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Upaid seeks depositions of top Satyam execs

December 20, 2008 09:01 IST

To add to Satyam Computer Services' woes, British Virgin Island-based online and mobile payment services player Upaid Systems has filed a motion in the Collin County Texas district court, requesting depositions of company chairman B Ramalinga Raju, chief financial officer Srinivas Vadlamani and global head of corporate governance G Jayaram 'in connection with the attempt earlier this week to strip all surplus cash from the company in a $1.6 billion related-party transaction benefiting the family of Satyam's founder-chairman'.

They have urged the court to ask Satyam for depositions and to respond to Upaid's requests for production of documents, dated December 17, 2008, within 30 days.

Upaid claimed it had served requests for production of documents related to the 'now scuttled Maytas transfers on Satyam' on Friday, but now had to submit this motion to the court 'because Satyam had repeatedly resisted its efforts to depose Raju and Vadlamani in the case.'

In light of Satyam's professed desire to dispose of its cash reserves 'in a few days', Upaid cannot afford to engage in a letter writing campaign with the former's counsel that will result in nothing but affording Satyam sufficient time to impermissibly deplete the assets that will be needed to satisfy a judgement in the cases. . .".

A Satyam spokesperson refused to comment as the matter was subjudice.

The current motion is in reply to a disparagement case that Satyam had filed against Upaid wherein the former had claimed that the payment services firm has been disparaging them in the public domain by commenting on the fraud and forgery case that the latter has filed.

The petitioners admit that '. . .while, in the absence of discovery, Upaid does not know all of the necessary facts to conclusively determine whether the proposed transaction was fraudulent...

'The related-party nature of the transactions and the fact that the press and analyst reports have uniformly criticised the proposed deals provide Upaid with a good faith basis to believe that the Maytas transactions were in fact designed to be fraudulent transfers'.

The company has cited the Texas Uniform Fraudulent Transfers Act which sets out a non-exhaustive list of 'badges of fraud,' to be considered in determining whether a transfer was made with actual intent to defraud. . ..

In fact, there are three cases between the two companies that are in the court. Two relate to allegations of forgery, fraud and breach of contracts, which were filed by Upaid in the Federal Court in Texas and State Court in Texas. The third was filed by Satyam against Upaid a month ago in Texas.

Upaid has said in these suits that it has suffered substantial damages that exceed $1 billion.

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