Mumbai: One American court has dealt a blow to STI, a unit of the Vedanta Group-backed optical fibre maker Sterlite Technologies (STL), with damages of $96 million (approximately Rs. 806 crore) for infringement of trade rights relating to its Italian rival Prysmian.
STL said in a statement that it will “aggressively” challenge the ruling. The company, which includes mining group Vedanta led by Anil Agarwal has a 45% stake, reported a loss of Rs 48 crore in the first quarter of fiscal 2025, on a turnover of Rs 1,218 crore.
The company said in a statement to U.S. stock exchanges on Wednesday that it has decided to “aggressively appeal the recent verdict,” which was not supported by the evidence and testimony presented in the case. “STI reiterated its full commitment to the U.S. market and to its employees, distributors, sales agents and customers in the region, several of whom testified on STI’s behalf in the trial.”
After a three-year struggle, a South Carolina The jury ruled on August 9 that Sterlite Technologies' US subsidiary STI was in illegal possession of Prysmian's trade secrets including customers, new products and plans for production expansion.
According to Italy's Prysmian, thousands of pages of documents were even found in the possession of executives at Sterlite's headquarters in Pune, India, led by Ankit Agarwal.
“The jury found that Sterlite was unjustly enriched by stealing Prysmian’s trade secrets and awarded Sterlite Technologies, Inc. $96.5 million in damages,” Prysmian said in a statement to the stock exchanges.
“Furthermore, the jury ruled that Stephen Szymanski was unlawfully enriched through misappropriation of Prysmian's trade secrets and was awarded $200,000 to Mr. (Stephen) Szymanski, personally.”
Szymanski led Prysmian's fiber optic cable business in North America and joined Sterlite, a direct competitor, in August 2020.
“This case came down to the basic principle of right versus wrong, and we are pleased that the jury reached this decision,” said Andrea Pirondini, CEO of Prysmian North America. “It was clear that we had a strong case, and the jury’s decision affirms how America views trade secret protection.”
Experts noted that the ruling not only imposes one of the largest fines on an Indian fiber optic company, but it could also impact STL's ability to participate in the US's $42.45 billion BEAD project, which is being funded by the federal government.
They added that both Italy's Prysmian and India's STL have made significant investments in the US to take advantage of the growing broadband market.
Prysmian invested $30 million in its Jackson, Tennessee, plant and carried out a $50 million multi-year modernization project at its fiber optic facility in Claremont, North Carolina.
STL, on the other hand, recently announced that it has complied with the “Build America, Buy America” (BABA) provisions of U.S. law required for participation in the BEAD project. It also made a $56 million production investment in the “Palmetto Plant,” which was opened in September 2023 by the Governor of South Carolina.
However, STL director Ankit Agarwal denied that the ruling had any such implications.
“…we do not want this ruling to disrupt our plans to grow our presence in the US,” he said in a statement to US stock exchanges. “The company remains focused on expanding its US product offering and serving its customers for both federally funded and private fibre broadband build-out projects in the US.”
The Pune-based fibre producer has completed a capital raise of Rs 1,000 crore through a qualified institutional placement (QIP), aimed at reducing debt and strengthening its balance sheet.
The company's shares closed 1.10 per cent lower at Rs 135.10 on the BSE on Wednesday compared to its previous close.
