Mahindra Satyam sues former directors, Price Waterhouse
Mahindra Satyam on Monday said it had filed a lawsuit against former directors, some ex-employees and former auditor Price Waterhouse, seeking damages after the company was hit by a fraud in 2009 that became India's biggest corporate scandal.business Updated: Jan 09, 2012 22:10 IST
Mahindra Satyam on Monday said it had filed a lawsuit against former directors, some ex-employees and former auditor Price Waterhouse, seeking damages after the company was hit by a fraud in 2009 that became India's biggest corporate scandal.
"The company filed a suit in the City Civil Court, Hyderabad, against the past Board of Directors, certain former employees and Price Waterhouse, the former statutory auditors, its affiliates and partners, seeking damages for inter-alia perpetrating fraud, breach of fiduciary responsibility, obligations and negligence in performance of duties," Satyam, now Mahindra Satyam, said in a filing to the Bombay Stock Exchange.
Ramalinga Raju, founder and former chairman of Satyam, shocked investors in January 2009 when he revealed that the company's profits had been overstated for years and that assets allegedly worth more than $1.5 billion had been falsified.
Indian IT firm Tech Mahindra, part of the Mahindra Group, bought control of Satyam in an auction in April 2010 and renamed it Mahindra Satyam.
Raju was granted bail by the Supreme Court in November last year after the federal investigative agency failed to file charges against him on time.
"We believe the company suffered incredible loss....We suffered losses in customers, we suffered reputational loss, specific losses in terms of class action suit, what we had to pay to Upaid and the fines SEC imposed on us," Vineet Nayyar, chairman, Mahindra Satyam, told a private news channel.
So, these are all significant damages and the company is seeking compensation, he added. Nayyar, however, did not disclose the amount of damages sought.
"We know the damages caused to us in terms of penalties, class action suits, penalties by SEC and Upaid...on top of loss of business," he said.
(Reuters & PTI)