The board of Mahindra Satyam which met on Friday allotted 19.86 crore shares to Venturebay Consultants – a subsidiary controlled by Tech Mahindra, taking the stake of the new owner to nearly 43 per cent.
Mahindra Satyam, Executive Vice-Chairman, Mr Vineet Nayyar, said that Tech Mahindra would maintain its holding at that level, for the time being. “The main agenda today was allocation of shares and that has been completed,” its Chairman, Mr Kiran Karnik, told reporters after the board meeting.
Tech Mahindra was required to raise its holding in Mahindra Satyam to 51 per cent, based on an open offer for 20 per cent on the existing capital base of the company. However, the open offer turned out to be a damp squib, with only 4.20 lakh shares or 0.1 per cent subscribing to the offer. The new promoters had to resort to preferential allotment to raise their stake.
Mr Nayyar said that Tech Mahindra would be “comfortable” controlling Mahindra Satyam with 42.6 per cent stake. Legal experts say that even with 42.6 per cent holding, Tech Mahindra would be the largest individual investor in the Hyderabad-based IT company .
Meeting with Minister
The board members also met Corporate Affairs Minister, Mr Salman Khurshid to apprise him about the latest developments.
They also discussed impending class action lawsuits that the company is facing in the US. When asked whether the Government would support an out-of-court settlement for such cases, the Minister said, “We discussed it. Information was elicited on other similar class action suits. I agree there is a precedent of out-of-court settlement and it is for the board to work it out. We will extend whatever help we can.”
Source: The Hindu Businessline