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Raju may face up to 10 years jail term
By siliconindia
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Thursday, 08 January 2009, 20:52 IST |
28 Comments
Hyderabad: B. Ramalinga Raju, who Wednesday morning shocked the corporate India by confessing to a 
65.92-billion ($1.3 billion) fraud in Satyam Computers, may face up to ten years' imprisonment if proven guilty, as per Section 23 of the securities contract regulation Act 1956. Even legal experts opine that the $1.3 billion fraud may take him inside the bars for minimum of seven years.
Under the Act, directors and management executives who violate the listing agreement by making false and inaccurate disclosures in the company's quarterly and annual results are liable for a penalty of imprisonment up to 10 years and fine up to Rs 25 crore. Moreover, senior counsel with the Delhi High court,Geeta Luthra told IANS, "The chairman will be prosecuted for cheating, criminal conspiracy and misappropriation and can face up to seven years in prison. It's highly likely that forgery will also be established."
Raju resigned as the chairman of the Hyderabad-based IT firm after admitting to committing perpetrated irregularities in Satyam's balance sheet for "last several years".
The statement has disclosed a wider criminal conspiracy, which could draw prosecution under the Indian Penal Code, Companies Act, IT Act, SEBI Act and even Foreign exchange Management Act.
Raju can also face prosecution in accordance to the IT Act, 2000, for forging and doctoring electronic book of accounts, Pawan Duggal, a Supreme Court advocate specialising in cyber law, said.
According to retired Delhi High Court justice Rajinder Sachar, the 54-year-old Raju will have to pay monetary damages that could amount to as much as three times the loss suffered by the company.
Although Raju cleared the rest of the Satyam board of abetting in the scandal, the legal community is of the view that the board of directors may not be given the benefit of doubt.
"It is highly unlikely that the board of directors was unaware of the misappropriations. Even if it can be established that the scam went on for several years without their knowledge, they will face the consequences according to the company's law," Duggal said.
"It's impossible that the board was unaware of the happenings, it is the board's duty to oversee the financials of a company, they will have to face the flak for the loopholes," said Luthra.
65.92-billion ($1.3 billion) fraud in Satyam Computers, may face up to ten years' imprisonment if proven guilty, as per Section 23 of the securities contract regulation Act 1956. Even legal experts opine that the $1.3 billion fraud may take him inside the bars for minimum of seven years.
Under the Act, directors and management executives who violate the listing agreement by making false and inaccurate disclosures in the company's quarterly and annual results are liable for a penalty of imprisonment up to 10 years and fine up to Rs 25 crore. Moreover, senior counsel with the Delhi High court,Geeta Luthra told IANS, "The chairman will be prosecuted for cheating, criminal conspiracy and misappropriation and can face up to seven years in prison. It's highly likely that forgery will also be established."
Raju resigned as the chairman of the Hyderabad-based IT firm after admitting to committing perpetrated irregularities in Satyam's balance sheet for "last several years".
The statement has disclosed a wider criminal conspiracy, which could draw prosecution under the Indian Penal Code, Companies Act, IT Act, SEBI Act and even Foreign exchange Management Act.
Raju can also face prosecution in accordance to the IT Act, 2000, for forging and doctoring electronic book of accounts, Pawan Duggal, a Supreme Court advocate specialising in cyber law, said.
According to retired Delhi High Court justice Rajinder Sachar, the 54-year-old Raju will have to pay monetary damages that could amount to as much as three times the loss suffered by the company.
Although Raju cleared the rest of the Satyam board of abetting in the scandal, the legal community is of the view that the board of directors may not be given the benefit of doubt.
"It is highly unlikely that the board of directors was unaware of the misappropriations. Even if it can be established that the scam went on for several years without their knowledge, they will face the consequences according to the company's law," Duggal said.
"It's impossible that the board was unaware of the happenings, it is the board's duty to oversee the financials of a company, they will have to face the flak for the loopholes," said Luthra.