Feb. 14: The proposed merger of Mahindra Satyam with parent company Tech Mahindra has hit a road block as the investigating agencies have not given even a tacit approval.
The agencies are currently investigating the Rs 12,000 crore accounting fraud. “For any merger process to be initiated, when there has been a history like this, you need to get tacit approval or at least a symbolic go-ahead from some of the agencies currently investigating it. (However), they put us on a hold pattern,” said Mahindra Satyam’s chief executive officer, Mr C.P. Gurnani.
The top Mahindra Satyam official was talking to the media on Monday in Hyderabad after announcing the company’s financial results for the third quarter of financial year 2011.
In September, the Hyderabad-based IT firm had announced that it would begin the process of its merger with sister firm Tech Mahindra in November 2010. The merger process would take nine to 12 months to complete.
The company was bought by Tech Mahindra in 2009 after former chairman Ramalinga Raju admitted to fudging the profits. The CBI, enforcement directorate, Sebi and SFIO are currently investigating the different aspects of the scam.
For the September-December quarter, the company has reported a three per cent growth in revenue over the year ago period, while profit after tax (after exceptional items) stood at Rs 59 crore, a jump of 153 per cent.
Though the growth figures have not yet reached the industry average, the company’s stock went up by 11.7 per cent on the BSE to close at Rs 64.65.
Mr Gurnani however, is hopeful of matching its peers in terms of operational matrix by June 19, 2012. He said the company is now contesting for large projects, which was embargoed earlier due to uncertain financial numbers, and is already working to win back its old clients. The company also plans to hire 6,000 to 7,000 people in the next 12 months.