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Satyam liability to be more than $100m: Experts

Published on Fri, Mar 13, 2009 at 16:45 | Source : CNBC-TV18

Updated at Sat, Mar 14, 2009 at 13:51

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Yesterday was the last day for bidders to express their interest in Satyam . Among those who have bid include L&T , Tech Mahindra , and Spice while Hinduja and HCL have opted out. The key to the winning bid will be ascertaining correctly the liability part of multiple shareholder class action suits against Satyam. Its ADR holders have filed multiple class action suits against Satyam in the US that could force the company to pay damages for the fraud that its founder Ramalinga Raju confessed to in January.
Also read: Tech Mah, L&T, Spice Corp emerge bidders for Satyam
CNBC TV18 learns from sources that a filed assessment pegged that liability at USD 100 million a figure that the Satyam board is reportedly relying on in this bidding process. This doesn't include the liability that Satyam's auditor Price Waterhouse maybe facing independently. But is this USD 100 million figure a realistic one, that's the big debate.
Also read: US research firm pegs Satyam lawsuit liabilities at $100mn

Kenneth Vianale, Vinale & Vianale agrees it could range any where from USD 100 million to USD 1 billion.

Sanford Dumain, Milberg LLP said USD 100 million does seem to be a low number and the resolution is probably years away. "I would expect, just looking into a crystal ball today, that this case would settle for a lot more than USD 100 million, assuming that their assets debate itself."

Mohit Saraf , Partner, Luthra & Luthra, agrees with Dumain and Vianale. "The liability could be far more than USD 100 million. Maybe this USD 100 million was coming from one basis which could be the past track record."

Here is a verbatim transcript of the exclusive interview with Kenneth Vianale, Sanford Dumain and Mohit Saraf on CNBC-TV18. Also watch the accompanying video.
Q: Update us on the process of this class action suit?
Vianale: The day was March 9th and its not the day that the lead plaintiff would be decided but its the plaintiff motion. The applications for the position that were due to be filed in court and those motions were filed a plenty, also many of them were filed in New York where a lawsuit was first filed and also in San Francisco where one of the firm who was representing as Satyam's investor filed a lawsuit.
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