Satyam Investors’ U.S. Lawsuit Over Audit Settled by PwC for $25.5 Million
Investors in Satyam Computer Services Ltd. (SCS) settled a lawsuit against PricewaterhouseCoopers LLP for $25.5 million related to its audit of the Indian firm that included a $1 billion overstatement of assets.
Satyam, the software exporter embroiled in India’s biggest corporate fraud probe, reached a $125 million settlement in February in the class action in New York. Satyam agreed last month to pay $10 million to settle a U.S. Securities and Exchange Commission lawsuit.
PricewaterhouseCoopers and four related entities audited or played a role in the audits of Satyam’s financial statements, according to the shareholders’ complaint. The settlement, which requires a judge’s approval, was disclosed in filings April 29 in federal court in Manhattan.
“Plaintiffs and lead counsel believe that the proposed PwC settlement represents an excellent result and is in the best interests of the class,” lawyers for the investors wrote in court papers.
In September, Satyam, based in Hyderabad, India, reported its first annual earnings in two years. Former Chairman Ramalinga Raju disclosed in January 2009 that he overstated Satyam’s assets by $1 billion, triggering a stock plunge and investor lawsuits in the U.S. Tech Mahindra Ltd. (TECHM), based in Pune, India, acquired control of the software-services provider in May 2009. Satyam’s American depositary receipts traded on the New York Stock Exchange.
PricewaterhouseCoopers India said in a statement it has reached an agreement to settle the class action arising out of its Satyam audits.
``The settlement agreement, if approved, would release all of the the named PwC defendants,'' according to the statement.
In addition to London-based PricewaterhouseCoopers International Ltd., related India-based companies covered by the settlement are Price Waterhouse (Bangalore), PricewaterhouseCoopers Private Ltd. and Lovelock & Lewes.
The case is In re Satyam Computer Services Ltd. Securities Litigation, 09-md-2027, U.S. District Court, Southern District of New York (Manhattan).
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