Lawsuits against Satyam in US new headache for govt
The government now faces the tough challenge of tackling nearly a dozen lawsuits filed in the US seeking compensation for the multi-crore financial fraud committed by the Satyam Computers, reports Nagendar Sharma.business Updated: Jan 14, 2009 01:09 IST
The government now faces the tough challenge of tackling nearly a dozen lawsuits filed in the US seeking compensation for the multi-crore financial fraud committed by the Satyam Computers.
The Law Minister H.R. Bhardwaj and Company Affairs Minister P.C. Gupta along with senior officials of both the ministries went into a huddle on Tuesday seeking a way out of the situation. The compensation sought by the American investors is likely to run into hundreds of millions of dollars.
Top legal officers of the government say that Satyam stood a little chance of escaping huge penalties as the law against fraud is strict in the US. “Satyam would have to hire top US legal firms if it wants to have any chance of defending itself there,” a senior government official said.
The likely compensation for US investors threatens to derail all efforts been made by the government to keep the company afloat, the official said.
Shareholders of any company listed in the US stock exchanges can file a case of wrongdoing against the company in any American court. Satyam Computers is listed at the New York Stock Exchange.
The newly appointed directors of the company have also pleaded for protection from litigation in the US. “We have not sought any immunity as such, but certain protection will be required. Otherwise, the board will unnecessarily be entangled with the litigation,” C Achuthan, one of the three board members, told reporters in Hyderabad.