Satyam to face another US class action lawsuit

MUMBAI: Yet another class action lawsuit has been filed against Satyam. US-based law firm of Harwood Feffer LLP has said that on February 9, it has filed a new class action lawsuit against Satyam Computer on behalf of the purchasers of the American Depository Shares of Satyam Computer Services, for allegedly issuing false financial statements.

Harwood's complaint alleges that Satyam and its two top executives violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by issuing misleading statements.

In its statement, Harwood said action is pending in the United States District Court for the Southern District of New York. The class action lawsuit has been filed on behalf of purchasers of the ADS during the period from January 6, 2004, through to January 6, 2009.

This period is known as the class period, which is typically the time frame during which it is believed the alleged fraud or other securities law violations artificially inflated the price of a stock. Only persons who purchased the stock during this period are included in the class action suit.

Trading in Satyam ADS was halted after January 7, when Satyam chairman B Ramalinga Raju admitted to falsifying the accounts of the company. So far, more than 20 class action lawsuits have been filed against Satyam.

The complaint also alleges that Satyam's auditors PricewaterhouseCoopers, PricewaterhouseCooopers International, and PricewaterhouseCoopers were active participants in Satyam's fraud.

Satyam's new board has named Wachtell, Lipton, Rosen & Katz as it's lawyers to handle class action suits in the US.