By S A Ishaqui
Hyderabad, Jan. 7: The outgoing Satyam Computers chairman, Mr Ramalinga Raju, and his colleagues may face a four-cornered inquiry for the fraud of over Rs 5,000 crore.
As per the law, Mr Raju will have to undergo a jail term of 10 years and will have to pay 500 times the amount as penalty if the charges are proved under Section 45 of the Securities and Exchange Board of India Act.
The Company Law Board and Registrar of Companies can initiate a suo moto inquiry on the basis of the statement given by Mr Raju on the inflation of funds in the company.
"The registrar of companies need not wait for a formal complaint as Mr Raju has already admitted his guilt," said Mr Veera Reddy, a senior advocate of the AP High Court. "A probe can be ordered under Section 235 of the Companies Act 1976."
Another advocate, Mr P. Subhash, said that Mr Raju’s statement also invited action under several provisions of the Indian Penal Code. It involves criminal breach of trust," he said. "Producing forged or fictitious documents for personal gains amount to criminal conspiracy."
Mr Subhash said police could launch an investigation based on Mr Raju's statement. "The police should book a case under Section 477 (a) of the IPC dealing with the falsification of accounts against the company and Mr Raju," he said.
In fact, Mr Raju’s statement also draws in the auditors and company secretaries into the ambit of the inquiry.
The Institute of Charted Accountants of India could initiate a probe into the role of the auditors in the alleged fraud.
"If the Institute does not initiate the probe, an investor can file a complaint, contending that he invested the money based on the audit report," said Mr V.V.L. Narasimham, a chartered accountant.
Mr Veera Reddy pointed out that the company secretaries could also face an inquiry for their role in the fraud. "The company directors can also come under the ambit of the probe under the Securities Contracts (Regulation) Act, 1956," he added.
Hyderabad, Jan. 7: The outgoing Satyam Computers chairman, Mr Ramalinga Raju, and his colleagues may face a four-cornered inquiry for the fraud of over Rs 5,000 crore.
As per the law, Mr Raju will have to undergo a jail term of 10 years and will have to pay 500 times the amount as penalty if the charges are proved under Section 45 of the Securities and Exchange Board of India Act.
The Company Law Board and Registrar of Companies can initiate a suo moto inquiry on the basis of the statement given by Mr Raju on the inflation of funds in the company.
"The registrar of companies need not wait for a formal complaint as Mr Raju has already admitted his guilt," said Mr Veera Reddy, a senior advocate of the AP High Court. "A probe can be ordered under Section 235 of the Companies Act 1976."
Another advocate, Mr P. Subhash, said that Mr Raju’s statement also invited action under several provisions of the Indian Penal Code. It involves criminal breach of trust," he said. "Producing forged or fictitious documents for personal gains amount to criminal conspiracy."
Mr Subhash said police could launch an investigation based on Mr Raju's statement. "The police should book a case under Section 477 (a) of the IPC dealing with the falsification of accounts against the company and Mr Raju," he said.
In fact, Mr Raju’s statement also draws in the auditors and company secretaries into the ambit of the inquiry.
The Institute of Charted Accountants of India could initiate a probe into the role of the auditors in the alleged fraud.
"If the Institute does not initiate the probe, an investor can file a complaint, contending that he invested the money based on the audit report," said Mr V.V.L. Narasimham, a chartered accountant.
Mr Veera Reddy pointed out that the company secretaries could also face an inquiry for their role in the fraud. "The company directors can also come under the ambit of the probe under the Securities Contracts (Regulation) Act, 1956," he added.
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