Don't take action against Satyam, India tells US

Don't take action against Satyam, India tells US

Salman Khurshid

“Sebi has marshalled a request (to US Securities Exchange Commission) and we are monitoring them. On the political level such signals can be sent and we have already sent them,” Corporate Affairs Minister Salman Khurshid told PTI, when asked whether the government has taken up the issue of Satyam with the US authorities.

Satyam Computer Services, now Mahindra Satyam, can face punitive action in the US as the company’s shares were listed and traded on American bourses. It is also contesting about a dozen class action suits in US courts which could entail a heavy penalty on the company. Also, the company can face action by the US Securities Exchange Commission.

“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,” Khurshid said. The American administration would understand the issue, the minister hoped. “But I am keeping my fingers crossed,” he said.

In the US, the securities laws have empowered defrauded investors to get compensation from the errant parties. The SEC can also enforce action and get damages/ compensation for investors. On January 7, the day when Raju disclosed the fraud to Indian market regulator Sebi, the New York Stock Exchange halted trading in Satyam after the stock plunged by over 90 per cent to US$0.85 in pre-market trade.

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