6 month jail term for Raju brothers in Satyam scam

As reported in The Hindu & Zee News, Special Court in Delhi sentenced Mr. Ramalingam Raju, founder of Satyam Computers and his brother Mr. Rama Raju, who was then Managing Director of Satyam Computers for 6 months jail and fined an amount of Rs 5 Lacs. This is the first judgment in the Rs.14000crore Satyam Computer accounting scandal which took place six years ago.

Cases were filed by the Serious Fraud Investigation Office (SFIO) of the Ministry of Corporate Affairs under the Companies Act. This case is touted as the biggest accounting fraud in the country.

Court also imposed fines of different amounts to 11 individuals who figured in the seven cases filed by the Serious Fraud Investigation Office. Highest fine payable in two months was for Krishna G. Palepu, a director then. A fine of Rs. 2.66 crore. However, court struck down one case and restricted the sentence to mere fine in two others.

All the accused, except Mr. Palepu, were present in the court when the verdict was pronounced by the judge K. Laxman. However, the operation of the imprisonment and fine was suspended for a month to enable the accused to appeal in a higher court.

The accused were awarded imprisonment for merely disclosing amounts of dividend remitted in foreign currencies without identifying the number of non-resident shareholders, failure to disclose information about payments to auditors on taxation and company law matters, lack of details about employees in balance sheets from 2003 to 2008 and giving distorted figures of profit and loss.

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