A US law firm has filed a class action lawsuit against Satyam Computer Services Ltd, whose Chairman Ramalinga Raju resigned yesterday after admitting to fraud. The case has been filed by Izard Nobel LLP in the United States District Court for the Southern District of New York on behalf of those who purchased the American Depository Receipts (ADRs) of Satyam between January 6, 2004 and January 6, 2009. Another law firm Vianale & Vianale LLP has also filed a class action suit against Satyam.
Izard Nobel has said in statement that after the disclosures by Raju, "the Company's ADRs fell $8.42, or 90%, prior to the opening of the New York Stock Exchange, which has suspended trading in Satyam's ADRs."
Besides this Satyam is already fighting a against British telecom services company Upaid Systems Ltd in a Texas court. Satyam was a vendor for Upaid, and in 2007 latter had filed a lawsuit alleging fraud, forgery, misrepresentation. The lawsuit was filed for breach of contract involving transfer of intellectual property rights issues arising from a project the firms jointly worked on in late 1990s.