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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.
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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.
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 ReadingTech Mahindra’s acquisition of Satyam Computer Services became more formal, after the appointment of four directors on its board. Vineet Nayyar, CP Gurnani, Sanjay Kalra and Ulhas N Yargop, all senior management personnel from Tech Mahindra, have been appointed on Satyam’s board effective June 1, 2009. The total board strength will go up to 10, including the six government appointed nominees, with Kiran Karnik as the chairman. Over a period of time, the government’s role in the board can be expected to diminish as they hand over charge to the new owners.
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 ReadingSatyam Computer Services has found a new home in Tech Mahindra. It will pay Rs 58 a share, or a premium 23% premium over Friday’s close, to acquire a 31% stake in Satyam. That speaks for Satyam’s value even after all the fudging of books or for Tech Mahindra’s desire to acquire Satyam. Either way, it’s an outcome that will please Satyam’s shareholders, board and the government itself. The shareholders got a good price, the board has managed the sale process without any glitches and the government would be happy that it remains in Indian hands.
Continue ReadingThe board is expected to open financial bids on Monday submitted by a few bidders remaining at the last stage. Among them are believed to be Tech Mahindra, L&T, Cognizant Technologies and some private equity funds. If the gap between the first and losing bids is less than 10%, then there will be open auction. The highest bidder in the auction will be declared the new owner.