The Securities Appellate Tribunal (SAT) on Friday directed Sebi to pass a fresh order in the Satyam case with respect to the quantum of punishment given to the erstwhile company's founder B Ramalinga Raju and four others.
While agreeing with Sebi's finding that the individuals violated regulations, the tribunal also said the decision to uniformly restrain all the appellants from accessing the securities market for 14 years "without assigning any reasons is unjustified".
The tribunal's ruling has come on pleas filed by Ramalinga Raju, B Rama Raju, V Srinivas, G Ramakrishna and V S Prabhakara Gupta (appellants) against the Sebi's order passed in July 2014, wherein these individuals were barred from the securities market for 14 years.
Besides, they were asked to return Rs 1,849 crore in unlawful gains with 12 per cent interest.
In an order on Thursday, the tribunal said the decision of Sebi's Whole Time Member (WTM) in "uniformly restraining all the appellants from accessing the securities market for 14 years without assigning any reasons is unjustified".
Similarly, the quantum of illegal gains directed to be disgorged by each appellant is based on grounds which are mutually contradictory and also without application of mind, the tribunal added.
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"... We set aside the impugned order to the extent it relates to the period for which the appellants are restrained from accessing the securities market and the quantum of illegal gains directed to be disgorged by the appellants and remand the matter to the file of the WTM of Sebi for passing fresh order on merits and in accordance with law," it said.
The tribunal has asked Sebi to pass a fresh order preferably within four months.
Till passing of the fresh order by Sebi, the tribunal has directed the appellants not to access the securities market.
Back in January 2009, Ramalinga Raju had admitted to fudging the books of Satyam Computer Services.
According to the tribunal, it was established that the appellants were "instrumental/ involved in inflating/ manipulating the books of Satyam during the period from 2001 to 2008".
That information was a price sensitive information and while in possession of that unpublished price sensitive information, appellants had sold/ transferred shares of Satyam and made huge profits, it added.
In these circumstances, Sebi's conclusion that they violated provisions of Sebi Act and other regulations "cannot be faulted", the tribunal said in the order.
Further, the tribunal said the appellants' argument that Sebi's impugned order is violative of the principles of natural justice "cannot be accepted".