Mahindra Satyam (formerly Satyam Computer Services Limited) was an Indian IT services company based in Hyderabad, India. The company was listed on the Pink Sheets, the National Stock Exchange and Bombay Stock Exchange. It offered a range of services, including software development, system maintenance, packaged software integration and engineering design services. In June 2009, the company unveiled its new brand identity Mahindra Satyam subsequent to its takeover by the $14 billion Mahindra Group's IT arm on 13 April 2009. It subsequently merged within Tech Mahindra on 24 June 2013.
Milestone affiliates, State Farm Mutual Automotive Insurance Company, Megasoft Inc., Caterpillar Inc. and NCR Corporation. They together accounted for 42.4% of its IT services revenues. About 26.1% of its total IT services revenues were generated from fixed-price contracts. Satyam also claimed topline growth of 68% to $164 million at 45% gross profit margin. All of its personnel in the USA were working pursuant to extended H-1B visas (570 persons) or temporary L-1 visas (574 persons).
In a 2005 SEC filing, Satyam claimed topline growth of 40% to $794 million at 36% gross profit margin. There were 20,690 technical associates. The five largest customers accounted for 29.5% of IT services revenues. About 34.2% of its total IT services revenues were generated from fixed-price contracts.
Video Mahindra Satyam
Merger with Tech Mahindra
Mahindra Satyam's proposed merger with Tech Mahindra may be delayed all because of legal issues, and ambiguity over jurisdiction between investigating agencies and the government. The merger has been delayed due to two tax cases pending with the Income Tax claiming over INR27 billion for both. Tech Mahindra announced its merger with Mahindra Satyam on 21 March 2012, after the board of two companies gave the approval. The two firms have received the go-ahead for merger from the Bombay Stock Exchange and the National Stock Exchange. Competition Commission of India(CCI)approved the proposed merger of Mahindra Satyam and other companies with Tech Mahindra. Mahindra Satyam will hold its annual general meeting (AGM) on 8 June 2012 to consider the proposal to merge the company with Tech Mahindra. It is mandatory for the firm to get the AGM nod to go ahead with the merger. The shareholders of both Tech Mahindra and Mahindra Satyam have unanimously approved the scheme of amalgamation and merger of Satyam Computer Services Ltd, Venturbay Consultants, C&S System Technologies, CanvasM Technologies and Mahindra Logisoft Business Solutions with Tech Mahindra. Mahindra Satyam chairman, Vineet Nayyar said on 2 August 2012, that the merger with Tech Mahindra was at the final stage of getting approval from the Andhra Pradesh and Maharashtra High Courts. The two firms had received the go-ahead for merger from the Bombay Stock Exchange and the National Stock Exchange. On 11 June 2013, Andhra Pradesh High Court gave its approval for the merger of Mahindra Satyam with Tech Mahindra, after Bombay high court already gave its approval. Vineet Nayyar said that technical approvals from the Registrar of Companies(RoC) in Andhra Pradesh and Maharashtra are required which will be done in two to four weeks, and within 8 weeks, a newly merged entity will be in place. A new organisation chart would also come into force led by Anand Mahindra as Chairman, Vineet Nayyar as Vice Chairman and C. P. Gurnani as the CEO and Managing Director. Tech Mahindra on 25 June 2013 announced completion of Mahindra Satyam's merger with itself to create nation's fifth largest software services company with a turnover of USD 2.7 billion. Tech Mahindra got the approval from the registrar of companies for the merger late in the night at 11:45 (pm) on 24 June 2013. 5 July 2013 has been determined date on which the Satyam shares will be swapped for Tech Mahindra shares which was approved by both the boards. Mahindra Satyam (Satyam Computer Services), was suspended from trading with effect from 4 July 2013, following its merger with Tech Mahindra . Tech Mahindra completed share swap and allocated its shares to the shareholders of Satyam Computer Services on 12 July 2013. The stock exchanges have accorded their approval for trading the new shares effective 12 July 2013. On 24 July 2013, a division bench of Andhra Pradesh High Court admitted a petition filed by Ekadanta Greenfields and Saptaswara Agro Farms private limited challenging the Mahindra Satyam-Tech Mahindra merger order.The order was given by a single judge of the court in June, allowing the merger and dismissing the objections raised by a few parties.After admitting the petition, the bench comprising N.V. Ramana and Vilas V. Afzulpurkar posted the matter to 26 August 2013.
