Sebi swings into action, orders probe into Satyam scrip

07 January 2009

The Securities and Exchange Board of India said it has ordered a public interest investigation into the buying, selling or dealing in the shares of Satyam Computer Services Ltd, to ascertain whether the provisions of the SEBI Act, 1992 and following Rules and Regulations made there under have been violated.

A SEBI team headed by Sunil Kumar, general manager will be heading out to the Satyam headquarters at Hyderabad early tomorrow morning to examine the books of Satyam and investigate into all the confessions made by chairman B Ramalinga Raju.

Earlier in the day, in a letter to the stock exchange, Satyam confessed to multi-fold fraud and padding up of profits, debtors and bank balances.

SEBI has launched an extensive probe under several Acts to find out if any violation has been committed. It will probe Satyam under Prohibition of Fraudulent and Unfair Trade Practices Act, Prohibition of Insider Trading Act, Substantial Acquisition of Shares and Takeovers Act and the Securities Contract (Regulations) Act.

There will be intensive probing about insider trading, especially concerning the recent block sale of shares. Satyam had pledged these shares to various financial institutions.
 
SEBI has also stated that it is further satisfied that in the interest of the investors and in public interest / securities market, no notice to the persons to be investigated should be given and therefore it is ordered that in terms of the provisions of the said regulations the above investigation may be conducted without such notice.

It shall be obligatory upon the persons being investigated to extend cooperation and furnish such information and material as may be required by SEBI.