Mahindra Satyam's NYSE relisting may be delayed

K. V. Kurmanath Hyderabad | Updated on November 14, 2017

Mahindra Satyam, which settled Securities Exchange Commission (SEC) of the US charges on Wednesday, might take some more time to begin the process to get relisted on New York Stock Exchange (NYSE).

“We are yet to begin the process,” a top executive of the company told Business Line, when contacted to know whether the company would approach the US regulator, seeking permission to relist.

Analysts felt that the company, as it tackled multiple problems, was not in a position to take the burden of stringent compliance norms of SEC at this juncture. The settlement with SEC had removed one of the several roadblocks the company faced as it went for relisting. On Wednesday, it agreed to pay $10 million to clear the SEC charges without admitting to or denying them.

The company still had to address another class-action suit involving Aberdeen group before it could attempt to go for relisting.

Mr P.K. Agarwal, Director of Purpleline Investment Advisors, felt that it served no purpose for the company to go for relisting on the US stock exchange at this stage. “Even if they want to (go for relisting), it doesn't deserve any purpose now. Perhaps, it could help after 3-4 years,” he observed.

The company had delisted company's ADRs (American Depository Receipts) in October 2010 as it failed to comply with accounting standards required by the US market regulator. While announcing the decision to delist the ADRs, it announced that it would go for relisting after making its accounts ‘current' as per the US standards. The company, which completed cleansed the financial accounts for the controversial period when its founder Mr B Ramalinga Raju, fudged accounts, had become “current” as per the Indian accounting standards last year.

Class-action suits

Earlier this year, Mahindra Satyam settled a batch of 12 class-action suits in the US by agreeing to pay $125 million. Even as it await statutory permissions, including from the Reserve Bank of India, to facilitate completion of payments in this regard.

On Thursday, the company's shares moved up marginally to end at Rs 75.90 from the previous close of Rs 74.90 on the BSE.

Published on April 07, 2011

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