Satyam gets notices for claims worth Rs 1230 cr

Satyam gets notices for claims worth Rs 1230 cr

"Mahindra Satyam has received legal notices from 37 companies claiming a refund of Rs 1,230.40 crore (about USD 265 million), allegedly given as a temporary advance," the US-listed Indian IT firm said in a regulatory filing here. "The notices claim the money back to allegedly repay their creditors, some of whom include Maytas Properties Ltd and Maytas Infra Ltd," said the company, which was earlier known as Satyam Computer and was acquired by Mahindra group's Tech Mahindra after being hit by a corporate fraud. "On November 14, 2009, Mahindra Satyam has replied to the legal notices stating that the claims are legally untenable," the NYSE-listed company said in its filing with the US regulator Securities and Exchange Commission (SEC).

The company further said that the "confession letter dated January 7, 2009, of Ramalinga Raju, former Chairman of the company, also refers to net amount of Rs 1,230 crore arranged to the Company by the 37 companies." After Raju's disclosure about financial wrongdoings at erstwhile Satyam for several years, the Indian government had superceded the company's board and later a Company Law Board-monitored bidding process led to Tech Mahindra acquiring control of Satyam.

Earlier in June, while disclosing the financials for October-December 2008 quarter and the first two months of 2009, Satyam had said that 37 companies had made claims totalling Rs 1,230 crore from it. However, at that time, the company had said that it has not acknowledged any of these claims as the matter was being investigated. On June 9, the company had disclosed a total of about Rs 10,000 crore in legal and other claims.

Besides Rs 1,230 crore sought by 37 'unacknowledged' creditors, these included claims worth about Rs 400 crore related to four overseas acquisitions made under the leadership of its disgraced founder Raju, a one billion dollar long-running fraud litigation with British firm Upaid and the class action lawsuits filed by US shareholders over the multi-crore financial scam at the company, with an estimated demand of another one billion dollar.

Except for Upaid case, all other claims surfaced after Raju's disclosure. The fraud is still being probed by various investigating and regulator agencies, including CBI, SFIO and SEBI. Satyam shares today fell about 3 per cent in early morning trade to 5.23 dollars at the New York Stock Exchange. The shares had plunged to as low as 0.78 dollars on January 12, 2009 after Raju's disclosure of the fraud. Shares of the company, which are also listed in India, fell by over 2 per cent to close at Rs 104.85 at the Bombay Stock Exchange.

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