Tech Mahindra, part of Indian business group Mahindra & Mahindra, won the race to acquire Satyam Computer Services on Monday, in a deal that’ll help the mid-sized outsourcer gain in size and also lift clarity on Satyam’s fate.

In a race that saw only a handful of bidders, Tech Mahindra beat rivals such as engineering conglomerate Larsen & Toubro and U.S.-listed Cognizant Technologies. Tech Mahindra agreed to buy a 31 percent stake in Satyam at 58 rupees, a 23 percent premium to Satyam’s last closing price.

(Click here to watch a Reuters Insight video)

Tech Mahindra, established more than 20 years ago as a joint venture between Mahindra & Mahindra and British Telecom, faces the daunting task of reshaping Satyam, a company at the heart of India’s biggest corporate scandal.

Ever since Satyam’s founder Ramalinga Raju shocked markets by disclosing the $1 billion-plus fraud, there have been numerous reports of Satyam’s employees jumping ship and some clients cutting back on orders to Satyam.  The company’s accounts are also still being restated and its U.S. liabilities are unclear.

Will the government continue to keep a close eye on Satyam? What’s going to be the fate of Satyam’s employees and clients? Will the Tech Mahindra-Satyam combination be able to grab market share from leaders Tata Consultancy, Infosys Technologies and Wipro? These are issues for which Tech Mahindra will need some answers pretty soon.

(Photo: Satyam Computer Services Chairman Kiran Karnik (2nd L) and board members Deepak Parekh (2nd R), Tarun Das (L) and T. N. Manoharan attend a news conference held by Satyam board members in Mumbai April 13, 2009. REUTERS/Arko Datta)

Three months after its founder Ramalinga Raju shocked markets by disclosing India’s biggest corporate scandal, Satyam Computer Services is desperately pinning its survival hopes on its auction set for April 13.

But only a handful of bidders are in the race due to lack of clarity over Satyam’s accounts and potential legal liabilities from U.S. lawsuits. Even if the company manages to find a buyer for a 51 percent stake, it’ll take a long time to instill confidence among employees already jumping shipand nervous clients.

What about the role of the government, whose appointed-board is due to choose the buyer the same week the country heads for national elections? Will the government remove its handpicked board or continue to keep a watchful eye on any new strategy chalked out by the new buyer?

Some finance industry players point out the similarity between Satyam’s deal and the deal for top Chinese electronics retailer GOME. The Chinese company is in talks with potential investors, while its founder and ex-chairman is under potential police investigation. There is a lot of uncertainty about both deals and government support, temporary or long-term, is key to shoring up both high-profile firms.

Satyam’s former chairman, former managing director and former chief financial officer are all being held in jail in the southern Indian city of Hyderabad.

Satyam has not reported earnings since October as the new auditors are still in the process of restating accounts. Local media report the final tally of likely bidders for Satyam is shrinking.

Will the auction be the first step in a much-needed recovery for a company once ranked as India’s fourth-biggest IT services exporter or spell more pain ahead?

“To define is to limit,” wrote T.S. Eliot.

Indeed sometimes, to limit things, they just may have been defined in a particular manner.

This struck home when I saw a communication by the World Bank on poverty estimates.

The World Bank produced an update of poverty numbers for the developing world based on an international price survey conducted in 2005.

The latest figures put the percentage of India’s people living below $1.25-a-day poverty line at 42 percent in 2005. This was an improvement on the 60 percent figure in 1981.

On the other hand, the government’s Economic Survey 2007-08 claims a poverty ratio of 22 percent for the country.

There is a huge difference between the two figures. According to the World Bank figure nearly half of India is defined as poor.

This rankles and also gets my attention a bit more than the previous figure. Perhaps it is the same for you.

So whose poor is really poor?

More importantly which figure is the one we want to believe? Which figure do we think conforms to our self image as a nation with the third-fastest growing economy, even after the global recession?

Here is a pop quiz.

How many items of clothing and footwear did you buy over the last one year?

Even if you are no Imelda Marcos, the chances are that the question has stumped you. Do you really keep track of these purchases?

Well, apparently the Planning Commission depends upon people doing so and being able to remember them when approached by the National Sample Survey Organisation for working out the poverty estimates.

This may or may not detract from the accuracy of the findings but it is nevertheless a thought.

Maybe the poor, or at least those who are classified as such, do remember for they have hardly purchased anything.

The Times of India reported last year on an affidavit filed by the Ministry for Health and Family Welfare before the Supreme Court which claims that if a person earns 455 rupees a month in an urban area then she is above the poverty line and hence not classified as poor. That’s 15.67 rupees in daily earnings.

Often, once consensus has been built on a particular fact, it is difficult to move arguments and policies that have been woven around it.

The subtleties and the arcane methodologies that may temper any statistician’s faith in his own figures never enter the popular realm.

The statistics are generated for and by the middle classes, the poor rarely get to see them or use them to enliven their lives even through an argument over a cup of tea.

It is the middle classes who manufacture and consume these statistics that should be more circumspect.

It should be noted that the World Bank estimate of poverty at 24 percent, based on the dollar-a-day poverty line as opposed to $1.25-a-day, is more in tune with the Economic Survey.

Shouldn’t we in tandem with the growing stature of our economy choose a more generous definition of poverty especially for the purpose of public discourse?

Or do we want to continue indulging and deluding ourselves with the same sort of creative accounting as the Satyam promoters did and meet our come-uppance one day?

Hold on to cash and don’t jump in to help family-owned firms.

Satyam Computer Services got this stern message this week when it was forced to dump a plan to spend $1.6 billion to buy two builders, part-owned by Satyam’s chairman and other insiders.

Ramalinga Raju, chairman, Satyam Computer Services is seen in his office in Hyderabad in this undated handout photograph. REUTERS/Handout

The move sent shockwaves across a country known for its trailblazing software industry, and triggered a cloud over corporate governance in India.

“All in the Family,” screamed the Economic Times on its front page, highlighting a furious reaction from the investment community.

Satyam’s move to buy control of Maytas Properties and Maytas Infrastructure was killed just 12 hours after it was announced.

Maytas is Satyam spelt backwards.

Satyam announced the deals after Indian markets closed on Tuesday and its U.S. shares more than halved. In the wee hours of Wednesday, Satyam bowed to investor angst and performed its U-turn, cancelling the deals.

But by then, the damage had been done.