Just when you thought, things couldn't get worse for Satyam Computers, they do.

The Upaid lawsuit in Texas, US, seeking over a billion dollars in compensation and also punitive damages (BTW, Texas is famous for giving fantastical awards in punitive damages), gets an updated application to restrain Satyam from frittering away its assets. I have blogged about it two days back. What I further discovered was that this Upaid story, even though it started in 2007 is not reported to the Indian exchanges or to the SEC. This is a serious non disclosure of material facts even though the fact is only of a contingent liability. Further developments including losing a case in London in an offshoot case is also not reported. This violates both SEC regulations and Indian listing agreement on disclosure obligations.

Financial Express reported possible insider trading based on the pattern on only-sell trades in Satyam over the past few months. Though the numbers sold are not very alarming I think it does make out a probably cause for suspicion and a serious investigation.

Yesterday, several papers reported that the World Bank had some three months back blacklisted Satyam from working with the Bank for a period of 8 years. It was barred by bribing Bank staff, oh sorry, what I meant was providing "improper benefits to bank staff". The Bank is apparently the 4th largest client of Satyam. If this is not material information to be reported to the Indian exchanges and SEC, what is? In an incredible statement, the company said it does not report on individual clients. Whoa so, why did it announce getting the contract in 2003, and we don't want to know about individual clients only your deeds. Also, this reflects very poorly on the transparency of the Bank which has been lecturing nations about the benefits of transparency and governance. Also as late at Oct 2008, Satyam has denied being blacklisted by the Bank, this is of course an actionable mis-statement.

Yesterday's Mint headlines has an interview based piece of T R Prasad an independent director of the Board. He says the related party inflated purchase of shares (blogged extensively in the past few day) was only cleared in principle 'but at what price, when and how was not decided'. Apparently, he also said a day before that, that the deal was not cleared by the Board. All of this is of course wholly inconsistent with what has been stated by the company and also by the Chair of that fateful Board meeting M Rammohan Rao. The official press release of 16th Dec clearly says the acquisition of Maytas Properties shall be immediate, and of Maytas Infra would be 31% plus open offer. So if things weren't bad enough for the independent directors, one independent director wishes to distance himself from the official press release of the company of the 16th after almost a week on the 22nd Dec. Faster thinking next time.

The claim that the valuation of the two companies was done by a 'big four' accounting firm, is also hotly denied by all four firms.

This is tranforming itself from an abject failure of corporate governance of independent directors into a serial mis-statements and suppressions by the company, independant directors, promoters and senior management.

PS: Many companies have rogue employees and face some liability on account of their individual mis-deeds for no fault of the company as a whole. In such cases, if proper reporting is not done as is required by disclosure regulations, it is not only violation of technical disclosure requirements, but also creates the suspicion that the senior managment was aware of or active in the misdeed(s). Contrast this episode with the Infosys facing a sexual harassment lawsuit because of the action of one of its officers.