Satyam accounting fraud resulted in losses of thousands of crores to its shareholders. Absence of any provision for awarding compensation to the duped investors- in the SEBI Act and the Companies Act- highlighted the glaring weaknesses in the Laws for investor protection and inadequate provisions for confiscation / disgorgement of illegal gains was another.
Midas, in a path breaking endeavor, filed a petition on behalf of 3 lakh individual investors, under the Consumer Protection Act seeking Rs. 4987 crore damages from Satyam, Raju brothers, its statutory auditors, Price Waterhouse and independent directors. Such a petition, modeled on Class Action Suits prevalent in U.S., was filed for the first time in India.
Midas Petition before the National Commission and its appeal before Hon’ble Supreme Court were dismissed leaving the investors in a lurch.