Mahindra Satyam resolves global investor claims
Clients Satyam Computer Services Limited
Jones Day resolved world-wide claims brought against Mahindra Satyam by former investors in connection with the alleged admission of Satyam's former Chairman that he deliberately misstated the Company's accounts for several years.
Mahindra Satyam, led by new management following a strategic investment by Tech Mahindra, was represented in: (i) defending and settling claims brought by Aberdeen Global and various other investment funds in the Commercial Court in London, (ii) defending and settling an investor class action brought in the Southern District of New York, and (iii) an opt-out investor action initially filed in the Eastern District of Pennsylvania. All of the litigations and settlements involved complex issues of Indian, English, and United States federal and state laws.
The U.S. class action settlement, the first of its kind involving an Indian company, provides for the federal class action settlement mechanism to operate in harmony with various Indian regulatory, tax and judicial approvals or decisions, such as those from the Reserve Bank of India and the Authority for Advance Rulings on taxation.
In the English proceedings, Satyam mounted a wide-reaching forum challenge which encompassed the full spectrum of factors taken into consideration when determining the question of forum and which incorporated numerous Indian law arguments.
Jones Day had previously advised Tech Mahindra in its successful acquisition of Satyam through an auction process undertaken by the Government of India following the events of January 2009.
Widely described as the "Enron of India," the Satyam scandal was the largest in India's corporate history. Jones Day's "One Firm" approach was instrumental in the favorable resolution of Satyam's legal issues and its return to profitability. Specifically, Jones Day lawyers from various U.S. and international offices, and from practice groups as diverse as Global Disputes, Securities Litigation & SEC Enforcement, Mergers & Acquisitions, Tax, Capital Markets, and Financial Institutions Litigation & Regulation functioned as one team to provide Mahindra Satyam seamless representation across all jurisdictions. In addition, the Indian government's quick and unprecedented intervention, and Tech Mahindra's acquisition and eventual resurrection of Satyam, are credited with saving thousands of jobs and restoring the reputation of India's marquee Information Technology industry.