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Satyam case: Sebi to appeal against local court decision

January 27, 2009 16:33 IST

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The Securities and Exchange Board of India will appeal against the decision of a local Hyderabad court, which denied a day's custody of former Satyam [Get Quote] chairman B Ramalinga Raju and his brother Rama Raju to the regulator, the government said.

"With Sebi's application there were certain technical issues. Now they would appeal to the court again," corporate affairs minister Prem Chand Gupta told reporters.

Sebi, which is probing charges of insider trading in the Satyam case, sought a day's custody of Ramalinga Raju and Rama Raju, who are currently in judicial custody.

The regulator's request for a day's custody of the Raju brothers, however, was turned down by the sixth additional chief metropolitan magistrate on January 23.

Pointing out that Sebi would be filing an appeal against the order, Gupta said, "Sebi is very active and so is the Serious Fraud Investigation Office and Registrar of Companies."

Following the disclosure of fraud by Ramalinga Raju, the government superseded the board of Satyam and ordered inquiry into the scam by the SFIO. It also simultaneously ordered an inspection of accounts of eight related entities of Satyam by the RoC, Hyderabad.

Meanwhile, Sebi and CB-CID, an investigation wing of the Andhra Pradesh government, also started probe into the scam.

Ramalinga Raju, Rama Raju, former Satyam CFO Vadlamani Srinivas, and two executives of Satyam's auditors Price Waterhouse have been arrested by the CB-CID.

Snapping a 10-week declining spree, inflation rose to 5.60 per cent for the week ended January 10. Replying to questions on the progress of investigation by the SFIO in the Satyam case, corporate affairs minister P C Gupta said, "Everything is in process. Nobody is relaxing. We are equally concerned."

On the appointment of chief executive officer and chief financial officer of the company, he said, "The board is absolutely competent and will take a view on that."

The government had earlier appointed a six-member board to steer the company out of crisis. The new board, which is meeting for the fourth time in Hyderabad today, is expected to take crucial decisions.

The new board had appointed leading auditing firms KPMG and Deloitte to re-state the accounts of the company, whose founder chairman Raju admitted to fudging books of accounts.

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