Satyam faces class action lawsuit in US

Investors in Satyam's ADR have filed two class action suits against Satyam in the US.

Two US-based law firms Izard Nobel LLP and Vianale & Vianale LLP – have filed class action lawsuits against Satyam Computer on behalf of shareholders of the software services firm’s American Depository Receipts.

“A lawsuit seeking class action status has been filed in the United States District Court for the Southern District of New York on behalf of those who purchased the ADRs of Satyam Computer between January 6,2004 and January 6,2009,” Izard Nobel LLP said in a statement.

Another law firm Vianale & Vianale LLP has also announced that it has filed a class action lawsuit on behalf of purchasers of the American Depository Shares of Satyam Computer during the Class period January 6,2004 through January 6,2009.

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Trading on Satyam ADRs was suspended yesterday after it plunged by over 90 per cent to 0.85 dollars in pre-market trade in US following Satyam founder and chairman B Ramalinga Raju’s confession to a Rs 7,800 crore fraud in the company.

NYSE in a statement yesterday had said that “NYSE Regulation is currently evaluating the news relating to Satyam and will closely monitor further developments. The security will remain halted until further notice”.

Also,India’s Corporate Affairs Ministry and market regulator SEBI announced that the episode would be probed and action taken against the perpetrators of the fraud that entails inflating profits and creating fictitious assets.

While the government said the entire issue would be referred to the Serious Fraud Investigation Office,SEBI described it would act in tandem with the ministry.

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“I am now prepared to subject myself to the laws of the land and face consequences thereof,” Raju said in a letter,while announcing his resignation.