Merger with TechM after restating accounts

Merger with TechM after restating accounts
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First Published: Mon, Oct 26 2009. 10 35 PM IST

Integration: C.P. Gurnani. Bloomberg
Integration: C.P. Gurnani. Bloomberg
Updated: Mon, Oct 26 2009. 10 35 PM IST
Hyderabad: The fraud-hit Satyam Computer Services Ltd, now rebranded Mahindra Satyam, will merge into its new promoter Tech Mahindra Ltd (TechM) after restating its accounts, new Satyam chief executive C.P. Gurnani said on Monday.
Integration: C.P. Gurnani. Bloomberg
The Company Law Board had given Satyam until June 2010 to restate its accounts.
Gurnani didn’t specify a time for the merger but said it was necessary to restate the accounts to have a basis for the merger ratios.
In a meeting with reporters in Hyderabad, he said Satyam’s profit margins had improved to a “little over 3%” as it shed some flab, but declined more details. Satyam lost some 100 out of about 500 customers after its founder B. Ramalinga Raju confessed to the country’s largest corporate swindle of Rs7,136 crore on 7 January. Raju had then said the profit margin had declined to less than 3%.
Mahindra Satyam has hired US-based consultancy Bain and Co. to win back customers, Gurnani said. Satyam, however, is maintaining its prices. “As a Mahindra Satyam management, neither we have gone and asked for higher price from our customers, nor did our customers ask us for lower prices,” he said.
Gurnani also said the firm’s new management has no plans to delist its shares from the New York Stock Exchange. He added that the new management has evolved a strategy to settle all the legal issues related to Satyam, including the $1 billion (Rs4,700 crore) claim by UK online and mobile payments firm Upaid Systems Ltd.
On Monday, Satyam shares fell by about 1% to end at Rs109.50 each on the Bombay Stock Exchange, while the benchmark Sensex index dropped 0.42% to 16,740.50 points.
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First Published: Mon, Oct 26 2009. 10 35 PM IST