BUSINESS
Out-of-court settlement a la Upaid to avoid potential litigation being talked about ahead of results
Call it Upaid Inc redux.
Satyam Computer Services Ltd, or ‘Mahindra Satyam’, is in talks with the company’s tainted founder B Ramalinga Raju and a host of front companies floated and managed by his family members over a `1,230 crore claim, two sources privy to the development said.
Raju had, in his stunning confession on January 7, 2009, said about `1,230 crore was infused into Satyam to keep its operations going, though this was not recorded in the company’s books. Raju had allegedly borrowed these funds from about 50 unknown entities, most of them floated by members of his immediate and extended family.
These entities have been sounding out their intention to retrieve the money from Satyam since Raju is currently not in a position to pay the money back.
Maytas Infrastructure, a company floated by the Rajus (Ramalinga Raju’s son Teja Raju was at the helm of affairs till recently), has also claimed that inter-corporate deposits (ICDs) worth `390 crore were routed to Satyam by a group of shell companies apparently floated by the family members of Raju.
Ravi Parthasarthy, chairman of IL&FS, which controls Maytas now, has gone on record saying there was “forensic evidence” available to prove that the ICDs were indeed routed to Satyam. Though technically it is these shell companies, as borrowers from Maytas, which owe money to Maytas, considering their inability to pay back, Maytas has been working on a strategy to make the beneficiary — Satyam — cough it up.
The IL&FS top brass has also roped in the ministry of corporate affairs to intervene and make Satyam pay the ICDs back.
Efforts to reach Vineet Nayyar, chairman, Mahindra Satyam, were futile. An SMS message sent to him remained unanswered on Monday.
The new management of Satyam, under Tech Mahindra, has been rejecting these claims maintaining all through that there is no evidence of such infusions.
Satyam to pay Rs 700 cr to settle claim with the Rajus?
But now, sources said, efforts are on to bring this potential litigation to a logical end at the earliest and pay off the Raju companies.
According to the sources, the new management of Satyam is also looking at an amicable one-time-settlement kind of scheme with all the Raju entities.
“The proposal is still at an early stage. It is difficult for anyone to conclusively talk about the deal. But, certainly, there is one such proposal that is being worked out. We all know the end result —- that is an amicable, litigation-free settlement. What we still don’t know is the means to achieve it,” a source said.
Going by information available with the sources so far, Satyam would look at paying up to 60% of the amount claimed, or about Rs 730 crore. However, the Rajus are reportedly insisting on about Rs 1,000 crore, or about 80% of the Rs 1,230 crore claimed to have been infused.
“It should get settled anywhere between 60% and 80%,” the source said.
Though the details of the funds available with Satyam for paying out any such claim would be known only after the company announces its restated accounts on September 29, the Raju entities are willing to wait for the payout once Satyam recognises such a liability and factors that during the restatement.
Official sources at Satyam are ruling out any such deal calling the claim untenable.
Interestingly, this was the response official sources had given even during the days of the Upaid dispute. After claiming that the telecom solutions company had nothing in its favour to seek damages up to $1 billion in the forgery and fake documentation case, Satyam had finally agreed to pay $70 million in an out-of-court settlement.
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