CleanupBot II at 10:32, 14 August 2023

2023-08-14T10:32:10Z

New page

{{Hatnote|This article is about Mahindra Satyam prior to its 2013 merger into Tech Mahindra. For the resulting company, see [[Tech Mahindra]].}}
{{Use British English|date=March 2013}}
{{Use dmy dates|date=October 2020}}
{{Infobox company
| name = Mahindra Satyam
| logo = Mahindra Satyam Logo.svg
| logo_size = 200px
| logo_alt = Mahindra Satyam logo
| image = Satyam Tech Center.JPG
| type = [[Public company]]
| traded_as =
| fate = Merged into [[Tech Mahindra]]
| successor = [[Tech Mahindra]]
| foundation = 1987
| defunct = 2013
| location = [[Hyderabad, India]]
| area_served =
| industry = [[IT service management|IT services]], [[Information technology consulting|IT consulting]]
| services = IT, [[business consulting]] and outsourcing services
| revenue =
| operating_income =
| net_income =
| assets =
| equity =
| owner =
| key_people =
| num_employees =
| homepage =
}}

'''Mahindra Satyam''' (formerly '''Satyam Computer Services Limited''') was an Indian [[information technology]] (IT) services company based in [[Hyderabad]], [[India]], offering [[software development]], [[computer maintenance|system maintenance]], packaged software integration and [[engineering design process|engineering design]] services. Satyam Computer Services was listed on the [[OTC Markets Group|Pink Sheets]], the [[National Stock Exchange of India|National Stock Exchange]] and [[Bombay Stock Exchange]] and provided services to a wide range of customers including 185 [[Fortune 500]] companies.<ref name=":1">{{Cite news|url=https://www.theguardian.com/technology/2009/jan/15/satyam-computer-services|title=Satyam scandal – the fallout|last=Howlett|first=Dennis|date=2009-01-15|work=The Guardian|access-date=2019-09-22|language=en-GB|issn=0261-3077}}</ref>

In January 2009, the company's founder and chairman [[Ramalinga Raju]] admitted of inflating the company's assets by $1 billion, leading to criminal charges and a collapse of the company's stock price.<ref name=":2" /><ref>{{Cite web|url=https://dealbook.nytimes.com/2012/03/21/tech-mahindra-to-merge-with-satyam/|title=Tech Mahindra to Merge With Satyam|last=Scott|first=Mark|date=21 March 2012|website=The New York Times|language=en|access-date=2019-09-22}}</ref> This was known as [[Satyam scandal|Satyam Scandal]]. [[Mahindra Group]]'s IT arm, [[Tech Mahindra]], purchased a major stake in the company and in June 2009 the company renamed itself Mahindra Satyam.<ref name=":0">{{Cite web|url=https://www.hindustantimes.com/business/satyam-computers-is-now-mahindra-satyam/story-8VjZ5ZwFaMuBeS6i2Bo1FJ.html|title=Satyam Computers is now Mahindra Satyam|date=2009-06-21|website=Hindustan Times|language=en|access-date=2019-09-22}}</ref> Mahindra Satyam merged with [[Tech Mahindra]] on 24 June 2013.<ref>{{Cite news|url=https://www.business-standard.com/article/companies/tech-mahindra-goes-for-growth-by-acquisition-113101500020_1.html|title=Tech Mahindra goes for growth by acquisition|last=Alvares|first=Clifford|date=2013-10-15|work=Business Standard|access-date=2019-09-22}}</ref>

