Mahindra Satyam, Price Waterhouse sue each other
10 Jan 2012
Computer services firm Mahindra Satyam on Monday said it had filed a lawsuit against past directors, some ex-employees and former auditor Price Waterhouse India seeking damages, after the company (then Satyam Computer Services) was involved in a fraud in 2009 that is billed as India's biggest corporate scandal. It was taken over by the Mahindra group in April 2010.
Mahindra Satyam said on Monday the suit, filed in the Hyderabad civil court, sought damages for "inter-alia perpetrating fraud, breach of fiduciary responsibility, obligations and negligence in performance of duties".
A furious Price Waterhouse has filed a counter-suit against Mahindra Satyam. The audit company said today it has filed a lawsuit against the software company as well as some of Satyam's former senior employees, and that it is seeking more than Rs100 crore ($19 million) in damages.
PW India termed Satyam's contentions against it as "baseless" and said the Indian software company circumvented its own internal controls as well as PW India's audit process.
"Price Waterhouse 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.
"The fraud perpetrated by Satyam was specifically designed to - and did - circumvent Satyam's own internal controls and Price Waterhouse India's audit process, and consequently Price Waterhouse India was a victim of Satyam's fraud, and will defend itself vigorously against Satyam's baseless contentions,'' it said.
Ramalinga Raju, founder and former chairman of Satyam, shocked investors in January 2009 when he revealed that the company's profits had been overstated for years and that assets allegedly worth more than Rs1,400 crore had been falsified.
Raju was granted bail by the Supreme Court in November last year after the Central Bureau of Investigation failed to file charges against him on time.
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