Decks cleared for MSatyam, Tech Mahindra merger
'Satyam' name is likely to slip into history as Mahindra Group is unlikely to retain the tainted nomenclature for the combined entity After the...
'Satyam' name is likely to slip into history as Mahindra Group is unlikely to retain the tainted nomenclature for the combined entity After the merger, the combined entity is likely to emerge as India's fifth largest software company, next to Tata Consultancy Services, Infosys, Wipro and HCL. It will have with a total headcount of over 80,000 and annual revenues in the excess of $2.4 billion Hyderabad: All the decks were cleared for the merger of Mahindra Satyam, the renamed entity of scandal-hit Satyam Computer Services Limited, with its parent Tech Mahindra when the Andhra Pradesh High Court had given go-ahead for the merger process on Tuesday. The merger process, which was cleared by Bombay High Court in September 2012 and approved by financial regulators, got stuck when 35 entities including family members of Satyam Computers founder B Ramalinga Raju filed petitions in the AP High Court opposing the merger. The AP High Court in its judgment on Tuesday dismissed all the petitions, paving way for the merger. The court also stated that investigations into the accounting fraud in Satyam Computers would continue. "The High Court of Andhra Pradesh has approved the scheme of amalgamation and arrangement of Venturbay Consultants Private Limited, Satyam Computer Services Limited, C&S System Technologies Private Limited, CanvasM Technologies Limited and Mahindra Logisoft Business Solutions Limited with the company (Tech Mahindra)," Mahindra Satyam said in a filing to the bourses. After the merger, the combined entity is likely to emerge as India's fifth largest software company, next to Tata Consultancy Services, Infosys, Wipro and HCL. It will have with a total headcount of over 80,000 and annual revenues in the excess of $2.4 billion. C P Gurnani who played key role in revival of the Mahindra Satyam as its Chief Executive Officer has already been designated as the CEO of the merged entity. Currently, he is also Managing Director of Tech Mahindra. Sadly, Satyam name which put Andhra Pradesh on global IT map is likely to slip into history as the Mahindra Group is unlikely to retain the tainted name for the merged entity. "Mahindra Satyam has carried out a survey among employees, customers and other stakeholders on whether to retain the name Satyam. Unfortunately, majority of them are not in favour of retaining it as they feel the name reminds many of the scam. It is highly unlikely that Satyam name will be retained," a company source told The Hans India. Besides, many feel Tech Mahindra is also an inappropriate name for the merged entity as it is mostly associated with telecom vertical. It is said that Mahindra IT is already in use in some business communications with a disclaimer and that name may be finalized for the combined entity. "However, the process will take another two months as the company name has to be approved by the board and then registration has to be completed with RoC," the source said. On June 10, 2012, Mahindra Satyam and Tech Mahindra held extraordinary general meetings (AGMs) and got approval for merger process after boards of the both companies proposed a swap ratio of 2:17 (for every 17 shares held in Mahindra Satyam, shareholders will get two shares in Tech Mahindra). Subsequently, Bombay Stock Exchange (BSE), National Stock Exchange (NSE) and competition watchdog Competition Commission of India had given their approvals. In April 2009, Tech Mahindra, through its subsidiary Venturbay Consultants, took reins of the scandal-hit Satyam and renamed it as Mahindra Satyam after B Ramalinga Raju had admitted to a multi-crore accounting fraud in January 2009.
15 Dec 2019 9:34 PM GMT