Legal rows continue to haunt Mahindra Satyam as it pursues the merger plan with Tech Mahindra. Two of the 37 agricultural companies promoted by the kin of B. Ramalinga Raju filed legal notices in July on Mahindra Satyam, demanding that it repay loans.
“They have asked us to pay the amounts allegedly advanced by them with interest and damages,” Mr Vineet Nayyar, Chairman of Mahindra Satyam, has said. While admitting the receipt of the notices, he, however, did not comment on the size of the claims and names of the two firms. The company received letters from 37 firms regarding the alleged advances to the IT firm under the erstwhile management.
Mr Nayyar said the amount of alleged advances (Rs 1,230 crore) had been presented separately in the balance sheet under suspense account. “We are not in a position to predict the ultimate outcome of the legal proceedings,” he said in the results note.
The auditors have a made a “qualification” in their limited review report on this issue. It talked of the inability to determine whether any adjustments would be required in respect of the alleged advances and in respect of the non-accounting of any damages or compensation.
The limited review report also mentioned the “inability to comment on the consequential impact, if any, in relation to the Aberdeen (the UK) complaint filed by certain investors in the UK.
Though the company settled all the legal issues in the US, it still faces the UK class action suite that claimed that certain investors lost $150 million because of the massive financial fraud reported in 2009. The company settled the Aberdeen action on July 27 by agreeing to pay Rs 67 crore to the complainants.