Davos: Mahindras today said Satyam Computers (now Mahindra Satyam) will be merged with its flagship IT firm Tech Mahindra after settlement of accounts of the new entity, expected to be completed by June this year.
"(Why) we cannot merge them (Mahindra Satyam and Tech Mahindra) now is because we do not have accounts settled. The moment we get the accounts settled, we can set the time frame," Mahindra & Mahindra Vice-Chairman Anand Mahindra told here on the sidelines of the World Economic Forum here.
He said at present a 'forensic auditing' of Mahindra Satyam is being conducted by KPMG and the accounts are likely to be finalised by June.
Forensic auditing is an accounting exercise for gathering proof for probing a fraud. Satyam founder B Ramalinga Raju early last year had admitted to committing a multi-crore accounting fraud in the company.
Explaining the reasons for the forensic auditing, he said: "Because they have to go back and go on a trail."
Tech Mahindra had acquired Hyderabad-based Satyam in June last year for about Rs 2,890 crore after its founder Ramalinga Raju admitted to committing a multi-crore accounting fraud.
Subsequently, the company was renamed Mahindra Satyam. Asked if the Satyam brand would be retained after the proposed merger, Mahindra said: "There is no decision right now. However, we are very happy with the choice we had made to keep the Satyam name and marry with the Mahindra name."
On turning around Mahindra Satyam, he said: "As far as we are concerned the definition of turnaround will come when accounts are finalised (by June)." Mahindra said after his group's takeover of Satyam, it has been able to steer the troubled firm to stability.
"Ever since we took over, there is no haemorrhage. A number of new logos (customers) have been added. Whatever we had envisioned, there has been no unexpected or unpleasant surprises in terms of clients (loss)," he said.
He said settling the lawsuit with UK-based UPAID was a huge relief for the firm.
"One big law suit of $1 billion by UPAID has been settled for USD 70 million only. This was a very big sword hanging over the company," Mahindra added.
On the class action suits faced by Satyam in the US, he said: "Any large company (would face)... They will be settled."
Asked if Mahindra Satyam would move ahead with SEZ plans, he said: "Though we have rationalised a lot of the facilities, SEZs, we are unlikely to give (them) up because of the tax (benefits) for the IT companies."
PTI
First Published: Sunday, January 31, 2010, 19:54