SC allows Sebi to question Raju

NEW DELHI: The Supreme Court today allowed Securities and Exchange Board of India (Sebi) to question Ramalinga Raju in the Satyam case.

The market regulator had approached the apex court after being denied permission by the lower courts in Andhra Pradesh to question Raju.

The apex court allowed Sebi to question Raju, his brother Rama Raju and ex-CFO of Satyam Srinivas Vadlamani at the Chanchalguda jail in Hyderabad. The questioning can be held over three days - from February 4 till February 6.

PTI adds: A bench headed by Chief Justice K G Balakrishnan directed the superintendent of Chanchalguda central prison to allow Sebi's investigating officer Sunil Kumar to question the Raju brothers.
Sebi had, since January 8, the day after Ramalinga Raju disclosed the Rs 7,800 crore fraud in Satyam, been trying to quiz the two brothers. The Rajus were arrested by the state CID on January 9, and since became inaccessible.
The regulator then approached a local court for permission to interrogate the Rajus, but the plea was rejected on technical grounds.
When the hearing of its appeal in the Andhra Pradesh High Court was repeatedly deferred, Sebi moved the apex court for "urgent relief."
The Supreme Court today also said that Kumar will intimate the jail authorities in advance as to who will be accompanying him for the interrogation of the Raju brothers.
Sebi would be probing if there was any insider trading angle to the fraud since Raju had disclosed falsifying profits for years, which would have helped inflate share prices.
Arguing on behalf of Sebi, Solicitor General G E Vahanvati claimed interrogation and recording of statement was necessary to verify facts as documents were going out of the country. He clarified that the regulator was not seeking custody of the Rajus, but only permission to quiz them.
The 6th Additional Chief Metropolitan Magistrate, Hyderabad, had refused permission on the ground that Sebi was not an investigating agency, and there was no provision in law under which it could interrogate the Raju brothers.
The Supreme Court today directed Sebi to also intimate the jail authorities about the duration of the interrogation. In its petition before the apex court, the regulator said
the high court should have seen that the Raju brothers cannot use judicial custody as a shield to avoid probe by expert agencies.