Mumbai/New Delhi, Jan. 8 Two US-based law firms - Izard Nobel LLP and Vianale & Vianale LLP - have filed ‘class action’ lawsuits against scam-hit Satyam Computer Services on behalf of investors who purchased the American Depository Receipts (ADRs) of the Hyderabad-based company between January 6, 2004 and January 6, 2009.
The lawsuit has been filed at the behest of Ms Aekta Ben Patel, a non-resident Indian in US.
A class action or a representative action is a form of lawsuit where a large group of people collectively bring a claim to court.
In two separate news releases sent today, both law firms have charged that the IT major and its top executives violated the Section 10(b) and 20 (a) of the Securities Exchange Act of 1934 by issuing materially false and misleading statements.
According to corporate lawyers, even the independent board directors of Satyam, including the ones who have tendered their resignation, could be sued under this act. According to them, even the statutory auditor for Satyam Computer Services, Price Waterhouse could be sued.
On January 7, Satyam’s Founder-Chairman, Mr B. Ramalinga Raju, sent a letter to the Satyam Board of Directors and the Securities & Exchange Board of India acknowledging a Rs 7,000-crore fraud in which Satyam’s financial accounts and disclosures were systematically falsified. As a result of this disclosure, the company’s ADRs fell by $8.42, or 90 per cent to $ 0.85 on Wednesday. Subsequently, the New York Stock Exchange suspended trading in Satyam’s ADRs.
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