Satyam says no out-of-court settlement with creditors

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Satyam says no out-of-court settlement with creditors

Scam fallout: 37 creditors claiming Rs 1,030 crore but Mahindra Satyam rules out out-of-court settlement.

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Mahindra Satyam has denied claims of media reports that it is looking at an out-of-court settlement with its creditors.

Recently, reports said about 37 creditors were claiming about Rs 1,030 crore as dues from the company but the new management, led by Executive Vice Chairman Vineet Nayyar, categorically denied any out-of-court settlement.

Mahindra Satyam (Satyam Computers in its earlier avatar) was taken over by the Mahindra management in a government-approved auction after its erstwhile chairman and founder Ramalinga Raju confessed to inflating the company's balance sheet. The Satyam scam, which took place in January 2009, left the company in dire straits eroding investor wealth and had creditors lining up for dues.

The Mahindra Satyam stock also fell about 10% on the stock exchanges on a CLSA report exhorting investors to exit the company. CLSA said the Satyam did not have fundamental value trading at current levels as normal financials of the company would be known only by June 2010.

Responding to the query why Mahindra Satyam was not at least disclosing rough figures, Nayyar said it was obligated to the US market regulator SEC and India's SEBI to disclose only audited numbers. "We don't want to create confusion in the market by putting out rough figures and in six months time, the audited numbers would be available to everyone."

Nayyar said Satyam was not holding back its numbers on fears that petitioners of the various class action suits it faces may revise their claims if the numbers were good. "The numbers will be out much before the class action suits come to their conclusions."

The Mahindra Satyam board was the final authority to decide on when the audited data would be released, Nayyar said.