Business News, Financial News, Analysis, Commentary, Views, Opinion
Satyam Computer Services and the US Securities and Exchange Commission have decided to settle a civil litigation, pertaining to a massive fraud perpetrated by its promoters. Mahindra Satyam, the brand name by which the company now calls itself, will pay $10 million or Rs 45 crore to the SEC.
Satyam Computer Services (rebranded as Mahindra Satyam) today announced that it will restore variable pay to all its employees. The decision will win the hearts of all Satyam’s employees, who were devastated by the scam. After the relief that came with Tech Mahindra acquiring the company, getting back their monetary benefits will be a boost.
Continue ReadingThe government-nominated board of directors of Maytas Infra met today to consider a buyout proposal for the company. The company has said that it has received a proposal to substitute the existing promoters, the Ramalinga Raju family, and take over management control. The board has forwarded this proposal to the Company Law Board for appropriate directions.
The government has further reduced its role in Satyam Computer Services (rebranded as Mahindra Satyam), after Tech Mahindra completed the open offer process and then followed up by hiking its stake through a preferential allotment. That completes a major part of its task ensuring that Satyam stays afloat.
At first, it might seem that Tech Mahindra’s plans did not work out, as its open offer failed, leaving it with a 43% stake instead of a 51%. This setback hardly matters, however, if the two companies merge. A merger could mean that the group could repay the entire debt taken for the acquisition, using Satyam’s shares held by Tech Mahindra, if it so wishes.
When Tech Mahindra emerged as the successful bidder for the scam-ridden software company Satyam Computer Services, it seemed like the subsequent open offer would be a success.
But Satyam’s share price rose significantly, in the interim, as investors began to regain some confidence in its future, especially after its provisional results for the third quarter were made public. The company’s profitability was much better than what was feared. While the open offer was at Rs 58 the share closed today, the last day of the offer, at Rs 74.
Satyam Computer Services gets a new brand, Mahindra Satyam accompanied by the Mahindra flagship logo. It is not clear if the company will change its name too, as nothing is mentioned in the press release. Branding exercises can appear hyped and meaningless to some but at times, the symbolism can be quite revealing.
Satyam Computer Services has shared the disclosures it made earlier to bidders with its public shareholders. Tech Mahindra had then emerged as the successful bidder and subsequently made an open offer to Satyam’s shareholders.
Continue ReadingSatyam Computer Services has announced that Tech Mahindra has deposited $351mn in an escrow to fund the preferential allotment for a 31% stake. It has also deposited $231mn required for the 20% open offer. That completes the funding requirements for the Satyam acquisition. Tech Mahindra can now appoint four of its nominees on the Satyam board who will join the six government appointed nominees. Satyam will allot to Tech Mahindra the shares required for the 31% stake, after getting Sebi approval and fulfilment of other conditions.
Continue ReadingTech Mahindra’s acquisition of Satyam Computer Services is likely to proceed smoothly, as it is a government nominated board at the helm of affairs. That was evident in the speed with which the Company Law Board approved the preferential allotment to Tech Mahindra, to give it a 31% stake in Satyam.
Tech Mahindra can appoint four nominees on Satyam’s board while the existing six government nominees will continue to hold their positions. The new directors will get the same immunity that the existing directors have from any litigation in the country.
Continue Reading