==History==
Satyam Computer Services was founded in 1987 and by 2008 earned revenues of over $2 billion, employing 52,000 IT professionals across the world.<ref>{{Cite web|url=https://www.rediff.com/money/2008/dec/19satyam-just-what-went-wrong.htm|title=Satyam: Just what went wrong?|website=Rediff|language=en|access-date=2019-09-22}}</ref> It was one of India's five top IT companies, and focused on the enterprise segment.<ref name=":3">{{Cite news|url=https://economictimes.indiatimes.com/tech/ites/how-tech-mahindra-missed-the-growth-bus-after-satyam-acquisition/articleshow/68733871.cms?from=mdr|title=How the Satyam takeover episode taught Tech Mahindra many valuable business lessons|last=Sangani|first=Priyanka|date=2019-04-05|work=The Economic Times|access-date=2019-09-22}}</ref> It had an extensive client list including 185 [[Fortune 500]] companies.<ref name=":1" /> The company was the subject of what was called India's biggest corporate scandal in January 2009 when then-chairman [[Byrraju Ramalinga Raju]] admitted in a letter to the [[Securities and Exchange Board of India]] that the corporate accounts had been falsified, adding approximately $1 billion to the company's cash and cash-related assets.<ref name=":2">{{Cite web|url=https://qz.com/india/379877/the-satyam-scandal-how-indias-biggest-corporate-fraud-unfolded/|title=The Satyam scandal: How India’s biggest corporate fraud unfolded|last=Balachandran|first=Manu|website=Quartz India|language=en|access-date=2019-09-22}}</ref><ref>{{Cite web|url=https://www.sec.gov/news/press/2011/2011-81.htm|title=SEC Charges Satyam Computer Services With Financial Fraud|website=sec.gov|access-date=2019-09-22}}</ref> The government appointed a board to oversee the sale of the company.<ref name=":3" /> Tech Mahindra offered to purchase a majority stake in April, 2009,<ref>{{Cite news|url=https://www.thehindu.com/todays-paper/Tech-Mahindra-acquires-Satyam-outbidding-LT/article16615716.ece|title=Tech Mahindra acquires Satyam outbidding L&T|date=2009-04-14|work=The Hindu|access-date=2019-09-22|language=en-IN|issn=0971-751X}}</ref> and the company was rebranded as Mahindra Satyam in June 2009.<ref name=":0" />

Tech Mahindra announced its plan to [[Tech Mahindra-Mahindra Satyam merger|merge]] with Mahindra Satyam on 21 March 2012, after the boards of both companies gave their approval.<ref>{{Cite web|url=https://www.livemint.com/Companies/3gvuJGAgAumXazCDQ4otRO/Tech-Mahindra-Satyam-get-nod-to-merge.html|title=Tech Mahindra, Satyam get nod to merge|last=Kumar|first=John Satish|date=2012-03-21|website=LiveMint|language=en|access-date=2019-09-22}}</ref> The Bombay Stock Exchange, the National Stock Exchange,<ref name="thehindubusinessline1">[http://www.thehindubusinessline.com/industry-and-economy/info-tech/article3304195.ece/ Mahindra Satyam-TechM to take 150 top leaders to Bangkok] {{webarchive|url=https://web.archive.org/web/20140315133139/http://www.thehindubusinessline.com/industry-and-economy/info-tech/article3304195.ece/|date=15 March 2014}}</ref> and the [[Competition Commission of India]] (CCI) also approved.<ref>[http://profit.ndtv.com/News/Article/high-court-orders-shareholders-meeting-on-msat-tech-mahindra-merger-304000/ High Court orders shareholders' meeting on MSat-Tech Mahindra merger]</ref> Shareholders unanimously approved the move in January 2013.<ref>[http://business-standard.com/india/news/mahindra-satyam-shareholders-approve-mergertech-mahindra/172660/on/ Mahindra Satyam shareholders approve merger with Tech Mahindra]</ref> The merger ran into delays due to ambiguity over jurisdiction between investigating agencies and the government,<ref>{{Cite web|url=https://www.moneycontrol.com/news/business/companies/-1175767.html|title=Mah Satyam, Tech Mahindra merger may be delayed|date=4 February 2011|website=Moneycontrol|access-date=2019-09-22}}</ref> and two tax cases totaling over {{INR}} 27 billion.<ref>[http://www.moneycontrol.com/news/business/mah-satyam-tech-mah-to-appoint-bankers-to-fasten-merger_581330.html Mah Satyam-Tech Mah to appoint bankers to fasten merger]. Moneycontrol.com (30 August 2011). Retrieved 2013-09-23.</ref> On 11 June 2013 Andhra Pradesh High Court approved the merger, after the Bombay high court gave its approval.<ref>[https://web.archive.org/web/20130928034113/http://articles.timesofindia.indiatimes.com/2013-06-11/software-services/39898413_1_mahindra-satyam-tech-mahindra-merger Mahindra Satyam, Tech Mahindra merger gets AP High Court's nod – Times Of India]. ''The Times of India''. (11 June 2013). Retrieved 2013-09-23.</ref><ref>[http://economictimes.indiatimes.com/tech/ites/andhra-pradesh-high-court-clears-merger-of-mahindra-satyam-with-tech-mahindra/articleshow/20538518.cms Andhra Pradesh High Court clears merger of Mahindra Satyam with Tech Mahindra – Economic Times]. ''The Economic Times''. Retrieved 2013-09-23.</ref><ref>{{Cite web|url=https://www.telegraphindia.com/business/satyam-merger-on-course/cid/286862|title=Satyam merger on course|date=6 December 2013|website=The Telegraph, India|language=en|access-date=2019-09-22}}</ref>

