After threatening to impact the future Satyam Computer Services (yes, that’s still the company’s name on the Bombay Stock Exchange despite being publicly “branded” Mahindra Satyam), the mobile technology company Upaid has settled its dispute with the fraud-hit company for $70 million.
Upaid, which is based out of British Virgin Islands, had filed a forgery and fraud case against Satyam and its erstwhile management headed by disgraced founder B Ramalinga Raju, claiming $1 billion in damages.
However, since taking over the management of Satyam, Tech Mahindra was in dialogue with Upaid for an out-of-court settlement. Satyam would pay the agreed $70 million in two parts — $45 million immediately and the balance within 12 months. The agreement also makes it an obligation on part of Upaid to offer perpetual royalty free patents on the products to Satyam.
Sources tracking the development were not willing to give any credence to perpetual and royalty-free rights for the technology that is available with Upaid.
“The technology was sought after way back in 2002. One has to wait and watch how much revenues Satyam would be able to generate on this seven-year old technology,” a source said.
Upaid was once a customer of Satyam seeking the software company’s services for developing a specific technology for pre-paid mobile services. Upaid had paid about $10 million to Satyam and a part of the payment was also done in the form of shares since Upaid was not in a position to pay cash. Satyam had developed and delivered the technology between 1997 and 2002.
However, trouble broke out when Upaid was fighting some of its rivals with the patent it had on the technology offered by Satyam. The documentation and the papers that were offered to Upaid by Satyam were found to be having forged signatures of some of the members of the 20-strong team involved in the project. In fact, this came to light only after one of the former Satyam employees declaring that he did not sign on the technology transfer papers though his signature was very much on the documents. Aggrieved with this, Upaid sued Satyam with forgery and fraud charges and claimed $1 billion in damages.
This case after moving from one court to other finally landed in a US court and was taken up for trial. Meanwhile, the accounting fraud in Satyam and the arrest of its founder Raju, too, had an impact on the case. In fact, Upaid had sought the deposition of Raju, Satyam’s ex-CFO Srinivas Vadlamani and the head of compliance Jayaraman.
However, much before the deposition was to happen, the management of Satyam had gone into the hands of Tech Mahindra. Since, the teams of Tech Mahindra were engaged in a dialogue with Upaid and its CEO Simon Joyce.
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