Government stayed clear of Satyam to avoid lawsuits: ex-minister
08 January 2010
Fear of lawsuits in the US prevented the government from becoming a party to the rehabilitation of the scam-hit ridden Satyam Computer Services, according to Prem Chand Gupta, who was union corporate affairs minister when the fraud broke almost exactly a year ago.
"Although some of my colleagues had given public statements that the government would provide funding to Satyam ... if the government had become a party in the whole issue, there would have been class suits (in the US) against the government for not performing its duty of corporate governance," The Economic Times report quoted him as saying.
The report was unclear about when exactly Gupta made this statement.
''Raju's confession came as a jolt to me ... as the company had operations in about 60 countries and employed about 53,000 people," he said, recalling the e-mail sent by Raju to SEBI on January 7 last year.
Although Satyam Computer was bought over by Tech Mahindra after competitive bidding and renamed Mahindra Satyam, it is facing about 12 class action suits in the US that may result in huge liabilities for the firm. (See: Satyam is now Mahindra Satyam)
During the process of rehabilitating Satyam, the government acted as a facilitator, carrying out the Company Law Board's orders, and did not take any financial liability.