Class Action Lawsuits Against Satyam (NYSE:SAT) pile up, 12 so far; Board replaced; Insider Trading?

PRLog (Press Release) - Jan 16, 2009 -
On Wednesday a shareholder of Satyam Computer Services Ltd. (NYSE:SAY) filed a proposed securities class action lawsuit in Manhattan federal court on behalf of purchasers of the American Depository Shares of Satyam Computer Services Ltd. during the period January 6, 2004 through January 6, 2009 against Satyam Cmputer Services Ltd. Over alleges violations of Federal Securities Laws

If you purchased American Depository Shares (ADS) of Satyam Computer Services Ltd. (NYSE:SAY) during the period January 6, 2004 through January 6, 2009, you have certain options and there are strict and short deadlines running (March 06, 2009). You should contact the Shareholders Foundation, Inc. immediately.

Email: Mail@ShareholdersFoundation.com

or Call us TODAY!

Phone: +1-(858)-779-1554

or send us your information by mail /facsimile

Shareholders Foundation, Inc.
3111 Camino Del Rio North - Suite 423 –
92108 San Diego
Tel:+1-(858)-779-1554
Fax:+1-(858)-605-5739
Mail@ShareholdersFoundation.com

According to the complaint the plaintiff alleges that Satyam Computer Services Ltd. (NYSE:SAY; “Satyam”) and its top executives violated the Section 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing false and misleading financial statements. Specifically, on January 7, 2009, Satyam 's CEO B. Ramalinga Raju sent a letter to the Satyam Board of Directors and the Securities & Exchange Board of India acknowledging a "multi-year" fraud in which Satyam's financial accounts and disclosures were systematically falsified. According to the letter, Raju admitted to having inflated the amount of cash on the Satyam 's balance sheet by nearly $1 billion, incurring liability of $253 million on funds arranged by him personally, and overstating Satyam's September 2008 quarterly revenues by 76% and profits by 97%. As a result of this disclosure, so the lawsuit, pre-market activity in the stock indicates a loss of roughly 90% of its value. Satyam ADRs fell $8.42, or 90%, prior to the opening of the New York Stock Exchange, which has suspended trading in Satyam's ADRs. Raju, Satyam’s 54-year-old founder, his younger brother Rama and Chief Financial Officer Srinivas Vadlamani will seek bail on Jan. 16. They were remanded to judicial custody on charges of breach of trust, criminal conspiracy and forgery until Jan. 23. Raju has reportedly assembled a team of 25 lawyers to defend him.
Satyam, founded in 1987, made its name by helping companies tackle the year 2000 computer bug. By 2001, the so-called Y2K revenue was substituted by software that helped companies to complete transactions over the Internet. The fall of Raju began three weeks ago when Satyam proposed paying $1.6 billion for Maytas Properties Ltd. and Maytas Infra Ltd., both tied to his family. Reportedly Raju’s admission that he’d fabricated $1 billion in cash and assets sparked a record plunge in the company’s shares that wiped out $2.2 billion of investor wealth. The stock surged 68 percent to 38.25 rupees, valuing the company at $331 million. The company’s founder, named Ernst & Young Entrepreneur of the Year in 2007, was consequently arrested in India’s biggest corporate fraud investigation. Reportedly three new directors led by Housing Development Finance Corp., India's second-largest private sector bank, chairman Deepak Parekh met in Hyderabad to take over India’s fourth-largest software exporter after the government replaced its board. The other two board members are former regulator C. Achuthan and Kiran Karnik, ex-president of the nation’s software industry lobby group. The initial challenge facing the new directors will be to find money to pay this month's wages to the company's employees. The company will hire executives to replace arrested chairman Ramalinga Raju and chief financial officer Srinivas Vadlamani, said Deepak Parekh. The Government-appointed new board of Satyam Computer Services, which is facing about a dozen lawsuits in the US courts, on Monday (January 12), said it has not sought any protection against the lawsuits but “certain protection” will be needed. “We have not sought any immunity as such, but certain protection will be required. Otherwise, the board will unnecessarily be entangled with the litigation,” C Achuthan, one of the three board members, told reporters in Hyderabad. About a dozen lawsuits have been filed against Satyam, along with its founder and former Chairman B Ramalinga Raju, and ex-CEO and MD Rama Raju, in the US courts, on charges of duping billions of dollars from thousands of the American investors. Ten of the most senior executives at Satyam, including interim Chief Executive Officer Ram Mynampati, and about 40 other top managers have " committed" to remain with the company. In a statement top Satyam executives said: "Satyam is facing a major crisis in which the unity and clear strategic direction of its top leadership are of paramount importance" and "this collective commitment will serve to significantly assuage concerns of various stakeholders in a highly fluid and challenging situation." Satyam has also formulated a task force to address all ongoing operational issues to ensure business continuity, including maintaining customer confidence
According to Bloomberg Satyam Computer Services Ltd., may seek a bailout and ask clients to accelerate payments.
IGate Corp., a U.S.-based computer services provider with operations in India, recently said it may consider merging with Satyam if the new management seeks a strategic partner.
Also new questions were raised about the relationship between Satyam and PricewaterhouseCoopers (PwC) as the first statements collected from senior executives by the police emerged. Vadlamani Srinivas, Satyam's former chief financial officer, which was remanded to judicial custody after the revelation of a $1 billion fraud in the Indian software company and will according to Inspector General V.S.K. Kaumudi be in custody until Jan. 23, reportedly said that PwC, which had audited the accounts of India's fourth-largest outsourcer since 2000, and B.Ramalinga Raju, its chairman, had communicated directly about the fictitious cash. He said, that he had been left out of conversations regarding nearly $1 billion in fixed deposits on Satyam's books, which turned out not to exist. If true, the arrangement would have been highly unusual, experts said. The Institute of Chartered Accountants of India, which has the power to debar the firm from India indefinitely, has issued a notice to PwC's local auditing unit, Price Waterhouse, demanding that it explain Satyam's accounts within 21 days. Deepak Parekh, said that Satyam would appoint a new accounting firm within 48 hours to restate its financial position and publish its third-quarter results. “No one has faith in the numbers being produced so far,” Parekh said. “Unless the accounts are restated, the outlook for Satyam can’t be the same.”

If you purchased American Depository Shares (ADS) of Satyam Computer Services Ltd. (NYSE:SAY) during the period January 6, 2004 through January 6, 2009, you have certain options and there are strict and short deadlines running (March 06, 2009). You should contact the Shareholders Foundation, Inc. immediately.

Email: Mail@ShareholdersFoundation.com

or Call us TODAY!

Phone: +1-(858)-779-1554

or send us your information by mail /facsimile

Shareholders Foundation, Inc.
3111 Camino Del Rio North - Suite 423 -
92108 San Diego
Tel:+1-(858)-779-1554
Fax:+1-(858)-605-5739
Mail@ShareholdersFoundation.com
www.ShareholdersFoundation.com
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