Satyam gets notices on four past takeovers

NEW DELHI: Scam-hit Satyam Computer today said legal disputes have arisen over as many as four of its overseas acquisitions made prior to the disclosure of a massive fraud at the company.

While the company has been served legal notices in some cases, claims have also been sought from Satyam in a few of these disputes.

These are related to the acquisitions of US-based Caterpillar's Market Research and Customer Analytics business unit, Chicago-based strategy and general management consulting firm Bridge Strategy Group LLC, Belgium-based supply chain management consultancy firm S&V Management Consultants as also purchase of 50 per cent stake in a JV with Venture Global Engineering LLC.

These disputes are beside the widely-known class action lawsuits in the US filed after the fraud disclosure and the long-running Upaid litigation.

Satyam said that it had announced on April 21, 2008 a deal to acquire Market Research and Customer Analytics business unit from Caterpillar for 60 million dollars.

Satyam made an initial payment of 10 million dollars to Caterpillar on August 6, 2008, and a 50 million dollars promissory note was issued in favour of the US firm on the same date.

As of November 14, 2008, Satyam had paid 20 million dollars to CAT, consisting of its initial payment of 10 million dollars and payments made under the Promissory Note totaling 10 million dollars.

Following the disclosure of fraud in January, Caterpillar served legal notice on Satyam notifying the company of the termination of its agreements and demanding the immediate payment of the unpaid principal balance of 40 million dollars due under the Promissory Note.

"In March 2009, the parties began negotiating to amicably resolve the outstanding issues and the settlement negotiations are at an advanced stage," Satyam said today.

Another acquisition of Bridge Strategy Group was announced on January 21, 2008 for 35 million dollars to be paid over two and half years. The transaction was consummated on April 4, 2008 and an initial payment of 19 million dollars was made on that day.

The balance payments were to be paid in two stages: 8 million dollars in August 2009 as guaranteed payment and another 8 million dollars in October 2010 as key executive retention payment.