Executives from India's Tech Mahindra, the firm set to take over scandal-rocked Satyam Computer Services, met their counterparts on Monday, with funding towards the buyout now complete. Tech Mahindra paid nearly 600 million dollars for a majority share of Satyam, which has been struggling since its founder confessed to falsifying its accounts in India's biggest ever accounting scandal.
"Tech Mahindra is now ready to take over as new owners of Satyam," Kiran Karnik, chairman of Satyam, told media at Satyam's headquarters in the southern city of Hyderabad, where the executives met. The take-over propels Tech Mahindra to the top-tier of India's software companies. "Satyam may not be a racing craft yet, but it is definitely not a sinking ship," Anand Mahindra, chairman of Tech Mahindra, told reporters.
Tech Mahindra officials said Satyam would remain a standalone entity, with "its leadership continuing to drive operations". Industry speculation was that Satyam would be merged. "We reassure stakeholders that priority would be to retain current customers and win back business lost due to the crisis," said Vineet Nayyar, chief executive of Tech Mahindra.
Last week, Tech Mahindra outbid front-runner Larsen and Toubro, which already had a 12 percent stake in Satyam. Tech Mahindra bid 58 rupees a share against L & T's 45.90 rupees a share. Satyam, ranked as India's fourth-largest outsourcer by revenues when the scandal broke, acts as back office for some of the world's biggest companies such as Nestle SA, General Electric Co and General Motors Corp.
Tech Mahindra is majority-owned by Mahindra and Mahindra, India's leading utility vehicle and tractor maker, and one of the country's top 10 industrial houses. British Telecommunications Plc holds a minority stake. Satyam's founder chairman B.Ramalinga Raju, his brother and seven other people, including two Price Waterhouse auditors, have been jailed on charges of conspiracy, cheating, forgery and falsification of accounts.