Maps Mahindra Satyam
Row with Income Tax Department
The Income Tax Department had issued notices to the company seeking INR6.17 billion tax for the assessment years from 2003-04 to 2008-09, when the company was run by B Ramalinga Raju and his team. The Central Board of Direct Taxes has attached the properties of Mahindra Satyam on 3 February 2012, stating the attachment of properties was according to Section 281 B of the Income Tax Act. Section 281 B refers to recovery of tax and allows the tax department to issue provisional orders to the assessee to safeguard revenues accrued to it.The Income Tax department had slapped notice on the company after disallowing exemptions claimed by the software firm. The company has received notices of demand for INR1,037 crore and INR10.75 billion for assessment years 2002-03 and 2007-08, respectively. However, the Andhra Pradesh High Court granted a breather to Mahindra Satyam, by staying the Income Tax Department's provisional order to attach properties of the IT firm.
Turnaround
The company had reported a consolidated net loss of INR2.33 billion for the July-September quarter of 2010. Speaking at a press conference, Vineet Nayyar, chairman of the company said the consolidate cash and cash equivalents at INR300 million compared to INR260 million. "We will take three years for a turnaround," he informed. Even though the company got INR2.45 billion profit in Q4 for 2010-2011, but due to outside payments nearly INR5.70 billion for SEK, UPAID and Class Action Suit in Q4 (Total 6.41 billion for the year 2010-2011 ), the company had reported a consolidated net loss of INR3.27 billion for the January-March quarter of 2010-2011.IT firm Mahindra Satyam posted a consolidated net profit of INR2252 million for the quarter ended 30 June 2011. During the quarter, the company added 2,172 people (net), taking total headcount to 31,438 as of 30 June 2011. The company added 36 new customers during the quarter. The total headcount of the company stood at 32,092 as of the quarter ended 30 September 2011 during which net addition of 654 personnel took place. The company added 188 employees in quarter three ending 31 December 2011 and recorded 29.4% quarter-on-quarter in its consolidated net profit of INR3.08 billion . Mahindra Satyam reported a net profit of INR5.34 billion for the fourth quarter ended 31 March 2012. Mahindra Satyam declared 30 per cent dividend, signalling a complete turnaround, after declaring Q4 results of 2012-2013 in May 2013.
Controversies
Maytas acquisition
in 2008, Satyam attempted to acquire Maytas Infrastructure and Maytas Properties, founded by family members of Ramalinga Raju (Maytas is "Satyam" reversed) for $1.6 billion, despite concerns raised by independent board directors. Both companies are owned by Raju's sons. This eventually led to a review of the deal by the government, a veiled criticism by the Vice President of India Hamid Ansari, and Satyam's clients re-evaluating their relationship with the company. Satyam's investors lost about INR3,300 crore (equivalent to INR64 billion or US$1.0 billion in 2016) in the related panic selling. The US$1.6 billion (INR80 billion) acquisition was met with scepticism as Satyam's shares fell 55% on the New York Stock Exchange. Three members of the board of directors resigned on 29 December 2008.
Accounting scandal of 2009
In addition to other controversies involving Satyam, on 7 January 2009, Chairman Raju resigned after publicly announcing his involvement in a massive accounting fraud.
See also
- List of IT consulting firms
- Fortune India 500
References
External links
- Official website
- The Official Corporate Website for Satyam Computer Services
- Mahindra Satyam repositioned as an ICT firm
- Are there more Satyam's in making?
- BusinessWeek profile
- The rise and fall of Satyam
- Raju's Statement - Scanned Copy - "Satyam CEO's Letter to its board of directors" - Hyderabad, India, 7 January 2009
- Merger of MSAT and TechM (2011). Merger of IT Companies (Documentary). India: Moneycontrol.com.
Source of the article : Wikipedia
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