IT firm Mahindra Satyam has filed a lawsuit against its former directors,some ex-employees and former auditor PriceWaterhouse,seeking damages after the company was hit by a fraud in 2009 that became the countrys biggest corporate scandal. Mahindra Satyam (previously known as Satyam Computer Services) said the suit filed in a court in Hyderabad sought damages for inter-alia perpetrating fraud,breach of fiduciary responsibility,obligations and negligence in performance of duties. Ramalinga Raju,founder and former chairman of Satyam,shocked investors in January 2009 when he revealed that the companys profits had been overstated for years and that assets allegedly worth more than Rs 7,000 crore had been falsified. The company filed a suit in the City Civil Court,Hyderabad,against the past Board of Directors,certain former employees and PriceWaterhouse,the former statutory auditors,its affiliates and partners,seeking damages for inter-alia perpetrating fraud,breach of fiduciary responsibility,obligations and negligence in performance of duties, Satyam said in a filing to the BSE. The directors who quit Satyam in 2008 included Vinod K Dham,G Krishan Palepu and Mendu Rammohan Rao. Tech Mahindra,part of the Mahindra group,bought control of Satyam in an auction in April 2010 and renamed it Mahindra Satyam. Raju was granted bail by the Supreme Court in November last year after the CBI failed to file charges against him on time. US regulator Securities Exchange Commission had in April,2011 imposed a penalty of $17.5 million jointly on Satyam Computers,PriceWaterhouse India and affiliates auditors for the accounts bungling that went undetected for several years. Satyam agreed to pay a fine of $10 million towards settlement of charges of fraudulently overstating the companys revenue,income and cash balances by more than $1 billion over five years. Lawsuit baseless: PriceWaterhouseNew Delhi: Audit firm PriceWaterhouse has said the case filed against it is an attempt to shift responsibility to auditors. PW India is outraged that Satyam is attempting to shift responsibility to auditors for the consequences of a carefully and deliberately concealed fraud that was undertaken at the direction of its own senior management, said a statement by the audit firm. PW further said,The fraud perpetrated by Satyam was specifically designed to and did circumvent Satyams own internal controls and PW Indias audit process,and consequently PW India was a victim of Satyams fraud,and will defend itself vigorously against Satyams baseless contentions. PTI
