The arrest and judicial remand of Ramalinga Raju, his brother and the Chief Financial Officer of the Satyam Computer Services Limited might be the start of an effective legal process to bring to justice the self-confessed perpetrator of the biggest corporate fraud in Indian history. However, the latest developments cannot obscure the inordinate delay on the part of the Andhra Pradesh government in setting the law in motion and going after those who have committed grave cog nisable offences that have an international dimension. Journalists, legal experts, investors, and politicians have raised the question why it took almost two-and-a-half days for the State police to act, after the main perpetrator incriminated himself (even if, as some experts suggest, his defence lies in his self-incrimination). In crimes of this nature and magnitude, it is essential that the investigating agencies move swiftly to collect the evidence before anyone has a chance to tamper with it and to demonstrate (as high-minded jurists tend to say) that ‘howsoever high you may be, the law is above you.’ The explanation that the State police were hampered by the absence of a formal complaint does not wash. After all, the offences admitted were cognisable under the Indian Penal Code. The impression that the State government was reluctant to enforce the criminal law and moved only under the pressure of the news media and public opinion has not been erased by the subsequent arrests and remand.
In contrast to the State government’s procrastination in setting the ordinary criminal law in motion, the Union Ministry of Corporate affairs as well as the capital market regulator, the Securities and Exchange Board of India (SEBI), have acted with due speed in far more complicated areas. Coordination between these agencies and the investigating State police will be critical in this case. Going by Mr. Raju’s own confession, he and the other perpetrators can be prosecuted under the Companies Act, the Securities Contracts (Regulation) Act, the SEBI Act, and the Indian Penal Code. Given the magnitude of the scam, it is likely that the Central Bureau of Investigation will be brought in. However, it must be remembered that cases such as the Satyam scam have dragged on for years in the courts. Neither specific legal provisions nor the specialised prosecuting agencies have really helped in speeding up the process. Although not strictly comparable, the Harshad Mehta-led stock market scam of 1991-92 prompted a flurry of activities to speed up the legal processes, including the setting up of a special court at Mumbai. More than 15 years after the first case was filed, the special court finds itself bogged down in the scam cases. Many of the accused, including the principal perpetrator, are dead.