Mahindra Satyam posted loss of Rs. 327 crore after litigation charges

Mahindra Satyam posted loss of Rs. 327 crore
Mahindra Satyam, the IT firm based in Hyderabad, reported net loss of Rs. 327 crore for the quarter ending March 2011 after the exceptional expenditure is made towards the legal settlement with Security and Exchange Commission (SEC) USA.

The settlement is done towards the loss to US companies after the accounting fraud is exposed in the company.

The company has posted net revenue of Rs. 1375 crore for the quarter. As, company law board has permitted the company from not publishing the December 2008 to March 2010 quarter results because of the spotting of fraud in the company, no data is available for comparison.

During the quarter, the company incurred an expenditure of Rs 571.5 crore related to restructuring, forensic investigation and litigation support, class action settlement consideration and provisioning for impairment losses in subsidiaries.

The company posted net loss for the year ending March 2011 at Rs. 147 crore from Rs. 125 crore in the same period last year. Income from operations declined to Rs 5,145 crore in the January-March period from Rs 5,481 crore for the same period last year.

The company deposited Rs. 327 crore during fiscal year 2010 in an escrow account for the settlement towards the litigation. The company has also agreed to make a payment of $10 million (Rs 46.7 crore) to the US Securities and Exchange Commission (SEC) under a settlement agreement related to the accounting fraud perpetrated at the firm by its founder and former managing director Ramalinga Raju.

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