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14
April
2009

Satyam-Tech Mahindra - The done deal!

An update from one of the tech companies that was in news beginning this year. Satyam Computer Services, the fraud-hit Indian IT company has been bought by another Tech Mahindra Ltd(jointly owned by Mahindra & Mahindra Ltd. and British Telecommunications plc) for $351 million or 31% stake.The offer of Rs 58  ($1.17) per share is about a 10th of what Satyam shares were worth about a year ago.The offer topped bids from Indian Engineering major Larsen & Tourbo, which offered Rs49.50 per share.L&T already owns 12% stake in Satyam. Tech Mahindra later plans to make offer for another 20% stake in open market.

The fraud of Satyam was widely reported world wide and was one of the major black mark for the tech outsourcing industry in India. It was covered in all newspapers/websites from Times of India to Newyork Times. Satyam was the bread and butter for more than 50,000 techies from India serving some of the fortune 500 clients worldwide. The fraud was country's biggest corporate fraud involving about Rs 8000 crore ($ 1.6 billion). Company had a market share of Rs 10,000 crore($2 billion) listed in Indian stock exchanges (BSE & NSE) and was also listed in NYSE. Indian Government and SEBI (the stock regulatory board in India) had to intervene and form a interim board at the peak of crisis.Satyam founder and the main accused in the fraud is behind bars ever since he admitted fraud and along with him, lot of other Satyam officials are also arrested.

The bid process was keenly watched worldwide and is also reported by all top news agencies. NYTimes reports here, CNN reports with this article and BBC reports like this.

Indian news papers/websites also covered this news with much excitement. Times of India, Indian Express, The Hindu and Rediff were few of the publications to report this. Every Indian including The Prime Minister were relieved after the successful bidding process that got completed today.Indian Prime Minister Manmohan Singh Monday said he was glad at the successful outcome of the auction to sell controlling stake in Satyam Computer Services and hoped scams like that perpetrated on the company would not recur.The prime minister had called the fraud a “blot” on India’s corporate governance and said those responsible will be brought to book at the earliest.

Author: pradeep