A US federal judge dismissed claims against former directors of Satyam Computer Services Ltd in shareholder lawsuits stemming from the massive fraud at the heart of India’s largest corporate scandal.
US district judge Barbara Jones in New York ruled on Wednesday the lawsuits failed to allege that the ex-directors recklessly failed to discover the fraud.
In her decision on Wednesday Jones said the allegations primarily focused on the actions of a small group of insiders reinforcing an inference the audit committee’s members “were themselves victims of the fraud.”
Satyam shareholders began filing lawsuits in 2009 after the scandal broke.
In 2011 Satyam, now called Mahindra Satyam and its auditor PricewaterhouseCoopers agreed to pay $125 million and $25.5 million, respectively, to settle claims filed by shareholders.
That same year, Satyam and PwC agreed to pay $17.5 million to settle claims made by the US Securities and Exchange Commission and Public Company Accounting Oversight Board.
The 2011 settlements did not include Satyam’s former directors, who continued to litigate the case that ultimately ended in Wednesday’s ruling.