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.
Clearing the decks for the merger, Justice N.R.L. Nageswara Rao dismissed a batch of petitions filed to stall the move.
The merger will create a $2.4 billion entity, the fifth largest Indian IT firm.
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.
Tech Mahindra bought the fraud-hit in April 2009 in an auction conducted by government-appointed directors and re-branded the firm 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, creating a $2.4-billion entity.
“This merger is a key part of our strategy to deliver industry leading performance and this would make us a company with an annual revenue of $2.4-billion approximately, with more than 75,000 workforce and over 350 active clients across 54 countries,” Tech Mahindra vice-chairman and managing director Vineet Nayyar, who is also chairman of Mahindra Satyam, had said.
The merger proposal was cleared by various bodies, including the Competition Commission of India, BSE Ltd, National Stock Exchange and the Bombay High Court.