SEBI fines Satyam’s Compliance Officer Rs 5L

Regulator SEBI today imposed a penalty of Rs 500000 on G Jayaraman,Compliance Officer of the erstwhile Satyam Computer Services Limited for his failure to adhere to market regulations. “After taking into consideration all the facts and circumstances of the case... impose a penalty of Rs 500000 on the noticee (G Jayaraman) in terms of Section 15 HB of the SEBI Act...,” the Securities and Exchange Board of India 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 one0000000 rupees”. Jayaraman has been directed to submit the penalty amount within 45 days. SEBI had conducted an investigation pertaining to issues relating to insider trading in the scrip of Satyam in 2008-09. It had said that the company’s announcement on December 16,2008 to acquire Maytas Infra Limited and Maytas Properties Limited and the subsequent withdrawal of the proposal a day later,besides the confessions made by Satyam Chairman Ramalinga Raju in January 2009,were price sensitive information. The regulator said it was observed that certain employees and clients had sold Satyam shares between November 25,2008 and December 16,2008 till before the announcement. Besides,some 80 clients of the company sold shares before January 7,2009,on the eve of Raju’s confession about fudging of the accounts. The investigation had revealed that Jayaraman had allegedly violated the provisions of the Model Code of Conduct for Prevention of Insider Trading for Listed Companies during the investigation period by not closing the trading window when there was unpublished price sensitive information about the acquisition of MIL and MPL by SCSL. SEBI had initiated adjudication proceedings against Jayaraman and a show cause notice was issued to him in September this year. Jayaraman had replied to the show cause notice and given his version of events including stating that since there was no direction from the board of directors of Satyam to close the trading window,such a step was not carried out. After consideration of evidences,SEBI,in its order said “Even though the clause specifies that the compliance officer is to execute his responsibilities under the overall supervision of the board,yet the provision confers key responsibilities on the compliance officer per se,which cannot be overlooked.”