Tech Mahindra will initiate its merger with Mahindra Satyam after the latter?s board meeting on September 29 and the process will be completed in 6-8 months, sources told FE on Tuesday.
?We were waiting for the restatement of accounts, and once that is announced, we will initiate the merger process. Then, it might take six to eight months for the merger to happen,? sources said. Tech Mahindra, which bought Satyam in April 2009, had earlier said that it could merge with the parent company only after the restated results for fiscal years 2009 and 2010 were announced. After seeking extensions twice, the Mahindra Satyam board is meeting on September 29 to consider the audited financial results for the years 2008-09 and 2009-10. Earlier, the Company Law Board (CLB) had extended time till September 30, 2010, for submission of financial results for the years 2008-09 and 2009-2010 after the company?s representation to CLB.
The company had not declared its audited accounts ever since the founder-chairman of the company Ramalinga Raju, in January 2009, admitted to having fudged the accounts of the company, to the tune of over Rs 7,800 crore. Besides, he also admitted to having overstated the company?s profits for years, using a fictitious cash balance of more than $1 billion.
However, sources in the know said meeting the deadline (for restatement of accounts) was a daunting task. Global auditing companies KPMG and Deloitte have been roped in for the accounts restatement. Incidentally, the New York Stock Exchange (NYSE) has also given Satyam time till October 15, 2010 to file its annual report and allow it to remain listed on NYSE.
Once the merger is through, Mahindra Satyam will go all out to strengthen its brand. In a recent interview to FE, CP Gurnani, CEO had said that the company is open to both organic and inorganic routes of growth. ?In partnership with Tech Mahindra, we now have the capability to provide communications services of a very comprehensive sort, starting from managing large corporate networks, to remote infrastructure management and from the end-client perspective, mobility solutions for a range of industries,? he had said.
