Mahindra Satyam (formerly known as Satyam Computer Services Ltd) was founded in 1987 by B Ramalinga Raju. The company offers consulting and information technology (IT) services spanning various sectors, and is listed on the New York Stock Exchange, the National Stock Exchange (India) and Bombay Stock Exchange (India). In June 2009, the company unveiled its new brand identity Mahindra Satyam subsequent to its takeover by the Mahindra Group s IT arm, Tech Mahindra.

On 7 January 2009, company Chairman Ramalinga Raju resigned after notifying board members and the Securities and Exchange Board of India (SEBI) that Satyam's accounts had been falsified. Raju confessed that Satyam's balance sheet of 30 September 2008 contained: inflated figures for cash and bank balances of Rs 5,040 crore (US$ 1.08 billion) (as against Rs 5,361 crore (US$ 1.15 billion) crore reflected in the books) . an accrued interest of Rs. 376 crore (US$ 80.84 million) which was non-existent. an understated liability of Rs. 1,230 crore (US$ 264.45 million) on account of funds was arranged by himself. an overstated debtors' position of Rs. 490 crore (US$ 105.35 million) (as against Rs. 2,651 crore (US$ 569.96 million) in the books). Raju claimed in the same letter that neither he nor the managing director had benefited financially from the inflated revenues. He claimed that none of the board members had any knowledge of the situation in which the company was placed 


5 February 2009, the six-member board appointed by the Government of India named A. S. Murthy as the new CEO of the firm with immediate effect. Murthy, an electrical engineer, has been with Satyam since January 1994 and was heading the Global Delivery Section before being appointed as CEO of the company. The two-day-long board meeting also appointed Homi Khusrokhan (formerly with Tata Chemicals) and Partho Datta, a Chartered Accountant as special advisor 

Satyam Computer Services on March10, 2009, commenced the competitive bidding process which would be overseen by a former Chief Justice of India or a retired Supreme Court Judge. The bidders will have to register their interest by Thursday (March 12) and submit a detailed expression of interest (EoI) together with the proof of availability of at least Rs. 1,500 crore ($290 million) by March 20. The three Indian bidders who will compete with one another for a controlling stake of 51 per cent in the IT company are: L&T, B. K. Modi¶s Spice Group and Tech Mahindra.   

Upon being declared the highest bidder, Tech Mahindra and Satyam executed an agreement whereby Tech Mahindra agreed to subscribe to and acquire 30.28 crore shares of Satyam, representing 31 per cent of its share capital, at Rs. 58 a share. This will infuse Satyam with Rs. 1,756 crore. The subsequent open offer for 20 per cent, amounting to Rs. 1,132 crore, will result in a total of Rs. 2,889 crore coming into the company for the 51 per cent stake.  

The beleaguered Satyam Computer Services has finally found a new owner, after its founder chairman, B. Ramalinga Raju left it in the lurch with his confession of corporate fraud in January this year. 

Tech Mahindra pipped Larsen & Toubro and Wilbur Ross to the post and is set to initiate the takeover process pending the approval of the Company Law Board which should happen in a week. 

The final act of the Satyam saga played out on Monday with the government-appointed board of directors selecting Venturbay Consultants Private Ltd., a subsidiary controlled by Tech Mahindra, as the highest bidder to acquire a controlling stake in the IT services company.

Company will have to shell out Rs. 2,889 crore for 51% stake

Industry Presence
Mahindra Satyam provides services in the following areas: 

Aerospace and Defense Banking, Financial Services & Insurance Energy and Utilities Life Sciences & Healthcare Manufacturing, Chemicals & Automotive Public Services & Education Retail and Consumer Packaged

Mahindra Satyam offers the following horizontal services. 

Extended Enterprise Solutions Web Commerce Solutions Business Intelligence Services Quality Consulting Strategic Outsourcing Services Industry Native Solutions BPO Engineering Services


Maytas acquisition

In 2008, Satyam attempted to acquire (Maytas Infrastructure and Maytas Properties) founded by family relations of company founder Ramalinga Raju 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 and Satyam's clients re-evaluating their relationship with the company. Satyam's investors lost about INR 3,400 crore in the related panic selling. The USD $1.6 billion (INR 8,000 crore) acquisition was met with skepticism as Satyam's shares fell 55% on the New York Stock Exchange.Three members of the board of directors resigned on 29 December 2008.

World Bank
The World Bank had banned Satyam from doing business with it for 8 years due to inappropriate payments to the World Bank's staff. The World Bank accused Satyam of giving improper benefits to its (the Bank's) staff and of failing to maintain documentation to support fees charged for its subcontractors. However, it clarified that Satyam was not involved in incidences of data theft or malicious attacks that had been made on the Bank's information systems.

Sign up to vote on this title
UsefulNot useful