Satyam Computer Services Ltd has agreed to pay $125 million to settle U.S. shareholder litigation arising from an accounting fraud that in 2009 turned into India’s biggest corporate scandal.
The settlement does not cover various individuals including Ramalinga Raju, the outsourcing company’s founder and former chairman, according to settlement papers filed late Wednesday in the U.S. district court in Manhattan.
Raju shocked investors in January 2009 when he said Satyam had overstated earnings and assets for several years, in a fraud estimated to exceed $1.5 billion and sometimes referred to as ‘India’s Enron’.
The revelation caused shares of the software servicing company to plummet, leading to the lawsuit. The company is now known as Mahindra Satyam Ltd.
Wednesday’s settlement would resolve claims that Satyam misled investors about its business performance.
It covers investors who bought Satyam’s American depositary shares in the five years ended January 6, 2009, the day before Raju revealed the fraud, court records show.(Reuters)