ibnlive » Business

Dec 09, 2009 at 08:56pm IST

Mahindra Satyam settles law suit with $70mn

Hyderabad: Mahindra Satyam on Wednesday said it had settled a US lawsuit filed by Updaid, a client of erstwhile Satyam Computer Services, for $70 million.

"The board approved a settlement agreement between the company and Upaid Systems," Mahindra Satyam said in a statement.

"The company will make first payment in the amount of $45 million within 10 business days satisfying the condition of obtaining such governmental approvals as necessary under Indian law."

BIG PRICE: Satyam founder-chairman B Ramalinga Raju in Jan confessed to a multi-billion fraud.

The Indian software major added that it would make "a second payment in the amount of $25 million within 12 months after the first payment is made".

With this settlement agreement, all pending actions against the Indian IT bellwether will be dismissed.

London-based online and mobile payment services firm, Upaid Systems, had filed lawsuits in the US federal and state courts in 2007 against Satyam, claiming $1 billion in damages for fraud and forgery.

In 2008, Upaid had sought depositions by Satyam founder-chairman B Ramalinga Raju and chief financial officer Srinivas Vadlamani in a Texas district court, after the Hyderabad firm's aborted bid to buy out promoter group companies Maytas Properties and Maytas Infra.

Upaid accused Satyam of trying to execute a transaction designed to deplete its assets in advance of a judgment.

Tech Mahindra, the IT arm of the Mahindra and Mahindra group, acquired Satyam Computers in April 2009 after Raju stunned the corporate India in January 2009 by confessing to a multi-billion accounting fraud.