Hyderabad: Infrastructure Leasing & Financial Services Ltd (IL&FS) on Wednesday opposed the proposed merger of Mahindra Satyam with the software services firm’s parent Tech Mahindra Ltd.

A lawyer representing IL&FS argued that the official liquidator was yet to submit an opinion on a report by independent auditor Brahmayya & Co., which studied Mahindra Satyam’s books to determine whether money from purported creditors had found its way to the company when it was known as Satyam Computer Services Ltd.

“He has done half of the exercise. He has yet to do the other half of the job," senior counsel Venkatesh Dhond, representing Ekadanta Greenfields Pvt. Ltd, an entity of IL&FS, told the Andhra Pradesh high court. “In the absence of a certificate (by the liquidator), there can be no order…and it (the certificate) is of seminal importance."

An official liquidator is attached to a high court and has the power to examine a company’s records and negotiate with creditors when a winding-up petition is filed against a company. In this case, Ekadanta Greenfields has filed a winding-up petition against Satyam Computer Services Ltd, rebranded as Mahindra Satyam, seeking recovery of 23 crore it claims is owed to it.

The Andhra Pradesh high court has clubbed together petitions by minority shareholders against the merger swap ratio of two shares of Tech Mahindra for 17 Mahindra Satyam shares, and petitions by purported creditors claiming 1,230.40 crore they claim is owed to them.

The Brahmayya report cited a KPMG audit which found that Satyam had received a sum of 1,425 crore from 37 firms during 2006-08 into five of its bank accounts, but these amounts were not accounted for in books by the earlier management.

“The new management is justified in not crediting the amounts received from 37 companies in their names and not showing them (as) creditors in company’s books…," the auditor said.

The next hearing will take place on Monday.

Shares of Satyam Computer fell 3.45% on Wednesday to 124.40 on BSE, while the benchmark Sensex declined 0.65% to 18,884.19 points.

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