The proposed merger of Satyam Computer Services with Tech Mahindra is unlikely anytime soon.
The official liquidator in Hyderabad on Friday refused to approve the proposed scheme of amalgamation on the ground that investigation into the accounting scam in the company is still pending.
The Andhra Pradesh High Court has been hearing the Satyam case for sometime now, with shareholders and unsecured lenders seeking to block the amalgamation in order to secure their respective interests.
The official liquidator, whose approval is necessary for the scheme of amalgamation, has informed the court that the investigation into the accounting scam is still being carried out by various agencies, including the Serious Frauds Investigation Office. The counsel representing the liquidator brought to the notice of the court the provisions of the law that do not allow any approval when an investigation is pending.
Unsecured lenders led by IL&FS, too, have put forth their arguments opposing the merger. Venkatesh Dhond, the IL&FS counsel, argued that Satyam had not complied with the statutory provisions and had not convened the meeting of the unsecured lenders.
According to him, there was an unsecured loan of about Rs46 crore, but the company has not taken those claims on record. The counsel informed the court that the company has been misstating the facts about the subsistence of unsecured loans. He also pointed out that the scheme of amalgamation cannot go through even if the courts want since there is significant non-compliance and procedural issues.
A group of shareholders has also been opposing the merger scheme on the ground that the swap ratio was not based on fair valuations. According to the group, the valuations did not take into consideration the reserves available with Satyam and Tech Mahindra and that the latter’s decision to issue a dividend to its shareholders after the merger proposal was approved was in fact a raw deal handed out to shareholders of Satyam.
@ramanakv
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