The Central Board of Direct Taxes' notice on Mahindra Satyam to pay Rs 616 crore in tax arrears for the scam period of 2002-2008, and the Andhra Pradesh High Court ruling to freeze the company's accounts have come as a rude shock to the employees of the crisis-hit company.

“The amount in question is not small. It might impact the bottomline if we are to pay the amount,” Mr Srinivas Reddy (name changed), an employee, told Business Line .

The employees are also worried because the pay day is fast approaching.

On Friday, the High Court refrained Mahindra Satyam and the Income Tax Department from accessing the former's bank accounts. The company was asked to give an undertaking stating that it would not touch the accounts till March 31.

Meanwhile, the management wrote a letter to all its employees across the globe that they were on the right side of the case and there was nothing to worry. “You will read further media articles on this issue tomorrow, elaborating on the matter of frozen bank accounts. While the amount sought to be recovered is about Rs 616 crore, the balances in our bank accounts are far in excess of the tax demands,” said Mr Hari T, Chief People's Officer of Mahindra Satyam.

The letter was written a day before the court took the decision to freeze the bank accounts.

“Our decision to contest the CBDT order is based on our conviction on this issue. All these will not impair our ability to run the day-to-day operations in any way,” he said.

“This issue (tax demand from IT Department) is true and we are dealing with the same at the highest level. In principle, MSat has taken a position that the recovery order is unfair. We have decided to seek judicial remedy,” he said.

Mr Hari said the staff need not worry about their salaries. “We have funds to meet the pay day requirements,” he said.

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