Pomerantz Haudek Block Grossman & Gross LLP (www.pomerantzlaw.com) ("Pomerantz") has filed a class action lawsuit in the United States District Court, Southern District of New York, against Satyam Computer Services Limited ("Satyam")(NYSE:SAY) and certain officers of the Company. The class action, (Case No. 09-CV-00337) was filed on behalf of purchasers of the American Depository Receipts ("ADRs") of Satyam between January 6, 2004 through January 6, 2009, inclusive (the "Class Period"). The Complaint alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (15 U.S.C. Sections 78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder.
In addition to Satyam, the complaint names as defendants the admitted ringleader of this fraud, former Chairman B. Ramalinga Raju; his brother, B. Rama Raju, the Company's former Managing Director and CEO; and the former Chief Financial Officer, Srinivas Vadlamani. All of these individuals have been arrested by the Indian authorities for their complicity in this fraud.
The complaint alleges a multi-year massive fraud by these defendants, which has been admitted to by defendant Raju, in which these individuals cooked Satyam's books by, among other things, concocting $1 billion of cash that didn't exist, and overstating revenues and profits. The egregiousness of the fraud is evident from Raju's admissions in a letter to the Satyam board. Raju admitted that for the second quarter 1998 alone, Satyam reported $555 million in revenues when the actual number was $434 million; $136 million in profit when the correct number was only $12.5 million; and a reported hefty $1.1 billion in available cash, when it had a mere $66 million. Raju acknowledged that the fraudulent scheme "simply reached unmanageable proportions," which he likened to "riding a tiger, not knowing how to get off without being eaten."
The complaint further alleges that disclosure of this stunning fraud materially impacted the price of the Company's ADRs. Indeed, trading in the Company's ADRs was briefly halted after the fraud was revealed, and the ADRs are now currently trading between $1 and $2, a precipitous drop from the Company's 52-week high of $29.84.
If you purchased or acquired the ADRs of Satyam during the Class Period, you have until March 9, 2009 to ask the Court to appoint you as lead plaintiff for the class. Lead plaintiffs must meet certain legal requirements. Shareholders outside the United States may join the action. If you wish to review a copy of the Complaint, to discuss this action, or have any questions, please contact Shaheen Rushd (firstname.lastname@example.org) of the Pomerantz Firm at 888.476.6529 (or 888.4-POMLAW), toll free. Those who inquire by e-mail are encouraged to include their mailing address and telephone number.