Wednesday, September 29, 2010

Mah Satyam - Big story of the Month

Mahindra Satyam, earlier known as Satyam Computer, on Wednesday announced its financial results for the first time the Satyam fraud came to light.

The the year ended March 31, 2010, it reported a net sales of Rs. 124.60 crore on net sales of Rs. 5481 crore. For year ended March 2009, the restated earnings show a net loss at Rs. 8,176.8 crore on net sales of Rs. 8,812.6 crore.

Its cash balance as on March 31, 2010, remained at Rs. 2178.6 crore.

Mahindra Satyam's board met today to consider the results. Satyam Computer had earlier announced its numbers for the July-September 2008 quarter.

The company is expected to declare the financials of the first two quarters of this fiscal (April-June and July-September 2010) on November 15, 2010.

Satyam's founder and former chairman B Ramalinga Raju in January 2009 had admitted to a multi-crore accounting fraud, so far the biggest corporate scam in India, plunging the company in to a crisis. 

Following Raju's revelation, the company's administration was taken over by a government-nominated board, which subsequently cleared sale of the company to Mahindra Group.

Tech Mahindra took over reins of the company in April 2009 and rebranded it as Mahindra Satyam. The Company Law Board had given exemption to Mahindra Satyam from publishing results for two financial years. The audited numbers is likely to give a clear picture about the financial health of the company.

Earlier, Mahindra Satyam (formerly Satyam Computer) said it will delist from the New York Stock Exchange as it is unable to comply with US market guidelines.

The company would delist its American Depositary Receipts (ADRs) from the NYSE on October 14. ADRs are shares issued by non-American companies to raise money in the US.

Mahindra Satyam Chairman Vineet Nayyar said in a filing to the BSE the company would not be able to file restated US-GAAP financial statements for the period ended March 31, 2009 on or prior to October 15, the deadline given the US regulator SEC.

In anticipation of better-than-expected numbers from the company, the stock ended flat, outperforming the benchmark Sensex which ended 148 points lower today.

Separately, the Supreme Court on Tuesday adjourned the hearing on a plea by CBI to cancel the bail granted to B Rama Raju, brother of B Ramalinga Raju, and four others accused in the Rs. 14,000-crore Satyam accounting fraud.

A bench comprising Justices Dalveer Bhandari and Deepak Verma adjourned the matter to October 19. Earlier, the apex court had issued notices to Rama Raju, brother of Satyam founder B Ramalinga Raju, former Satyam CFO V Srinivas and three other employees G Ramakrishna, Venkatapathi Raju and Ch Srisailam asking them why their bail should not be cancelled.

The apex court was hearing the petition filed by CBI against the Andhra Pradesh high court order, which in July, 2010, granted bails to the accused--Rama Raju, V Srinivas, G Ramakrishna, Venkatapathi Raju and Ch Srisailam--in the country's largest corporate fraud.

CBI has also challenged the bail granted by the High Court to Satyam founder Ramalinga Raju last week. Ramalinga Raju, his brother Rama Raju and eight others were arrested last year after the Satyam founder admitted to fudging the accounts of the IT company.


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