SC turns down plea to stall Satyam-Tech M merger

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: Apr 6 2013, 17:00pm hrs
The Supreme Court on Friday rejected the appeal of Ekadanta Greenfields, a subsidiary of IL&FS Engineering and Construction, seeking to stall the merger of Satyam Computer Services (now Mahindra Satyam) with Tech Mahindra.

A bench headed by Justice KS Radhakrishnan rejected the plea against the Andhra Pradesh HC order that refused to stay the merger proceedings pending before it.

Several petitions were filed against Satyam ever since it fell into crisis in January 2009 after its founder Ramalinga Raju confessed to the country's biggest corporate accounting fraud.

Ekadanta, one of the entities promoted by the family members of Satyam's founder Raju, which was later acquired by IL&FS when it bought Maytas Infra, had earlier filed a winding-up petition in HC against Satyam Computer alleging default in payment of nearly Rs 23 crore.

Challenging the March 20 order of the HC, Ekadanata in its appeal said that the HC committed an error by holding that the court can make an inquiry despite observing that even if the official liquidator (OL) had declined to certify that the affairs of the company were not being conduced in a manner prejudicial to the interest of the members or the public.

In the absence of such a report, the court had no jurisdiction to consider the scheme and any further proceedings by the court are wholly without jurisdiction and/or a nullity, the petition stated.

It further added that the HC proceeding with the merger case virtually tantamounts to rewriting the provisions of the Companies Act in so far as the jurisdiction and the role of OL and the company court is concerned.