SEBI Issues Directive Demanding Satyam Scam Promoters to Return Rs 1,747 Crore

The Securities and Exchange Board of India (SEBI) issued a consequential order on November 30, addressing a fraudulent case involving Satyam Computers Services. Six entities implicated in the fraud, including prominent figures such as B Ramalinga Raju (ex-chairman of Satyam) and B Rama Raju (ex-MD), have been directed by SEBI to reimburse unlawful gains amounting to Rs 624 crore, along with a 12 percent per annum interest rate.

The total sum owed by these entities stands at approximately Rs 1,747.5 crore, with a deadline for repayment set in January 2024. This total encompasses an interest accrual of Rs 1,123 crore over a span of 15 years.

The specified entities named in SEBI’s order are B Ramalinga Raju, B Rama Raju, B Suryanrayana Raju (Brother of Ramalingam Raju), SRSR Holding Private Limited (an entity promoted by Satyam’s promoters), V Srinivas (ex-CFO), and G Ramkrishna (ex-Vice President – Finance).

This latest directive from SEBI follows the Securities Arbitration Tribunal (SAT) order on February 2, 2023. Prior to this, SEBI had issued a disgorgement order in the same case, which faced legal challenges in higher courts, including SAT and the Supreme Court.

Ananth Narayan G, Whole Time Member of SEBI, stated in the order, “I hereby direct that the Noticees shall disgorge the unlawful gain made by them calculated in Table No.19 of this Order, along with simple interest at the rate of 12 percent per annum from January 07, 2009, till the date of payment. As directed by the Hon’ble SAT vide its order dated February 02, 2023, the unlawful gain shall be borne individually.”

The individually calculated unlawful gains for the involved entities are as follows: Rs 20.43 crore for B Ramalinga Raju, Rs 20.43 crore for B Rama Raju, Rs 51.44 crore for B Suryanrayana Raju, Rs 518.36 crore for SRSR Holding Private Limited, Rs 9.58 crore for V Srinivas, and Rs 3.83 crore for G Ramkrishna. These figures do not include applicable interest.

It is imperative for the entities to settle this amount by the stipulated deadline to comply with SEBI’s order and avoid further legal ramifications. The regulatory body’s firm stance underscores its commitment to curbing financial irregularities and maintaining the integrity of the Indian financial markets.

SEBI’s resolute enforcement of the disgorgement order against the six entities involved in the Satyam Computers Services fraud case demonstrates the regulatory body’s unwavering commitment to upholding financial integrity within the Indian markets. The directive, issued on November 30, mandates the reimbursement of Rs 624 crore in unlawful gains, accompanied by a 12 percent per annum interest rate, resulting in a total liability of approximately Rs 1,747.5 crore. The specified deadline for repayment, set for January 2024, underscores the urgency for the entities, including key figures like B Ramalinga Raju and B Rama Raju, to comply with the directive and mitigate potential legal consequences.

SEBI’s action follows a prior order by the Securities Arbitration Tribunal on February 2, 2023, and reflects the regulatory body’s persistence in addressing financial irregularities. The Whole Time Member of SEBI, Ananth Narayan G, emphasized the individual responsibility of each entity in disgorging their calculated unlawful gains, reinforcing the gravity of the situation.

As these entities navigate the intricacies of legal challenges and adhere to the prescribed repayment schedule, SEBI’s robust regulatory measures underscore the significance of maintaining transparency, accountability, and ethical practices within the financial landscape of India. The conclusion of this case marks a pivotal moment in SEBI’s ongoing efforts to safeguard the integrity of the financial markets and promote investor confidence in the regulatory framework.

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