US Law Firm Claims $500 Million Damages From Indian Software Maker

Early this year, Indian outsourcing company Satyam’s former CEO Ramalingam Raju accepted in a letter to all shareholders that he’d fudged the accounting books and inflated profits. The fraud amount to almost $2 billion. The shares of the company immediately tanked and the future of the company looks debatable today.

I’ve been following this scandal because outside of Enron and Madoff (which was just a Ponzi scheme, not corporate fraud), the Satyam has become the biggest case of corporate fraud in world financial history in recent times. That Satyam dealt with sensitive data as an outsourcing company makes it double interesting (and perhaps catastrophic).

Since the company was also listed in American stock exchanges and had several American stock holders, US shareholders of the company have been keen to put up the management board up for trial and get compensation for their loss. US Law firm Vianale and Vianale reprsented these stockholders and filed a class action law suit against the company. As per the court records, Vianale and Vianale has asked for $500 million in compensation.

Word leaked out today that Vianale and Vianale was open to (and pushing for) an out of court settlement. That would be a win-win for both the company and the stockholders as it could ease the company’s legal woes and give the stockholders a quick settlement.

If you’re interested in further reading about this case, get the intial scoop here with the CEO’s letter to the board. What can I say? Madoff, Satyam…this seems to be the season of financial disasters. At least some law firms will make money representing all these pissed off clients.