A new management structure was announced for the new entity, led by [[Anand Mahindra]] as Chairman, [[Vineet Nayyar]] as Vice Chairman and [[C. P. Gurnani]] as the CEO and Managing Director.<ref>[http://indiatoday.intoday.in/story/m-satyam-tech-mahindra-hope-to-merge-in-four-weeks/1/279629.html M-Satyam, Tech Mahindra hope to merge in four weeks : Market, News – India Today]. ''India Today''.intoday.in (11 June 2013). Retrieved 2013-09-23.</ref><ref>[http://www.moneycontrol.com/news/business/will-complete-tech-mah-satyam-merger8-weeks-nayyar-_896218.html Will complete Tech Mah, Satyam merger in 8 weeks: Nayyar]. Moneycontrol.com (11 June 2013). Retrieved 2013-09-23.</ref><ref>[http://www.thehindu.com/business/Industry/high-court-clears-merger-of-mahindra-satyam-with-tech-mahindra/article4803837.ece MSat-Tech Mahindra merger gets court nod]. The Hindu (11 June 2013). Retrieved 2013-09-23.</ref> The merger was announced to be complete on 25 June 2013, creating India's fifth largest software services company with a turnover of US$2.7 billion.<ref>{{Cite web|url=https://zeenews.india.com/business/news/companies/mahindra-satyam-merges-with-tech-mahindra-becomes-5th-biggest-it-firm_78656.html|title=Mahindra Satyam merges with Tech Mahindra; becomes 5th biggest IT firm|date=2013-06-25|website=Zee News|language=en|access-date=2019-09-22}}</ref><ref>{{Cite web|url=https://www.moneycontrol.com/news/business/companies/-1814309.html|title=Tech Mahindra, Satyam Computer complete merger|website=Moneycontrol|access-date=2019-09-22}}</ref> Mahindra Satyam shareholders received two shares of Tech Mahindra stock for every 17 shares of Mahindra Satyam stock they owned.<ref>{{Cite news|url=https://www.business-standard.com/article/companies/satyam-is-no-more-to-live-on-as-part-of-tech-mahindra-113071400336_1.html|title=Satyam is no more; to live on as part of Tech Mahindra|agency=Press Trust of India|date=2013-07-14|work=Business Standard|access-date=2019-09-22}}</ref> Shares in the new entity began trading on 12 July 2013.<ref>[http://www.rediff.com/business/report/tech-mahindra-completes-share-swap-issued-capital-goes-up/20130712.htm Tech Mahindra completes share swap, issued capital goes up – Rediff.com Business]. Rediff.com. Retrieved 2013-09-23.</ref><ref>[http://timesofindia.indiatimes.com/business/india-business/Tech-Mahindra-completes-share-swap/articleshow/21044763.cms Tech Mahindra completes share swap – The Times of India]. ''The Times of India''. Retrieved 2013-09-23.</ref>

On 24 July 2013, a division bench of Andhra Pradesh High Court admitted a petition filed by Ekadanta Greenfields and Saptaswara Agro Farms challenging the Mahindra Satyam-Tech Mahindra merger order.<ref>{{Cite web|url=https://www.thehindubusinessline.com/info-tech/Two-firms-appeal-against-TechM-Mahindra-Satyam-merger-order/article20635077.ece|title=Two firms appeal against TechM, Mahindra Satyam merger order|last=Kurmanath|first=K. V.|website=@businessline|language=en|access-date=2019-09-22}}</ref> The two firms argued that their objections to the merger had not been considered in full.

