Comments
The stock of Mahindra Satyam (the erstwhile Satyam Computer Services) gained 6 per cent on Wednesday following news that Satyam Computer Services has settled its case with the US capital market regulator.
Shares of Mahindra Satyam, which still trades as Satyam Computer on the bourses, went up by Rs 4.30 a piece on the BSE to close at Rs 74.90. On the NSE, the scrip closed up by Rs 4.70 at Rs 75.30 a piece.
“This is just a reaction to the settling of the SEC case by Satyam and PW India. Also, considering the nature of the scam, the amounts that the companies have to pay in settlement do not seem to be very high,” said an IT analyst with Angel Broking.
In the last few months the stock has been moving in the Rs 60-70 band.
The Mahindra Satyam results — announced twice last quarter — also did not do much good for the stock.
Satyam had reported a net profit of Rs 59.60 crore for the third quarter ended December 31, 2010, a one-and-half time increase from Rs 23.30 crore reported in the previous quarter. The revenue has risen by 3 per cent to Rs 1,279 crore (Rs 1,242 crore).
Experts say that it might take about two years before the company gets to match the industry growth rate. For now, the uncertainties continue.
The Securities and Exchange Commission, the US capital market regulator, had booked Satyam Computer Services and Price Waterhouse India for their involvement in the infamous accounting fraud of 2009. According to the settlement, Satyam and PW India will pay $17.5 million (Rs 77.42 crore) to end the probe by SEC. Out of this $10 million (Rs 44.24 crore) will be paid by Mahindra Satyam alone.
Mr Vineet Nayyar, Chairman, Mahindra Satyam, said: “We concluded that it is in the best interests of Mahindra Satyam and its shareholders to resolve this matter and put it behind us on the basis announced today. The new management of the company are committed to the highest standards and we will never betray the trust of our investors.”
The SEC settlement could also might mean good news for Price Waterhouse India which will pay $7.5 million (Rs 33.18 crore) as part of its out-of-court settlement.
The ADR jumped 4.72 per cent to $3.33 against the previous days close of $3.18 at 9 PM IST on the NYSE OTC market.
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.