Mahindra Satyam to pay $10 m penalty

 The settlement concludes the SEC’s investigation of accounting issues as to the company, said an official release from SEC. Under the settlement terms, Mahnidra Satyam consented to the entry of a judgment requiring it to pay a civil penalty of $10 million, comply with US federal securities laws, hire an independent consultant, and comply with certain undertakings. 

This effectively means that all of the misconduct transpired under previous management prior to the nomination and appointment by the Government of India of new directors for the company on January 11, 2009, and prior to the strategic investment by Venturbay Consultants Private Limited, a subsidiary controlled by Tech Mahindra Limited, that was completed in July 2009.

Mahindra Satyam Chairman Vineet Nayyar said “we concluded that it is in the best interests of Mahindra Satyam and its shareholders to resolve this matter and put it behind us on the basis announced today.  The new management of the Company are committed to the highest standards and we will never betray the trust of our investors.”  It may be noted that the US regulators on Tuesday fined the software firm and its auditors PriceWaterhouse India up to $17.5 million for the accounts fraud that went undetected for several years.

SC relief on tax

Meanwhile, the Supreme Court directed the Central Board of Direct Taxes (CBDT) to maintain status quo over its demand of Rs 617 crore in income tax from the scam hit Satyam Computers till Friday and asked it to work out the company’s actual liability.
A three judges bench headed by the Chief Justice S H Kapadia directed CBDT to work out and the actual income tax liability of Satyam Computers, now Mahindra Satyam. The bench also hinted that the IT firm would have to pay some parts of the actual demand: “On Friday, they (Satyam) would have to pay some parts of it”.