Mahindra Satyam-Tech Mahindra merger put on holdBy IANS
Monday, February 14, 2011
HYDERABAD - The process of Mahindra Satyam’s merger with parent firm Tech Mahindra has been put on hold in view of the ongoing investigations into Satyam fraud case by various agencies, said a senior official Monday.
Mahindra Satyam chief executive officer C.P. Gurnani told a news conference here that the merger required the approval of some of the agencies involved in the investigations.
He, however, said there was no legal provision to put the process on hold.
Mahindra Satyam chairman Vineet Nayyar said the two companies stand by their decision to merge.
“After Tech Mahindra acquired Satyam, we announced our intention to merge. The intention remains, but when we would trigger this has not yet been decided,” he said.
Nayyar dismissed as reports that Mahindra Satyam was trying for an out of court settlement of class action suits in the US.
The company faces the action suits for alleged violations of the US federal securities laws by Satyam Computer Services, which Tech Mahindra acquired in April 2009, a few months after Satyam was rattled by India’s biggest corporate fraud.
He said the legal challenges the company faced were more or less resolved.
“We had some issues with US Securities and Exchange Commission and I think they are also more or less resolved,” Nayyar said.
“On most of the legal cases we have made progress and we also continue to make progress in compliance with various regulators around the world. As a result, there are a few challenges in governance, finance, accounts and legal areas and most of them have been brought in containable and manageable mode,” he added.
Nayyar also clarified that Mahindra Satyam had no relationship with Maytas, an infrastructure firm owned by the family members of Satyam’s founder B. Ramalinga Raju.
“We have no relationship with Maytas other than the co-ownership between the founders of Maytas and Satyam,” he said.