DIRECT TAXES
| US court rejects Upaid lawsuit against Satyam Wed, 18 Jan 2012 19:22:07 +0530 |
| Business standard Satyam Computer Services, now Mahindra Satyam, today said a US court has dismissed a lawsuit filed against the company by Upaid following the settlement between the two. "In connection with the lawsuit filed by Upaid Systems against the company in the US District Court for the Eastern District of Texas, the court by its order dated January 17, 2012 dismissed the lawsuit with prejudice pursuant to the settlement between the company and Upaid," Satyam said in a filing to the Bombay Stock Exchange (BSE). In December 2009, Mahindra Satyam had settled a lawsuit filed by its former client Upaid Systems by paying $70 million. Upaid had filed the lawsuit in a Texas court seeking damages exceeding $1 billion. Earlier this month, Mahindra Satyam filed a suit against its former Board of Directors, certain employees and the company's audit firm Price Waterhouse in a Hyderabad court seeking damages for perpetrating the fraud three years ago. Though the quantum of damages sought could not be ascertained, Mahindra Satyam Chairman Vineet Nayyar had said the company was seeking compensation for the huge losses it suffered. "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," he said. Last year, Mahindra Satyam had also agreed to pay $125 million to settle a class action suit filed against it in a US District Court, southern district court of New York. The company had agreed to pay to the lead plaintiffs 25% of any net recovery it might obtain in future against any of the PricewaterhouseCoopers related entities. The settlement included taxes, compliance costs, attorney's fees and expenses and the settlement is exclusively for and on behalf of the company. After B Ramalinga Raju, the former chairman of Satyam Computer confessed to having fudged the company accounts to the tune of Rs 7,200 crore, the stock of the company nosedived on the New York Stock Exchange, allegedly causing millions of dollars in losses to US investors. The Indian tax authorities have also made an income tax claim of about Rs 2,500 crore. |
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