April 13, 2009

Mahindra Tech to purchase Satyam

A joint British and Indian venture put in the winning bid for Satyam Computer Services, the outsourcing giant besieged by a massive fraud controversy.

Tech Mahindra, a combined effort between British communications company BT Group and Mahindra & Mahindra, bid $1.2 billion for the company or $1.16 a share, Satyam's board said Monday, The New York Times reported.

Tech Mahindra topped bids submitted by Indian engineering company Larsen & Toubro and U.S. investor Wilbur Ross, the newspaper said.

The selection of the highest bidder, in a fair, open and transparent process, signals a new stage for the company in its progress towards stabilization and growth, said Kiran Karnik, Satyam's chairman of the board.

We hope this will infuse greater confidence and comfort amongst customers, Karnik said.

In January, the Satyam's former chairman Ramalinga Raju said he fraudulently added $1 billion to the company's value in its accounting sheets. Prosecutors have since said more than a dozen employees were involved in the fraud, which included fake invoices and bank statements.

The Indian government, subsequently, took control of the outsourcing company, which does information technology work for corporations such as General Electric and Nestle, the newspaper said.