Apex bank’s nod eludes Satyam

Apr 08, 2011 |

Hyderabad

April 7: Mahindra Satyam, which in February had agreed to pay $125 million to settle the class action suits in the US, is yet to get the Reserve Bank’s nod to transfer the funds, a senior company official said on Thursday.

“It (RBI) wanted some clarifications. We are in the process of submitting documents. It is just a matter of time,” the official said. RBI has to approve of the fund transfer as it involves huge foreign exchange, the official added. A group of investors in the US had filed suit for damages after the Satyam founder, Mr B. Ramalinga Raju, in January 2008 confessed to manipulating accounts for years together. It was later taken over by the Mahindras, which rebranded it as Mahindra Satyam.

On the day when the settlement was announced, Mr Vineet Nayyar, Mahindra Satyam’s chairman, had said that $125 million would come from cash reserves, which were at Rs 2,900 crore, and company did not see any problem in getting the money. The company may also approach the RBI with regard to the latest settlement with SEC, which has slapped penalty on Mahindra Satyam and its auditors PriceWaterhouse India up to $17.5 million.

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