In the decade-old Satyam case, the SAT today asked Sebi to pass a fresh order on fines against six entities including relatives of the erstwhile IT firm's founder B Ramalinga Raju, even as it upheld the regulator's decision that they violated insider trading norms.
They will remain barred from the securities markets till a fresh order is passed by Sebi, for which it has been given four months time by the tribunal.
In a majority order, the Securities Appellate Tribunal (SAT) however "quashed and set aside" the Sebi order against B Jhansi Rani, wife of Ramalinga Raju's brother Suryanarayana, as she had sold Satyam shares way back in early 2001 -- a year before insider trading norms were made applicable to relatives of the connected person.
Sebi, in its order passed in September 2015, had barred all appellants from the securities markets for 7 years and had also directed them to disgorge unlawful gains "jointly and severally" with Ramalinga Raju and his brother B Rama Raju.
Differing with the majority order passed by SAT Presiding Officer J P Devadhar and member C K G Nair, another member Jog Singh said he was not in favour of remanding "these matters at this belated stage and would like to give finality to a decade old matter".
Singh favoured upholding Sebi's order against five -- B Ramalinga Raju's mother B Appalanarasamma; his sons B Teja Raju and B Rama Raju Jr; brother B Suryanarayana Raju; and SRSR Holdings Pvt Ltd (company controlled by three Raju brothers).
In his minority order, Singh however quashed Sebi orders against Satyam director Chintalapati Srinivasa Raju; Chintalapati Holding, a company where he was shareholder and director; his father, late Anjiraju Chintalapati; and B Jhansi Rani.
The scam came to light when Ramalinga Raju, then Chairman of Satyam Computers, in January 2009 admitted to inflating the books of the company for several years to show artificial cash and bank balances.
Sebi subsequently carried out investigation which revealed that the books of Satyam were inflated during the years from 2001 to 2008. The regulator further launched a probe into alleged insider trading violations by Raju and other top officials of the company as also his relatives, followed by orders in 2014 and 2015.
The majority order said the Sebi order against eight (except Rani) "is upheld to the extent that the appellants were insiders under the PIT Regulations and that the appellants had pledged/sold the shares of Satyam when in possession of UPSI and thus, they have violated the Sebi Act and the PIT Regulations".
UPSI means unpublished price sensitive information and is key to Sebi's Prevention of Insider Trading (PIT) norms.
"However, the uniform restraint order passed against appellants and the quantum of unlawful gain determined against each appellant and the direction to disgorge the same jointly and severally with Ramalinga Raju and Rama Raju are quashed and set aside and restored to the file of the Whole Time Member of Sebi for fresh decision on merits and in accordance with law as expeditiously as possible and preferably within a period of four months from today," it said.
Sebi had passed an order in July 2014 against B Ramalinga Raju, B Rama Raju, and some top officials, wherein the two brothers were asked to disgorge Rs 543.93 crore made on sale of Satyam shares and an unlawful gain of Rs 1258.88 crore made by pledging the Satyam shares through SRSR Holdings.
The order was challenged by the two brothers before SAT, which upheld Sebi's decision that the two brothers had violated norms for prevention of insider trading and fraudulent trading practices, and that they were instrumental in manipulating the books of Satyam from 2001 to 2008.
However, Sebi's direction on disgorgement was set aside and remanded back to the regulator for passing fresh order on merits and in accordance with law.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)