Dark horse Tech Mahindra wins race to acquire Satyam
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.
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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)
Fraud-hit Satyam pins hopes on shaky white knights
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?
Now that Satyam bid is finalized, the attention will switch to satyam’s bankruptcy resulting from a dozen law
suits. On the contrary ,I think, now satyam’s existing customers will start abandoning it; thus its takeover
will not solve any problems.
Whose poor is poor?
“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.
All the new so called progress is just because the CEO wants to have cheap Indian service labor. Slavery is back but it is by the Internet. As the backlash against outsourcing and CEOs increases in the West in the global crisis, India will be the main looser. Nehru and its founder wants socialist India for the poors but the Brahman caste want the capitalism so only few gets the benefits while rest loose. With this much population and caste system and a downturn economy based on service sectors. It is a real challenge to the shining India.
It’s “all in the family” for Indian tech firm
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.
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.
MR.RAJU IS A SIMPLE AND HUMBLE MAN WHO HAD TO THE GUTS TO ADMIT HIS GUILT. SHOW ME ANY MAN IN ASIA WHO HAS RISEN TO SUCH HEIGHTS AND HAD THE GUTS TO ADMIT HIS MISTAKES AND ALLOW THE LAW TO TAKE ITS COURSE. THIS IS THE PRODUCT OF INDIA. HONESTY, AND ADMISSIONS OF GUILT. THERE ARE SO MANY INDIAN POLITICIANS WHO FAIL THIS TEST, WHO HAVE ROBBED THE COMMON MAN OF THEIR LIVELIHOOD OVER A DOZEN SCORES MORE THAN THE RS7000 CRORE SCAM WHICH MR.RAJU PAID IN TERMS OF INCOME TAX.ASK THE GOVERMENT TO REFUND THE EXTRA TAXES HE PAID AND IT WILL TAKE YEARS FOR THEM TO CALCULATE WITH A SIMPLE CALCULATOR AND SLEEP AND WINE AND DINE.
MR RAJU IS MADE IN INDIA- A MAN WHO HAD THE GUTS TO OWN HIS MISTAKES .
DO YOU HAVE THE GUTS AND WILL TO ADMIT YOUR MISTAKES WITHOUT TAKING ANY NAMES.
GOD BLESS YOU.
Even it is the good News for Tch Mahindra