$10m US settlement in firm’s interest, says Mahindra Satyam

April 6th, 2011 - 8:45 pm ICT by IANS  

Ramalinga Raju Hyderabad, April 6 (IANS) After agreeing to pay $10 million to settle the US Securities and Exchange Commission’s (SEC) suit, leading IT services provider Mahindra Satyam said the step was in the best interest of the company and the shareholders.

Mahindra Satyam and five PricewaterhouseCoopers International Ltd. affiliates Tuesday together agreed to pay $17.5 million to settle claims brought by the US regulator over an alleged $1 billion accounting fraud.

Mahindra Satyam, earlier known as Satyam Computer Services Limited, agreed to pay a $10 million penalty while five PricewaterhouseCoopers LLP affiliates in India that audited Satyam agreed to a $6 million civil penalty to settle the SEC’s suit, filed in a Washington federal Court.

The Hyderabad-based Mahindra Satyam said it reached the settlement with the SEC without admitting or denying allegations of any wrongdoing.

“We concluded that it is in the best interests of Mahindra Satyam and its shareholders to resolve this matter and put it behind us,” Mahindra Satyam chairman Vineet Nayyar said in a statement released here.

He said the new management of the company was committed to the highest standards and will never betray the trust of its investors.

Under the terms of the settlement, Mahindra Satyam consented to pay the penalty, comply with the US federal securities laws, hire an independent consultant, and comply with certain undertakings, the statement added.

The settlement relates to an accounting fraud perpetrated by the company’s former management from 2003 to September 2008.

Satyam’s founder and chairman Ramalinga Raju quit in January 2009 while admitting the biggest fraud in India’s corporate history. He is currently in jail along with other accused and is being tried for cheating and forgery.

After the scam rocked the firm, it was taken over by the government. A few months later, Tech Mahindra acquired the firm and renamed it as Mahindra Satyam.

Related Stories

Tags: , , , , , , , , , , , , , , , , , , ,

Posted in Business |

Subscribe