According to the TOI reports, The Telangana High Court has said the company PricewaterhouseCoopers (PwC) can sue Satyam (now merged into Tech Mahindra) founder B Ramalinga Raju for Rs 100 crore for sullying the audit firm’s reputation
The High Court bench comprised justices P Naveen Rao and Nagesh Bhimapaka. The bench has dismissed a civil revision petition filed by Ramalinga Raju against the decision of a civil court in Hyderabad.
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PwC was the statutory auditor of Satyam Computers from 2000 to 2009. The company had sued Raju and associates for the damages it suffered ever since his confession in January 2009.
“They perpetrated the fraud on us and due to their deceitful conduct, our company’s image suffered immensely and we lost a lot of business,” PwC said.
Understanding the Background
B Ramalinga Raju has been sued for defaming the company’s reputation and business due to which it incurred a huge amount of losses.
The company was earlier suspected crime of fraud committed by Raju and associates. Due to this, the company suffered a huge loss of clients and profits and irreparable commercial damages.
Additionally, post-Tech Mahindra took over Satyam Computers in 2009 K Vivek Reddy, counsel for Tech Mahindra filed a petition. The petition aimed to consolidate Rs 223 crore difference caused by Raju and associates.
PwC presented against Satyam (now merged into Tech Mahindra) founder B Ramalinga Raju that provisions of the Partnership Act are not applicable.
The bench said, “No agreement was entered into between Raju, Satyam, and PwC.”
“Therefore, there is no scope to assume a contractual relationship between the company and the auditor as sought to be urged by Raju,” the bench said.
Satyam founder B Ramalinga Raju Former allegations against PwC
Raju argued that the suit of PwC was not maintainable since the audit partnership firm was not registered and that Section 69(2) of the Partnership Act, 1932.
Court Current Orders
The Telangana High Court has dismissed the civil revision petition by Ramalinga Raju. Now, a civil court in Hyderabad will be hearing the suit filed by PwC against Raju and other associates of the Satyam scam.