The merger of Mahindra Satyam with Tech Mahindra has received yet another setback on Tuesday, with a few investors of the scam-hit company moving the Andhra Pradesh High Court, opposing the swap ratio for the merger.

The court has posted the matter to December 3. The minority shareholders have contended that the swap ratio was unduly favourable to Tech Mahindra (which bought the trouble-hit Satyam Computer Services in 2009). The swap ratio was put at 2:17 (two Tech Mahindra shares of Rs 10 each for every 8.5 Satyam shares of Rs 2 each).

Mahindra Satyam has received all the statutory and legal permissions, barring the one from Andhra Pradesh High Court, for the merger. The petition has come at a time when the company is expecting the last permission to go ahead with the merger.

A section of investors have been consistently opposing the swap ratio, alleging that it would go against their interests. The protests had become more vociferous in the recently held Annual General Meeting, wondering how the management had arrived at the ratio.

Vineet Nayyar, Chairman of Mahindra Satyam, had argued that the swap ratio was decided by a consultant after assessing strengths and weaknesses of the two firms. “We had got nothing to with the assessment,” he said, while answering to the queries at the AGM.

(This article was published on November 27, 2012)
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