Aberdeen seeks $150M in damages from Mahindra Satyam

Investor group led by Aberdeen now seeking some US$150 million in damages for alleged losses suffered because of Mahindra Satyam's past accounting scandal, report says.

A group of investors led by Scottish investment firm Aberdeen Asset Management is seeking 7.5 billion rupees (approximately US$150 million) in damages from Mahindra Satyam for alleged losses related to Satyam's 2009 accounting scandal.

The Business Standard reported Monday that Mahindra Satyam said it received a notice from Aberdeen Global and other investors that they had filed a claim before a court in the United Kingdom, claiming losses in excess of US$150 million and interest at the rate of 8 percent on damages.

The report cited an anonymous senior official at Mahindra Satyam as saying that the company will respond to the claims after consulting their legal counsels. "We have already informed the bourses in the last quarter itself that there are a few investors' claims on losses. We now received a formal notice from the Aberdeen Group and our next step is to go to the court," he said.

Business Standard reported that Mahindra Satyam had stated, after posting its third quarter results ended Dec. 31, 2011, that Aberdeen Asset Management and certain non-U.S. claimant-funds were given notice of potential proceedings against the company for the losses. The investors had "initially quantified the alleged losses at around US$283 million. However, since then, the list of claimant-funds has undergone significant change and the losses allegedly sustained by them have not been specified," it said then.

The report also noted that another suit filed by the Aberdeen Group along with other American Depository Receipt holders in November 2009 is still pending in U.S. courts, which claimed losses of over US$68 million. Tech Mahindra, it added, has since been looking for an out-of-court settlement with the Aberdeen Group.

Aberdeen's latest claim could likely pose another legal hurdle for the merger between Mahindra Satyam and its parent company Tech Mahindra, which was announced last month.

Business Standard noted that since Satyam was acquired by Tech Mahindra in 2009 after its founder Ramalinga Raju admitted to fraud in an accounting scandal, Satyam--which was renamed Mahindra Satyam--has faced a series of legal and regulatory hurdles. While many have been settled, the company is still facing a tax claim of 6.17 billion rupees (US$120 million) from the Income Tax department in India, it added.


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