Mahindras to sue B Ramalinga Raju and former independent Satyam Directors over fee refund
Mahindra Satyam has asked directors to return fee paid for financial year 2008-09 , in which the multi-billion dollar scam became public & sank the co into loss.
By Swati Bharadwaj Chand, TNN |
HYDERABAD: Even as the Mahindras are planning to drag disgraced Satyam founder B Ramalinga Raju to court to claim damages, they are also learnt to be seriously considering suing the scam-hit company’s erstwhile independent directors to recover the remuneration paid to them.
With the former independent directors of Satyam failing to heed the company’s communications seeking a refund of the fee paid to them, a legal action is now becoming inevitable , company sources told TOI.
“We are planning to take legal action against them (former independent directors). We had written to them last year but over a year later we have not yet heard from them,” a senior Mahindra Satyam official confirmed.
Mahindra Satyam, as the scamhit IT firm is now known, has asked the directors to return the fee paid for financial year 2008-09 , in which the multi-billion dollar scam became public and sank the company into huge losses.
Mahindras wrote last year to the six former directors of Satyam that included some big names like management guru Krishna G Palepu, Pentium chip innovator Vinod Dham and former Indian School of Business dean Prof Mendu Rammohan Rao.
Former cabinet secretary TR Prasad, former IIT Delhi director V S Raju and US-based academician Mangalam Srinivasan were other independent directors on Satyam’s board when Raju was cooking the company’s accounts.
“Money is owed to us and we will take it back,” Nayyar had said, adding that he was hoping the former Satyam directors would heed the company’s request to return the money.
Mahindra Satyam, in its annual report, has declared its intent to recover Rs 11 million paid as commission to non-executive directors during the financial year 2008-09 as the company has incurred losses during the year.
Each of Satyam’s former independent directors were paid a commission of Rs 12 lakh over and above sitting fees for the financial year 2008-09 , with Krishna Palepu also being paid a management consultancy fee of over Rs 65.27 lakh during the same year.
The role of Satyam’s then independent directors came under the scanner and they were forced to quit after Ramalinga Raju's sensational disclosure in January 2009 that he had been fudging the company's accounts for several years.
With the former independent directors of Satyam failing to heed the company’s communications seeking a refund of the fee paid to them, a legal action is now becoming inevitable , company sources told TOI.
“We are planning to take legal action against them (former independent directors). We had written to them last year but over a year later we have not yet heard from them,” a senior Mahindra Satyam official confirmed.
Mahindra Satyam, as the scamhit IT firm is now known, has asked the directors to return the fee paid for financial year 2008-09 , in which the multi-billion dollar scam became public and sank the company into huge losses.
Mahindras wrote last year to the six former directors of Satyam that included some big names like management guru Krishna G Palepu, Pentium chip innovator Vinod Dham and former Indian School of Business dean Prof Mendu Rammohan Rao.
Former cabinet secretary TR Prasad, former IIT Delhi director V S Raju and US-based academician Mangalam Srinivasan were other independent directors on Satyam’s board when Raju was cooking the company’s accounts.
ADVERTISEMENT
Mahindra Satyam chairman Vineet Nayyar too had on an earlier occasion told TOI that he did not rule out the possibility of initiating legal action to recover the money if the need arose. “Money is owed to us and we will take it back,” Nayyar had said, adding that he was hoping the former Satyam directors would heed the company’s request to return the money.
Mahindra Satyam, in its annual report, has declared its intent to recover Rs 11 million paid as commission to non-executive directors during the financial year 2008-09 as the company has incurred losses during the year.
Each of Satyam’s former independent directors were paid a commission of Rs 12 lakh over and above sitting fees for the financial year 2008-09 , with Krishna Palepu also being paid a management consultancy fee of over Rs 65.27 lakh during the same year.
ADVERTISEMENT
The Indian government is understood to have already directed Palepu to return the consultanty fee to the company. However, Mahindra Satyam officials confirmed that the company had yet to receive a refund of the consultancy fee from Palepu. The role of Satyam’s then independent directors came under the scanner and they were forced to quit after Ramalinga Raju's sensational disclosure in January 2009 that he had been fudging the company's accounts for several years.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
Related Articles
HDFC Bank exit spotlights board failures; from Satyam Computers to Tata Trusts, governance gaps hit corporates and nonprofits alike2026-04-26T17:55:03Z- Delhi Capitals co-owner GMR Sports CEO Satyam Trivedi steps down2026-04-20T19:04:25Z
- Nita Ambani receives ‘Humanitarian Award’ at Miss World finale, says she is guided by motto of ‘Satyam, Shivam, Sundaram’2024-03-10T16:08:13Z
ADVERTISEMENT
