Decks cleared for Mahindra Satyam’s merger with Tech Mahindra

Hyderabad, June 11 (IANS) The Andhra Pradesh High Court Tuesday gave its nod for the much-awaited merger of Mahindra Satyam with its parent firm Tech Mahindra, which will create a $2.4 billion entity, the fifth largest Indian IT firm.

Clearing the decks for the merger, Justice N.R.L. Nageswara Rao dismissed a batch of petitions filed to stall the move.

Opposing the merger, 35 individuals and companies including the family members of Satyam Computer Services' founder Ramalinga Raju, two entities owned by engineering and construction firm IL&FS and minority shareholders had filed the petitions.

The Raju family and IL&FS, in their petitions, sought a refund of Rs.1,230 crore they claim to have lent Satyam before a crisis hit in January 2009.

The judge also said all investigations into the accounting fraud at the erstwhile Satyam Computer Services would continue.

Raju had on Jan 7, 2009 confessed to fudging the accounts of Satyam for years to the tune of at least Rs.7,136 crore. The biggest fraud in India's corporate history plunged the Hyderabad-based company into a crisis.

Mahindra Satyam has welcomed the court order.

"We are pleased with the decision of the court and our faith in the judiciary stands vindicated. The next step will be to formally conclude the integration process and accelerate our ambitious focus towards becoming a stronger force to reckon with in the IT industry and delight our stakeholders," said a company spokesperson.

Tech Mahindra bought the fraud-hit firm in April 2009 in an auction conducted by government-appointed directors and re-branded it as Mahindra Satyam. Soon after the acquisition, the merger was proposed. However, the same was delayed due to various disputes both in India and abroad.

Mahindra Group on March 21 last year had announced the amalgamation of its two technology companies.

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Decks cleared for Mahindra Satyam's merger with Tech Mahindra