Satyam Computer Services, the software services exporter embroiled in India’s biggest corporate fraud, agreed to pay $125 million to settle a shareholder lawsuit in federal court in New York.
The agreement, filed Wednesday before U.S. District Judge Barbara Jones in Manhattan, resolves litigation in which Satyam had argued U.S. shareholder lawsuits should be dismissed because its home country was the proper venue for the claims. The judge must approve the pact at a hearing to be scheduled later.
The company had argued the case brought by the lead plaintiff, the Mississippi Public Employees’ Retirement System, Jackson, should be dismissed because the $20 billion fund bought shares in India rather than American depository receipts in the U.S.
“This was a fairly dark cloud of uncertainty that has gone away,” Vineet Nayyar, chairman of Satyam, said in an interview. “With this uncertainty gone, it should reinforce client confidence.”
Satyam’s shares plunged 44% from Sept. 22 to Nov. 29 after then-Chairman Ramalinga Raju revealed an accounting fraud estimated by investigators at 100 billion rupees ($2.2 billion) and resigned. Investors in the U.S. filed at least a dozen class-action lawsuits that were consolidated before Ms. Jones.
Satyam entered into the settlement to “enhance its credibility and business opportunities in the United States market, and eliminate the burden, expense, uncertainty and distraction of further litigation,” according to the filing. The company didn’t admit any wrongdoing in the accord.