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Mahindra Satyam to settle US suit

Press Trust Of India
Feb 17, 2011 at 11:26am IST

Mumbai: Mahindra Satyam, formerly known as Satyam Computer Services, on Thursday said it has agreed to pay $125 million to settle a putative class action suit filed against the company in a United States District Court.

The litigation relates to the 2009 accounting fraud at Satyam Computer, which was later taken over by Tech Mahindra and renamed.

Furthermore, the company will also pay the lead plaintiffs 25 per cent of any net recovery that it may obtain in future from PricewaterhouseCoopers-related entities that helped Satyam founder B Ramalinga Raju perpetrate the fraud.

Mahindra Satyam to settle US suit, pay $ 125 mn

The litigation relates to the 2009 accounting fraud at Satyam Computer.

"The company has agreed to pay to the class members as consideration, $125 million, subject to the approval of the RBI and the determination of the authority for advance ruling and 25 per cent of any net recovery that the company may in the future obtain against any of the PwC-related entities," Mahindra Satyam said in a filing to the Bombay Stock Exchange.

The settlement amount includes taxes, compliance costs, attorney's fees and expenses, the filing added.

If the settlement is approved by the court, the claims against Satyam would be released by the lead plaintiffs, it said.

The filing also noted that the settlement is exclusively for and on behalf of the company and does not affect the other defendants to the class action litigation.

Bolstered by the development, shares of Mahindra Satyam jumped by 6.14 per cent to an early high of Rs 66.50 per share on the BSE.

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