Satyam Computer Services Ltd. Investor Class Action Lawsuit

PRLog (Press Release) - Mar 05, 2009 -
Saytam Computer Services Ltd faces at least 12 class action lawsuits from angry investors in the US . Shareholders of Satyam Computer Services Ltd. (NYSE:SAY) filed proposed securities class action lawsuits in the United States District Court for the Southern District of New York 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 alleged 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 at: +1 (858) 779 - 1554

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. 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. Trading in Satyam ADS was halted after January 7, when Satyam chairman B Ramalinga Raju admitted to falsifying the accounts of the company and sparked a record plunge in the company’s shares that wiped out $2.2 billion of investor wealth. 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. The initial investigations by the Registrar of Companies (RoC) into the Satyam scam has revealed large-scale selling of the company's shares by institutional investors just days before Ramalinga Raju's startling confession. The sales took place after the Satyam-Maytas merger fiasco which, too, might have encouraged these big players to exit the IT major. But sources reportedly said five sales between December 23 and January 5 are particularly under the scanner. These sales were all involving shares pledged by the Raju family with various entities to raise loans. All of them were conducted through IL&FS Trust Company as a trustee for these debenture holders and lenders.
On December 23, DSP Merrill Lynch sold shares. Interestingly, DSP Merrill Lynch was less than a week later appointed by Satyam to consider strategic options for the company following criticism of the aborted Maytas acquisition bid. And on the same day, as well as the next, December 24, DSP Blackrock sold shares of Satyam. Around a week later, on Dec 29 and 30, Deutsche Bank sold shares at a time when the scrip was bouncing back somewhat. Then on January 2, HDFC Mutual Fund offloaded shares. Satyam's price was still on its way up from the lows it had touched just a few weeks earlier, but several times the price it would be commanding just a week later. On January 5, two days before Raju's "confession", ILFS Financial Services also opted out.
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 complaints also allege that Satyam's auditors PricewaterhouseCoopers, PricewaterhouseCooopers International, and PricewaterhouseCoopers were active participants in alleged Satyam's fraud.
Pricewaterhouse admitted that the problems at Satyam have ‘created a difficult environment’ for the firm, the statement said. PricewaterhouseCoopers reportedly said it would set up an advisory board and would conduct ‘a thorough review’ of its work in relation to Satyam.
IGate Corp., a U.S.-based computer services provider with operations in India, said earlier it may consider merging with Satyam if the new management seeks a strategic partner.

Meanwhile the Government said that a prospective buyer of Satyam will have to make an open offer of 20 per cent. Corporate Affairs Minister P C Gupta told reporters: "Whether it (stake to be offered in Satyam) is 31 per cent or 26 per cent, anybody coming in would have to make an open offer of 20 per cent in the market and then the number of shares with the person or with the bidder could be higher than 31 per cent or 26 per cent. So, that is not an issue”.

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 at: +1 (858) 779 - 1554

Shareholders Foundation, Inc.
Trevor Allen
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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