Small shareholders oppose Satyam’s merger with Tech Mahindra

Shareholder activism against the merger of fraud-hit Satyam Computer Services with Tech Mahindra was on full display at the former’s annual general meeting for 2008-09 and 2009-10 here on Tuesday.

Minority shareholders of Satyam cried foul at the way the merger plans are being pursued.

“If the merger is considered at this point, it would be premature. Satyam’s shareholders, and more particularly the minority shareholders, have been suffering due to poor valuations,” said GN Ravi, a retired marine engineer and a shareholder of Satyam.

“We know that the large investors particularly foreign institutions, would not invest unless there are some positive vibes from the company. We also know that the share price would not improve unless these big FIIs invest. If not the jacked up price, the management should at least allow the company to discover its true value. The merger should not be taken forward at this point,” Ravi said.

Of the over 50 shareholders present at the AGM, at least 20 opposed the merger plans. However, the opposition was not recorded since the merger was not on the agenda of the meeting.

“We have all lost heavily in Satyam since the scam came to light. Now, a merger with Tech Mahindra will only benefit Tech Mahindra but not Satyam. There is no need for a merger from the Satyam shareholders’ perspective,” said Shantilal Shah, another shareholder.

With many others also opposing the plan, Satyam’s chairman Vineet Nayyar tried to pacify the aggrieved shareholders by saying “the merger, whenever it happens, will happen only after a formal AGM approval.”

However, the uproar continued.

“We know what happens in an AGM. The majority shareholders including the management will get the merger approved even if the minority opposes it,” said Ravi.    Turn to Page 10

“There was a strategy earlier that the Tech Mahindra-Satyam combine would get $5 billion in revenues in three years and Satyam’s contribution to that would be about 60%. We are all for that. Let Satyam come to that level and then think of a merger,” he argued.

With shareholders continuing to pursue the issue even as the Satyam management was keen on moving on to other items on the agenda, the directors gave an assurance.

“The merger is currently not in the pipeline and we will look into the concerns of the minority shareholders whenever we take it up,” C Achuthan, a government-appointed director on the Satyam board, said.

“It’s good that the shareholders have expressed their views and concerns. Now that they are expressed, they will be resolved,” M Damodaran, former Sebi chairman and Satyam’s director, said.

The shareholders were also insisting on finding out the mechanism to either sue the Satyam founder B Ramalinga Raju or make him pay for causing damage to the company. Satyam chairman Nayyar said the company would seek opinion of experts on these issues.