February 17, 2011 / 1:56 AM / 9 years ago

Satyam to pay $125 mln, settle US suit over fraud

Ramalinga Raju (C), founder and former chairman of fraud-hit Satyam Computers, is escorted from a court in Hyderabad April 9, 2009. IREUTERS/Krishnendu Halder/Files

NEW YORK (Reuters) - Satyam Computer Services Ltd, a software servicing company, has agreed to pay $125 million to settle U.S. shareholder litigation arising from a 2009 accounting fraud that turned into India’s biggest corporate scandal.

The settlement does not cover various individuals including Ramalinga Raju, the company’s founder and former chairman, according to settlement papers filed late Wednesday in the U.S. district court in Manhattan.

Raju shocked investors in January 2009 when he said Satyam had overstated earnings and assets for years, in a fraud estimated to exceed $1.5 billion.

The settlement would resolve claims that Satyam misled investors about its business performance, court records show. A hearing to consider preliminary approval of the accord is set for Feb. 24, the records show.

Reporting by Jonathan Stempel; Editing by Gary Hill

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