SEBI team in Hyderabad jail to interrogate Raju bros

Hyderabad, Feb 04: Nearly a month after Satyam founder Ramalinga Raju was arrested after confessing to over Rs 7,000 crore fraud in the IT company, market regulator SEBI on Wednesday finally got its chance to interrogate the tainted ex-chairman. A five-member Securities and Exchange Board of India (SEBI) team this morning arrived at the Chanchalguda Jail in Hyderabad where Raju has been kept since his arrest by the Andhra Police last month.

SEBI will interrogate Ramalinga Raju and his brother Rama Raju for three days. The Supreme Court yesterday allowed the market regulator to interrogate the two Raju brothers. The SC granted permission to SEBI’s investigating officer to commence the questioning from today. The apex court also directed SEBI to intimate the jail authorities about the duration of the interrogation. SEBI’s investigating officer will question the two Rajus the presence of a prison official. According to sources, jail officials -- be it Superintendent, Deputy Superintendent or Jailer -- would remain along with the SEBI investigation team during the questioning.

A senior prisons official said a decision on providing a separate place for the interrogation or allow it to take place in the cell would be taken after reading the court order. The market regulator had on Monday filed a plea through Solicitor General GE Vahanvati and counsel Pratap Venugopal to the Bench headed by Chief Justice KG Balakrishnan to interrogate the Raju brothers.

With Raju continuing to elude SEBI even after spending weeks behind bars, the market regulator had moved the SC after the Andhra Pradesh High Court last week deferred to February 9, hearing on its request to quiz the tainted ex-chairman and his brother Rama Raju. SEBI had moved the High Court challenging a lower court order, which denied it permission to interrogate the Raju brothers, who were arrested by the state police on January 9 -- the day a SEBI probe team had summoned them to appear before it in Hyderabad. In its request to SC, SEBI had said that it was constrained to approach the apex court for urgent relief related to the most serious financial scam that had large-scale national and international ramifications. The Raju brothers, along with Satyam's former CFO Vadlamani Srinivas, are now in judicial custody.

A probe team from SEBI had landed in Hyderabad on January 8, a day after Ramalinga Raju disclosed the massive accounting fraud in the IT company. According to the market regulator, the High Court should have seen that the Raju brothers cannot use judicial custody as a shield to avoid probe by expert agencies. SEBI further said that just as police apply for custody, any other agency can also apply for access or custody and the same can be granted and the refusal to permit SEBI even to record the statements of the accused while in the custody was "arbitrary, unreasonable and perverse". According to SEBI, merely because investigations by different agencies like CID, Enforcement Directorate, Serious Frauds Investigation Office, Registrar of Companies etc may overlap, it cannot be said that they cannot investigate simultaneously pursuant to the power conferred on them under their respective statutes.