 "Sebi order: What next for Satyam Raju? Will he pay up?")
Hyderabad: What next for Byrraju Ramalinga Raju? Will he be able to pay the massive penalty slapped on him by the Security and Exchange Board of India (Sebi)? The regulator of securities markets has ordered him and four erstwhile Satyam executives to pay a whopping Rs 1,849 crore with 12 percent of interest within 45 days. Sebi also banned Raju and the others for defrauding investors by publishing falsified annual results for 14 years from participating in the stock markets.
“It was like riding a tiger, not knowing how to get off without being eaten,” Raju had said a few years ago while referring to the widening gap between the real and artificial numbers in the company’s books. It seems the tiger has finally got hold of him. What a fall for a man who rubbed shoulders with the who’s who of the world and shared the dais with then US president Bill Clinton?
The penalty imposed by the Sebi is just the tip of the iceberg. Raju and others are facing a slew of charges by the Directorate of Enforcement (for round-tripping the funds), the Central Board of Direct Taxes (Income Tax department) and, of course, the CBI. Plus, the Sword of Damocles is anyway hanging in the form of cases by the Securities Exchange Commission (SEC) in United States of America.
Do Ramalinga Raju and the four others actually have so much of reserve cash to pay off to have the offence compounded? Even if his family members liquidate the entire stocks and property that is not under any attachment by any of the investigating agencies, can they mop up so much of money?
Raju’s first option would surely be to buy time by challenging the order of the Sebi in the Securities Appellate Tribunal (SAT). The Sebi took five and a half years to conclude that Raju and other indulged in falsification of books and hoodwinking of the investor community.
The SAT may not protract the case as long as Sebi did. Also, it all depends on what Raju would contend in his challenge, if he does it, before the SAT. For, he has no scope or opportunity to retract his own confession of 7 January 2009 that highlighted his act of commission of magnifying the profits and overstating the non-existent cash and bank balances. Raju’s family still has a sizeable chunk of shareholding in IL&FS Engineering, the erstwhile Maytas Infra. But this cannot be eyed by any investigation agency owing to legal insulations. If at all Raju has parked the “purportedly defalcated” funds within India, how would he have done it and how would he have legalized the amounts he had earned in his capacity as the chairman of Satyam Computer Services Ltd would become another case in point for the law of the land to launch action. If he has, as it has been largely believed by many commoners or spread by his detractors, siphoned off the funds to tax havens, there is no way he can now retrieve the same and pay the penalty.
Raju, in fact, had admitted that “the company’s balance sheet as of 30 September 2008, carried a non-existent cash and bank balance of Rs 5,040 crore, as against Rs 5,361 crore reflected in the books and an accrued interest of Rs 376 crore, which did not exist”.
The deposed chairman of the embattled entity admitted that for the same period, the company had reported a revenue of Rs 2,700 crore and an operating margin of Rs 649 crore as against the actual revenues and operating margin of Rs 2,112 crore and Rs 610 crore, respectively. This, in turn, had jacked up the artificial (non-existent) cash and bank balances by Rs 588 crore for the quarter. The forensic investigation too unearthed false reporting of human resources in terms of number of associates on the company’s rolls.
Possibly it is time for him to submit to the law of the land.
