Satyam offers $10 mn to settle Upaid’s $1 bn claim

Satyam offers $10 mn to settle Upaid’s $1 bn claim
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First Published: Sun, May 10 2009. 09 57 PM IST

Clearing the legal mess: Upaid is yet to accept Satyam’s offer, but negotiations are under way. Bharath Sai / Mint
Clearing the legal mess: Upaid is yet to accept Satyam’s offer, but negotiations are under way. Bharath Sai / Mint
Updated: Sun, May 10 2009. 09 57 PM IST
Mumbai: The government-appointed board of Satyam Computer Services Ltd has offered as little as $10 million (around Rs49 crore) to settle a $1 billion claim by UK-based online and mobile payments firm Upaid Systems Ltd, according to people close to the negotiations.
Clearing the legal mess: Upaid is yet to accept Satyam’s offer, but negotiations are under way. Bharath Sai / Mint
The offer has the backing of Tech Mahindra Ltd, which last month won the bid to take over Hyderabad-based Satyam, said the people, who didn’t want to be named.
Upaid is pursuing a case against Satyam for fraud and forgery that it has accused Satyam’s previous management of.
On 13 April, shortly after the Satyam board chose Tech Mahindra as the winning bidder, a board member said that negotiations with Upaid to settle the case had begun.
Negotiations are still under way because Upaid is yet to accept the figure offered by Satyam’s board.
An email sent to Upaid for comment evoked no response. On 4 May, the company had said it would not comment on the matter at that stage of negotiations. The case is slated to come up for hearing in court in the first week of June, so both sides would hope to strike a deal before that.
The Satyam board has also started negotiations with parties that have filed class action suits against the company in various US courts, people familiar with the development said. These were filed in the wake of the Satyam accounting scam, which surfaced when founder B. Ramalinga Raju on 7 January confessed to having doctored the company’s books for several years to the tune of Rs7,136 crore.
The Satyam board aims to reach a settlement and close these cases before they go to trial, said the people, who didn’t want to be identified.
The legal battles, and the liabilities arising out of them, have been a matter of concern for Satyam and its shareholders.
Analysts say that if the company manages to settle the lawsuits for relatively low sums of money compared with the size of the claims, it could brighten the outlook for both Satyam and Tech Mahindra.
cnbctv18@livemint.com
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First Published: Sun, May 10 2009. 09 57 PM IST