Don't take action against Satyam: India to U.S.
By siliconindia   |   Tuesday, 12 January 2010, 15:37 IST   |    61 Comments
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Don't take action against Satyam: India to U.S.
Bangalore: Indian authorities asked U.S. officials not to take any action against the scam-hit Satyam, as it would amount to punishing shareholders of the IT company for a second time. Satyam Computer Services, now Mahindra Satyam, can face punitive action in the U.S. as the company's shares were listed and traded on American bourses. The scam-hit company is also contesting about a dozen class action suits in U.S. courts, which could entail a heavy penalty on the company. Also, the company can face action by the U.S. Securities Exchange Commission (SEC). Commenting on whether the government has taken up the issue of Satyam with the U.S. authorities, Corporate Affairs Minister Salman Khurshid told PTI, "SEBI has marshalled a request (to U.S. Securities Exchange Commission) and we are monitoring them. On the political level such signals can be sent and we have already sent them." The American administration would understand the issue, the minister hoped. Khurshid said, "The case has been laid out quite well. And the case being that nothing should actually punish the shareholders a second time over, because any fine imposed on the company will inevitably hurt the shareholders. But I am keeping my fingers crossed," he said. Satyam Founder B Ramalinga Raju's disclosure of accounting fraud on January 7, 2008, is reported to have resulted in a loss of around 14,000 crore to the shareholders. The day when Raju disclosed the fraud to Indian market regulator Securities and Exchange Board of India, the New York Stock Exchange (NYSE)halted trading in Satyam after the stock plunged by over 90 percent to $0.85 in pre-market trade. In the U.S., the securities laws have empowered defrauded investors to get compensation from the errant parties. SEC can also enforce action and get damages/compensation for investors.

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