Sebi orders probe,suspects unfair trade in Satyam shares

The Securities and Exchange Board of India (Sebi) will chart out a plan of action to make sure that the corporate frauds like Ramalinga Raju’s heist at Satyam are not repeated in the future. Sebi has also ordered an investigation into the affairs relating to buying,selling or dealing in the shares of the company. A Sebi team will reach Hyderabad tomorrow to probe the books of accounts. “I am sure there are many lessons to be learnt. It is something which requires our action on an urgent and also continuing basis,” said Sebi chairman C B Bhave on Tuesday. “Our main effort is to see that whatever facts are available with any regulatory agency,those are put out and investors know the truth. I am sure we will have to learn few lessons from this as we get through the facts,” he said. “We are also in touch with stock exchanges to see what will be the appropriate action,” he said. The market regulator suspects that in the last month,some marketmmen might have unfairly traded in Satyam shares and made handsome gains. “In the interest of investors and the general public,Sebi has decided to investigate into the affairs relating to buying,selling or dealing in the shares of Satyam and more particularly to ascertain whether the provisions of the Sebi Act and various regulations have been violated,” the regulator said a statement. Sunil Kumar A,has been appointed as the investigating authority to investigate the issue and submit a report. As the Sensex tanked steeply with the index heavyweight Satyam losing over 77% in value over the day’s trade,Bhave said that the event is of horrifying magnitude. “Something like this has happened for the first time in India so we are also in touch with ministry of corporate affairs on what all steps need to be taken,” said Bhave. Raju’s letter also raised serious questions over accounting and auditing standards in the country. “It was most surprising that cash balance that was non-existent got certified. The case raises the issue of authenticity of accounts that have been audited,” said Bhave. Last month questions were raised on corporate governance after Satyam failed to strike a deal with Maytas,in which the Raju family holds significant stake. The size of that deal at $1.6 billion made many experts raise their eyebrows whether they actually had that kind of money. However,no action had been taken against Satyam.