Gets reprieve from apex consumer court on scam.
The legal teams of UK-based Upaid and Satyam Computer Services are holding talks for an out-of-court settlement of a case filed by the UK-based mobile payment services firm. The hearing of the case is on June 1.
Upaid has filed for damages exceeding $1 billion on charges of forgery, fraud and breach of contracts. The cases have been filed in a federal court and a state court in Texas, USA.
Industry sources say the verdict will be known as early as mid-June if there’s no settlement. “The maximum time taken for this case will be two-three weeks. This is a jury trial. So, once the proceedings begin, they will not stop till the matter is over,” said an informed source.
The source said Upaid would not agree to settle the case for $10 million (around Rs 40 crore), a figure reported by a section of the media.
When asked, Kiran Karnik, chairman of the Satyam board, said: “I would not like to comment as it (the matter) is sub judice.”
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A senior Satyam official said the company was interested in an out-of-court settlement, “We have been having informal discussions on this case and do not want to get into litigation. In the US, legal fees are huge. Typically, for a month, it runs into millions of dollars,” added the official.
Industry experts feel $50 million (around Rs 250 crore) is a fair amount for a settlement. “Upaid is a start-up firm and, frankly, $1 billion in damages seems to be far-fetched. The forgery allegations are a bit of a concern for Satyam, more than anything else,” said an investment banker.
In a related development, the National Consumer Disputes Redressal Commission (NCDRC) has refused to hear Midas Touch Investors Association (MTIA) — a consumer protection organisation — seeking Rs 4,987 crore compensation for 300,000 retail shareholders of the fraud-hit Satyam. “Since the CBI (Central Bureau of Investigation) and Sebi are investigating the case already, the Bench at the NCDRC rejected our plea,” said MTIA Director Virendra Jain. Jain said the organisation would take up this issue with the relevant ministry and the parliamentary committee after the elections. “We cannot approach the consumer court again as the NCDRC is the highest authorit,” he added.