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No action so far on Satyam: SEC
January 28, 2009 15:24 IST
US market regulator Securities and Exchange Commission said on Wednesday it is yet to take any 'disciplinary action' in the Satyam [Get Quote] scandal, but did not rule out appropriate regulatory and enforcement steps to protect the investors.
The New York Stock Exchange-listed Indian IT major Satyam Computer Services' founder and then-chairman Ramalinga Raju had shocked the world three weeks ago on January 7 with the disclosure of a massive financial wrongdoing to the tune of over a billion dollar at the company.
This was followed by the NYSE suspending trading in Satyam shares the very same day. Trading resumed on January 12 after assessing the company's regulatory filings and its suitability to remain listed at the bourses.
Asked how the US regulator was responding to accounting fraud at Satyam, John Heine, Deputy Director at the SEC Office of Public Affairs, told PTI in an emailed statement, "There has been no public disciplinary action by the SEC (for example a court case or administrative proceedings) involving Satyam."
Separately, about a dozen class action lawsuits have been already filed in the various US courts on behalf of thousands of American investors in the Indian company, which is also listed in the US and Europe.
The scam is already being probed by various Indian authorities, including by the country's market regulator Securities and Exchange Board of India.
SEC is believed to be in touch with its Indian counterpart SEBI on the developments in the probe.
Asked whether SEC has started an independent probe on Satyam or is it assisting authorities in India with their investigation, Heine declined to comment and said, "Staff at SEC are not authorised to either confirm or deny the existence of any investigatory activity."
On how SEC was planning to protect investors' interest if the company was found to have violated rules and regulations, the SEC official said, "The SEC has a long history of taking appropriate regulatory and enforcement actions in situations involving violations of the US federal securities laws and SEC regulations in order to protect investors."
Heine also declined to comment on whether SEC was planning to make regulations more stringent for foreign entities listed on American bourses.
One of the American law firms, which have filed class action lawsuits related to the Satyam scam, Vianale & Vianale LLP has said that the damages to be sought from the company could be in hundreds of millions of dollars.
Vianale & Vianale's lawyer Keneth J Vianale told PTI in an emailed statement: "We have not alleged a specific damages amount that we are seeking. That will be a subject of expert testimony.
"However, in cases of this sort, it is not unusual for the damages to be in the hundreds of millions of dollars."
Before the trading halt by NYSE on January 7, Satyam shares had plunged by over 90 per cent in off-market trade, while after resumption of normal trading it fell by 84 per cent to close at $1.46. NYSE has said that it would delist Satyam only if its average share price for 30 trading sessions dips below $1.
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