Mahindra Satyam to delist shares from NYSE on Oct 14

Days ahead of announcing its reinstated financial results, Mahindra Satyam (formerly Satyam Computer) today said it will delist from the New York Stock Exchange as it is unable to comply with US market guidelines.

The company would delist its American Depositary Receipts (ADRs) from the NYSE on October 14. ADRs are shares issued by non-American companies to raise money in the US.

Mahindra Satyam chairman Vineet Nayyar said in a filing to the BSE the company would not be able to file restated US-GAAP financial statements for the period ended March 31, 2009 on or prior to October 15, the deadline given the US regulator SEC.

Erstwhile Satyam Computer did not file its financial results for 2008-09 and 2009-10 its former its founder B Ramalinga Raju admitted to an an accounting scam running into several crore of rupees.

The company is slated to come out with its financials for the first time since the scam on September 29.

Raju in January 2009 admitted to fudging the company's accounts for years. Following the revelation, the company's administration was taken over by a government-nominated board, which subsequently cleared sale of the company to Mahindra Group.

ADRs of Mahindra Satyam were trading at $4.95, down 19.12% on the NYSE.

Besides, the company anticipates that after delisting, the ADRs will continue to trade in the over-the-counter (OTC) market.

In addition, throughout this period and in the future the equity shares underlying the ADRs will continue to be listed on the Indian stock exchanges.

"Keeping in view the paramount interest of the investors, our objective is to enable the ADRs to be quoted without interruption in the US domestic over-the counter market so that the investors can continue to trade the ADRs throughout the transactions period and beyond," Nayyar added.

Over-the-counter (OTC) trading is to trade financial instruments such as stocks, bonds, commodities or derivatives directly between two parties.

The company was notified by the NYSE of its non-compliance. Pursuant to the NYSE's rule, the company was given until October 15, to make this filing, which represents the maximum time period available.

The board of Satyam, now acquired by Mahindra Group and since renamed Mahindra Satyam, will review the audited accounts of the company and the same would be submitted to the Company Law Board.

The CLB on a request from Mahindras had allowed the company to submit the audited results for 2008-9 and 2009-10 by September 30. It had earlier set June 30, as the deadline for Mahindra Satyam to file its re-stated accounts.