SEBI says Ramalinga Raju may have indulged in insider trading

M. Rajeev

Regulator’s petition to be taken up in the High Court on Thursday

HYDERABAD: The Securities and Exchanges Board of India (SEBI) on Wednesday said there were several allegations against former Satyam Chairman B. Ramalinga Raju, including a strong likelihood of insider trading prior to January 7, the day on which he released his confession letter.

In a petition filed in the Andhra Pradesh High Court seeking its permission to record statements of Mr. Ramalinga Raju and his brother B. Rama Raju, SEBI said serious irregularities were alleged to have been committed the two brothers in violation of security laws, including fraudulent and manipulative practices.

SEBI said the two brothers were facing charges of fabrication of bank statements and diversion of monies of Satyam to fund real estate deals of Maytas Infra and Maytas Properties besides siphoning off money to finance businesses of several other sister concerns or ghost companies run by Mr. Ramalinga Raju’s kith and kin.

While SEBI summoned the brothers on January 9, they sought a day’s time, leading to adjournment of the proceedings till January 10. “As a strange coincidence, they were arrested on January 9 night ,” SEBI said adding that they were remanded to judicial custody that was being extended from time-to-time.

As the accused were in judicial custody and beyond its reach, SEBI sought permission for recording their statements that was not opposed by the CID, but Mr. Ramalinga Raju and Mr. Rama Raju opposed it raising “untenable contentions.”

Making the Home Department, the CID and the Chanchalguda Central Jail Superintendent as respondents, the petition contested the Magistrate’s observation that SEBI had no right to appear before the court under Sec. 11-C except for permission for search and seizures. It claimed that the Magistrate “erred” in holding the SEBI’s investigating authority who filed the application as not authorised by SEBI Chairman.

Solicitor General of India G. Vahnavati will argue on the SEBI’s petition in the High Court on Thursday.

Meanwhile, the High Court Registry raised preliminary objections regarding the maintainability of such writ petition.

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