The proposal of Mahindra Satyam (the brand identity of Satyam Computer Services Ltd) for merger with its parent company Tech Mahindra is likely to take place by April-May 2012. The company is in talks with the US regulator, Securities and Exchange Commission (SEC), to clear the air on certain issues and is hopeful of its relisting on the New York Stock Exchange (NYSE).
“It is our intention to merge ... and we are in dialogue with the SEC to know the areas where we have problems. At present, there are certain issues which have to be sorted out, and we hope these to be settled by October. Integration involves some legal processes. Also, the proposal has to be cleared by the Andhra Pradesh and the Maharashtra high courts. We are still looking at April-May next year,” chairman Vineet Nayyar said on Monday.
On Satyam’s plans to relist on the NYSE, he said all class action suits have been cleared. It was one of the criteria laid down by the SEC. Except for a single suit with the Aberdeen Group (which is of a small amount), the company has cleared all law suits.
“We have paid Rs 569 crore towards the settlement of class action lawsuits in the US,” he said. On the lawsuit filed by Upaid, Nayyar said the company deposited $70 million in 2009-10 into an escrow account.
It has also agreed to make a payment of $10 million to the SEC under a settlement agreement related to the accounting fraud perpetrated at Satyam by its founder B Ramalinga Raju. According to the chief executive of Mahindra Satyam, C P Gurnani, the company saw a steady improvement in demand and planned to add about 12,000 staffers over the next four to five quarters through a mix of lateral and campus hiring.
“We have added 30 new logos (clients) in the fourth quarter. Internally, we count it as 12 accounts until the remaining generate a business of $250,000 each. We are aware of the challenges that lie ahead in this transformation journey. Accelerating profitable growth and building capability to deal with the scale are our key focus areas,” he said, while reiterating that the company did not give any discounts to gain contracts.
