Information Technology (IT) consulting and outsourcing company Mahindra Satyam, (formerly known as Satyam Computer Services) has made 123 people defendants in the lawsuit filed against its former board of directors, certain employees and the company's former audit firm Price Waterhouse (PW), a source close to the development said.
These include Ram Mynampati, former president and interim CEO of Satyam, and the previous management, comprising founder-chairman B Ramalinga Raju, his brother and former managing director B Rama Raju, and former chief financial officer Srinivas Vadlamani.
“Also included in the list are four former employees of Satyam’s finance department, who are being prosecuted by the Central Bureau of Investigation. PW India, PW US and their partners are also in the list,” said the source, requesting anonymity.
When contacted to enquire about why the Mahindra Satyam management delayed in filing the lawsuit, a company spokesperson, who didn’t want to be named, said they were awaiting the right time.
“We already had major cases like Upaid, SEC and the US class-action suits and didn't want to deviate from those important issues. Now that they have been settled, we went ahead with the case against the former management and others,” the spokesperson said, confirming that Mahindra Satyam bosses had received emails with regard to the civil suit filed by PW India against Satyam.
The source said Mahindra Satyam may seek more damages than the amount it sought in the petition. “Though the company agreed to settle some issues, which involved huge payments, the total amount for settling these cases was not paid as the Indian government’s Authority for Advanced Ruling approval has not yet been in place. Once they are settled, the damages may go up. To that extent, the company has reserved the right to seek more damages,” he said.
The scheme of Advance Rulings has been introduced under the Income Tax Act, 1961, to provide facility of ascertaining the income tax (I-T) liability of non-residents, to plan their I-T affairs well in advance and to avoid long-drawn and expensive litigation.
Mahindra Satyam had settled its cases in the US after paying $125 million (Rs 6.591 crore) to close its class-action suits, and $70 million (Rs 368.9 crore) to Upaid Systems.
UK-based Upaid had filed a case against Satyam in December 2009 pertaining to alleged forgery in the transfer of certain software to Satyam. Another $10 million (Rs 52.7 crore) was incurred in settling with the US Securities and Exchange Commission.
According to the source, the contents of the lawsuit filed against the former management would become a public document in a week as it has to go through several stages within the court process.
“The court has already given the number (to the petition). But this being filed in a civil court, it is still in the initial stages. It would take a week for the record to become final,” the source said.
