Govt rules out compensation for victims of Satyam fraud

Govt rules out compensation for victims of Satyam fraud
PTI
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First Published: Fri, Feb 20 2009. 03 11 PM IST
Updated: Fri, Feb 20 2009. 03 11 PM IST
New Delhi: The government on Friday ruled out compensation for investors or companies hit by the Satyam financial fraud, estimated to be of the order of Rs7,800 crore.
“The government has no plan to provide financial assistance to the investors or the companies involved,” Minister of Corporate Affairs Prem Chand Gupta told the Lok Sabha in a written reply.
The minister said the losses suffered by investors after Satyam Computer Services founder chairman B Ramalinga Raju admitted to fudging books of accounts “are not quantifiable as capital market fluctuations are caused by a variety of factors”.
Following the disclosure of fraud by Raju on 7 January, Gupta said the share price of Satyam Computer on the bourses dropped from Rs188 to Rs30.70 before closing at Rs38.40. “It (the share) has been traded at different prices since then,” he added.
Pointing out that equities are risk-bearing instruments, he said, “The shares of companies are bought and sold continuously by investors at their own choice at various prices and at different times.”
Gupta further said that government, on the basis of an order by the Company Law Board, suspended the earlier board of Satyam Computer and appointed one with six new directors.
The new directors, he added, are taking necessary steps to secure finances from banks and financial institutions on the basis of the commercial viability and financial strength of the IT company.
The new board of Satyam, headed by former Nasscom president Kiran Karnik, is trying to ensure “continuity of business and operations of the company in the interest of its stakeholders”, the minister said.
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First Published: Fri, Feb 20 2009. 03 11 PM IST