The Supreme Court today allowed the Securities Exchange Board of India (SEBI) to examine the founder and ex-CEO of tainted Satyam Computer Services Ramalinga Raju and his brother and ex-MD B Rama Raju -- more than 20 days after the regulatory body has been moving the courts to gain access to the duo.
SEBI general manager Sunil Kumar and his associates have been given three days to meet the accused, who are in the Hyderabad central jail, starting tomorrow. The apex court today also said that Kumar will intimate the jail authorities in advance as to who will be accompanying him for the interrogation of the Raju brothers.
The SEBI team is expected to meet the superintendent of Central Prison at Chenchalguda in the early hours tomorrow and present the Supreme Court order, allowing it to record the statements of Raju brothers and former chief financial officer Srinivas Vadlamani. The interrogation will be conducted at the jail in presence of defence counsel.
The regulatory body had been trying to interrogate the two brothers since January 8 -- a day after Ramalinga Raju confessed to the Rs 7,800-crore fraud. The duo was arrested by the state CID police on January 9. The regulator first approached a local court for permission to interrogate them, but the plea was rejected. SEBI's appeal was not successful in the high court either, as it adjourned the hearing of the plea till Feb 9.
A bench headed by Chief Justice K G Balakrishnan passed the order when Solicitor General G E Vahanvati, representing SEBI, sought an urgent order from the court as the "whole system was in jeopardy and documents are going out". At this rate the authorties would not be able to get to the bottom of the scam, the counsel argued.
The petition moved by SEBI argued that regulators are expected to take urgent steps. The counsel argued that the stand of the magistrate in Andhra Pradesh and high court that Sebi was not an investigating agency was not only "perverse in law" but would make the whole system "a laughing stock". SEBI has powers under Section 11(c) of the SEBI Act to investigate frauds. "We are not asking for the custody of the accused. We only want to interrogate them and record their statements," Vahanvati clarified.
The high court could have intervened in public interest because of the wide ramifications and extent of fraud, exercising its constitutional powers, stated the petition. But it delayed the process by insisting that the Rajus should be heard before passing its order. Thus the accused persons are getting immunity by placing themselves in judicial custody, the petition stated. The SEBI counsel insisted that according to criminal procedure law, any relevant investigating agency had a right to examine the accused.
In a related development, the sixth additional metropolitan magistrate in Andhra Pradesh granted police custody of Price Waterhouse (PW) partners and auditors S Gopalakrishnan and Talluri Srinivas for two days from February 4. The custody of the duo was sought by the Crime Investigation Department (CID) of AP. Price Waterhouse is the former statutory auditor of the IT company.
The magistrate has dismissed the bail petition of the PW auditors, who were arrested on January 24 on charges of colluding with Ramalinga Raju in fudging the company's accounts. Gopalakrishnan is PW's chief relationship partner and Talluri its engagement leader. Talluri signed the last Satyam audit report on behalf of PW.
The court also reserved the orders on the bail plea of SRSR Holding general manager V Gopalakrishnam Raju for February 6. This is the second bail plea that has been filed before the court after the arrest of Gopalakrishnam Raju. The prosecution is of the view that he has played a key role in various land deals done by the Satyam founder and his family.
"Gopalakrishnam Raju is associated with many of the over 300 companies floated by Raju clan. He was also the director of Maytas Properties," the public prosecutor argued, adding that police are now investigating on what motivated him to transfer the documents. The judge reserved the orders for February 6.
Defence lawyer S Bharath Kumar said the bail petition for Raju brothers and Vadlamani will be filed afresh tomorrow.
