Mahindra Satyam-Tech Mahindra merger hit by procedural delays

Our Bureau Hyderabad | Updated on November 20, 2017

Mr Vineet Nayyar (left), Chairman of Mahindra Satyam, with Mr C.P. Gurnani, CEO, announcing the company’s financial results in Hyderabad on Monday. — P.V. Sivakumar   -  Business Line

mahindra   -  Business Line

Mahindra's plan to merge Mahindra Satyam with Tech Mahindra seems to have hit a road block in the form of ‘procedures'.

The group, which had announced its intention for the merger, had to defer it, keeping in view the legal issues and ‘put-on-hold' advice from the agencies that are probing the financial scam.

“We still have the intention (to merge the two firms). But when to trigger it is not yet decided,” Mr Vineet Nayyar, Chairman of Mahindra Satyam, said.

“For any merger, you need to get a tacit approval, at least from some investigating agencies probing the scam. They put it (approval) on hold,” Mr Nayyar said.

Hiring plan

Mr Gurnani said “the company would have net additions of 7,000 people, including laterals, in the next 12 months.

Last year, we have given an average hike of 12.5 per cent as part of the retention plan.”

“Attrition continues to be a worry. We are having an attrition rate of 25 per cent. Industry norm too hovers around that rate,” Mr Nayyar said. The company has 28,832 employees as on December 31, 2010, up by 764 from the previous quarter.

Replying to a query, Mr Nayyar reiterated that the company had no relationship with Maytas that claimed to have lent money to Satyam Computer Services.

“The earlier promoters might have relationship with that company. But as a company, Mahindra Satyam has no relationship,” he said.

On legal issues, Mr Nayyar said the company witnessed progress in most cases, while the class action suits in the US had not yet been resolved.

He denied reports that it was going for out-of-court settlement.

M Cube initiative

In order to tap the potential within the group, Mahindras have chalked out the M Cube initiative.

“The group is very strong in manufacturing and distribution. We would like to leverage that with Tech Mahindra advantage. We have done a synergy meet in this regard. Pilots in opportunities in enterprise mobility have begun,” he said.

Published on February 14, 2011

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