The Telegraph
Monday , June 11 , 2012
Since 1st March, 1999
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Mahindra Satyam in Rs 275cr fraud claim

Hyderabad, June 10 (PTI): Mahindra Satyam has filed a suit against its former board of directors, some employees and audit firm Price Waterhouse, claiming around Rs 275 crore as damages from the previous management.

In its suit, the IT company said it had lost nearly Rs 3,000 crore revenue and Rs 70 crore profit because of the actions of the previous management and auditors.

“The plaintiff company suffered a loss on account of several customers cancelling or terminating contracts with the plaintiff company. The company suffered a loss of Rs 2,966.49 crore and consequent loss of profits from the said contracts. The company is entailed to recover Rs 70 crore from the defendants,” Mahindra Satyam said in the petition filed in the city civil court.

The new management of the city-based IT firm also sought Rs 51 crore towards expenses for forensic audit conducted after the fraud-hit company was taken over by them.

“The company paid in all a sum of Rs 51.72 crore to the entities and agencies among others, for the purpose of irregularities in the financial statements and operations of the plaintiff company when it was under the control of previous management. The plaintiff company is entitled to recover the amount,” the petition said.

Mahindra Satyam named as many as 128 as defendants, including B. Ramalinga Raju, Rama Raju, V. Srinivas, former directors Ram Mynampati, Krishna Palepu and former auditors Price Waterhouse and Lovelock and Lewes.

In January 2009, Satyam founder chairman B. Ramalinga Raju had admitted to the accounting fraud at the IT firm.

The alleged Rs 14,000-crore scam cast a shadow of doubt on the credibility of the Indian IT sector.

The government soon stepped in and set up a new board, following which Tech Mahindra bought a 46 per cent stake in Satyam through a formal public auction process.