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Investors urge caution on Satyam merger

John Ribeiro | Dec. 23, 2010
The company is likely to be merged with parent company Tech Mahindra

Satyam will also use Tech Mahindra's expertise in telecommunications to offer mobility technology to its enterprise customers, Kalra said.

A merger will not bring significant benefits to customers as Satyam's strengths are mainly in ERP implementations, Apte said recently. Customers will look for application development and maintenance services and business process outsourcing (BPO), which are small businesses currently for both Satyam and Tech Mahindra, he added.

Tech Mahindra has not indicated a final date for the merger of the two companies. A company official said on condition of anonymity that it would take some time, as the company has to still settle some outstanding issues including finalizing its results according to U.S. accounting practices, and continuing investigations into the alleged misdeeds of the former management of company, including Ramalinga Raju.

The company, after restating accounts, has so far announced its results only according to Indian GAAP (generally accepted accounting principles).

The company official said that a merger was inevitable, and even the small investors had not objected to the merger, but only asked that it should not happen too soon.

 

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