Sebi slaps penalties on Ramalinga Raju and family in Satyam case

The Securities and Exchange Board of India (Sebi) issued a fresh order in the Satyam case on Thursday directing 10 entities linked to the main accused B. Ramalinga Raju, including his mother, son and brother, to disgorge more than Rs 1,800 crore worth of illegal gains made by them.

Besides, they will have to pay close to Rs 1,500 crore as interest on the disgorgement amount as the penalty has been levied with effect from January 7, 2009, the day Raju, founder-chairman of erstwhile Satyam Computer, admitted to the massive fraud in the accounts of the company.

The latest penalties for insider trading follows an earlier disgorgement order passed by Sebi last July which had barred Raju and four others from the markets for 14 years and also asked them to return Rs 1,849 crore in unlawful gains with interest. That order was against Raju himself, his brother B. Rama Raju (then managing director of Satyam), Vadlamani Srinivas (ex-chief financial officer), G. Ramakrishna (ex-vicepresident) and V.S. Prabhakara Gupta (ex-head of internal audit).

In Thursday's order, Sebi also fixed individual liability of Raju, his two brothers and other individuals and companies related to the promoter family. Sebi gave clean chit to IL&FS Engineering and Construction as it was found that the company was neither an insider in Satyam Computers and Maytas nor did it have access to the 'unpublished price sensitive information'.

A Hyderabad court had suspended the sentences of Raju and nine others in the accounting scam and granted them bail in May. Raju and the other co-accused had filed an appeal seeking suspension of their sentences and fines imposed on them. Raju and the other convicts were lodged in Hyderabad's Cherlapally Central Jail. The additional chief metropolitan sessions court, which tried the Satyam case, had sentenced Raju and others to seven years' rigorous imprisonment for criminal conspiracy and cheating, among other offences.

The counsel for Raju and others had submitted before the court that they had already served a "substantial part" of their imprisonment by spending 35 months in jail and requested for suspension of their sentences.