SEBI fines former Satyam official Rs5 lakh

The Securities and Exchange Board of India on Tuesday slapped a penalty of Rs5 lakh on G Jayaraman, compliance officer of the now defunct Satyam Computer Services, alleging that he condoned violation of insider trading rules.

Satyam, promoted by B Ramalinga Raju and his family, became notorious in 2009, when Raju confessed responsibility for what is considered the biggest corporate fraud in Indian history, said to be worth Rs14,000 crore.

SEBI conducted an investigation relating to insider trading in shares of Satyam in 2008-09. It revealed that the company's announcement on 16 December 2008 that it was acquiring Maytas Infra and Maytas Properties, its subsequent withdrawal of the said proposal, and the confessions made by Ramalinga Raju on 7 January 2009 was price-sensitive information.

"After taking into consideration all the facts and circumstances of the case ... impose a penalty of R5 lakh on the noticee (G Jayaraman) in terms of Section 15 HB of the SEBI Act," SEBI said said in an order.

Section 15 HB states that "Whoever fails to comply with any provision of this Act, the rules or the regulations made or directions issued by the board ... shall be liable to a penalty which may extend to Rs1 crore."

Jayaraman has been directed to submit the penalty amount within 45 days.

The market regulator said it was observed that certain employees and clients had sold Satyam shares between 25 November 2008 and 16 December 2008, just before the announcement.