Satyam scam: Sebi gives partial relief to co’s ex-CFO, ex-VP, ex-audit head

In the Satyam Computer scam, Sebi on Tuesday passed a partially-modified order with respect to the period of debarment from securities market and disgorgement of illegal gains made by three officials of the erstwhile IT firm. The latest directions pertain to three officials -- Vadlamani Srinivas (ex-CFO), G Ramakrishna (ex-vice president) and VS Prabhakara Gupta (Ex-Head of Internal Audit) -- at the company. The officials In July 2014, the regulator passed an order against various entities, including the three officials, in the nearly Rs 9,0000000000 Satyam scam. They were barred from the securities market as well as asked to disgorge illegal gains. The three officials challenged the ruling at the Securities Appellate Tribunal regarding the calculation of amounts to be disgorged and the period of restraint from securities market. Then, the tribunal asked Sebi to make a fresh decision on the quantum of illegal gains to be disgorged and restraint period. The officials were banned earlier for 14 years from the securities market. According to Sebi's order issued on Tuesday, Srinivas and Ramkrishna have been barred from the securities market for seven years while the ban on Gupta is for four years. The debarment period would include the years of ban already undergone by these individuals. Previously, Srinivas, Ramakrishna, and Gupta had been asked to disgorge unlawful gains of Rs 29.50000000, Rs 11.50000000 and Rs 51.2600000 respectively. As per the new order, Srinivas’s amount has been almost halved to Rs 15.650000000, and Gupta’s amount has been reduced slightly to Rs 4800000 along with 12% annual interest from January 7, 2009 (when the scam came to light) till the date of payment. There is no relief for Gupta as far as the amount is concerned, but technically he can start investing in the market again because the Sebi order says that the ban period will be calculated from the time the order was first passed in 2014. Besides, they were together to disgorge Rs 1,8490000000 worth of unlawful gains with interest. Passing the order, Sebi Whole Time Member G Mahalingam said it would be come into effect from such date as would be directed by the Supreme Court. "Till such decision of the Supreme Court, the noticees (three officials) shall continue to abide by their undertakings submitted to the Supreme Court in the ... appeals," Mahalingam said in the 27-page order. The details about the appeals before the Supreme Court were not mentioned in the order. With regard to period of restrain, the regulator said as employees holding senior level positions in Satyam, Srinivas and Ramkrishna played a role in operationalising the fraud masterminded by Ramalinga Raju and Rama Raju. Noting that the role of Gupta was different and he did bring out three instances of lack of reconciliation in invoices but had to abide by the instructions of Ramalinga Raju as the latter was managing director of the firm.