Satyam promoters to disgorge Rs 1,800 cr

The regulator has asked the promoters to pay simple interest of 12% per annum

The Securities and Exchange Board of India (Sebi) on Thursday asked former Satyam Computer Services chairman B Ramalinga Raju and 10 others to disgorge wrongful gains of nearly Rs 1,800 crore. The regulator has asked these entities to pay simple interest of 12 per cent per annum –which works out to around Rs 1,500 crore – from January 7, 2009, within 45 days.

In a 39-page order, Sebi has fixed individual liability on entities that allegedly profited by dealing in Satyam shares while in possession of inside information.

Raju and brother Rama Raju will have to pay Rs 26.6 crore and Rs 29.54 crore, respectively. Other entities named in the order include Maytas India (now IL&FS Engineering), which has to pay Rs 59 crore and Chintalapati Srinivasa Raju, who has to pay Rs 136.64 crore.
 

Sebi said these entities made unlawful gain by selling and transferring shares “while in possession of unpublished price-sensitive information”.

THE SATYAM SAGA

• Jan ’09: B Ramalinga Raju, then chairman of Satyam, sends an email to Sebi confessing financial irregularities
• Jan-Feb ’09: Sebi conducts investigations into Satyam’s affairs; inspects its account books
• Mar ’09: Sebi issues show-cause notices to Raju, four others; follows these up with supplementary notices in June 2009 and March 2010
• Apr ’10: Raju’s advocates say he is in judicial custody and physically not in a position to meet his legal advisors or provide instructions to any person
• May ’10 to May ’14: Sebi issues 10 notices of personal hearings; the individuals concerned seek adjournment on each occasion
• May ’14: Sebi grants last opportunity of personal hearing; individuals again choose not to avail it
• Jul ’14: Sebi passes order barring Raju and four others from securities market for 14 years; asks them to disgorge Rs 1,850 cr of unlawful gains, with simple interest at 12% a year since 2009
• Sep'15: Sebi asks Raju, 10 others to disgorge Rs 1,800 crore plus 12% interest since January 2009

The Satyam scam came to light in January 2009, with an email to the regulator confessing to financial irregularities in the technology company. Cash and other bank balances of Rs 5,040 crore on the balance sheet were non-existent. Debt and interest positions were also falsified.

Sebi had passed a similar order against Raju and five other former Satyam executives in July 2014.