===Finances===
After the scandal hit, the companies revenue collapsed and the new new chairman, [[Vineet Nayyar]], suggested that a turnaround would take three years.<ref>[http://indiaearnings.moneycontrol.com/sub_india/compnews.php?autono=522593 indiaearnings.moneycontrol.com]</ref> By the April–June quarter of 2011, the company was profitable once again.<ref>{{Cite web|url=http://profit.ndtv.com/news/show/mahindra-satyam-reports-rs-225-cr-profit-in-q1-168250|title=Mahindra Satyam reports Rs 225-cr profit in Q1 – NDTV Profit|last=Press Trust of India|date=2011-08-09|website=Wayback Machine|url-status=live|archive-url=https://web.archive.org/web/20111004231023/http://profit.ndtv.com/news/show/mahindra-satyam-reports-rs-225-cr-profit-in-q1-168250|archive-date=2011-10-04|access-date=2019-09-22}}</ref><ref>[http://www.moneycontrol.com/news/business/mahindra-satyam-q2-net-soars-europe-crisisworry_614931.html Mahindra Satyam Q2 net soars; Europe crisis a worry]. Moneycontrol.com (11 November 2011). Retrieved 2013-09-23.</ref> In 2013 Mahindra Satyam declared a 30% dividend. Nayyar commented "The turnaround of Mahindra Satyam is symbolically and practically complete. The merger (with Tech Mahindra), which is in its penultimate phase, will open a new chapter for the company. We thank all stakeholders for supporting us during this crucial phase".<ref>[http://www.financialexpress.com/news/mahindra-satyam-q4-net-profit-down-by-15-declares-30-dividend/1116679 Mahindra Satyam quarterly net profit down by 15%, sets dividend at 30%] {{webarchive|url=https://web.archive.org/web/20130927082535/http://www.financialexpress.com/news/mahindra-satyam-q4-net-profit-down-by-15-declares-30-dividend/1116679 |date=27 September 2013 }}. Financialexpress.com (17 May 2013). Retrieved 2013-09-23.</ref><ref>[http://zeenews.india.com/business/news/companies/mahindra-satyam-q4-net-down-by-15-declares-30-dividend_76313.html Mahindra Satyam Q4 net down by 15%, declares 30% dividend]. Zeenews.india.com. Retrieved 2013-09-23.</ref>

==Controversies==

===Tax evasion===
Before the asset inflation scandal hit, the [[Income Tax Department]] had issued notices to the company seeking {{INR}} 6.17 billion tax, for the assessment years from 2003–04 to 2008–09 after disallowing exemptions claimed by the software firm. The [[Central Board of Direct Taxes]] attached the properties of Mahindra Satyam on 30 January 2012,<ref name=":4">{{Cite web|url=https://www.gadgetsnow.com/tech-news/Mahindra-Satyam-gets-attachment-order-from-I-T-dept/articleshow/11740565.cms|title=Mahindra Satyam gets attachment order from I-T dept – Latest News {{!}} Gadgets Now|date=2012-02-03|website=Gadget Now|access-date=2019-09-22}}</ref> after issuing notices to the company seeking payment of the tax.<ref name=":4" /> The [[Andhra Pradesh High Court]] stayed the order in February 2012.<ref>{{Cite web|url=https://m.economictimes.com/tech/ites/mahindra-satyam-says-hc-has-stayed-i-t-order-to-attach-co-assets/articleshow/12009828.cms|title=Mahindra Satyam says HC has stayed I-T order to attach co assets – The Economic Times on Mobile|date=2012-02-23|website=The Economic Times Mobile|language=en|access-date=2019-09-22}}</ref>

===Maytas acquisition===
In December 2008, Satyam founder B. Ramalinga Raju made a final attempt to conceal his falsification of the Satyam Computer Services balance sheets by acquiring [[Maytas|Maytas Infrastructure]] and [[Maytas Properties]] for $1.6 billion, despite concerns raised by independent directors.<ref>{{Cite web|url=https://business.rediff.com/report/2009/dec/03/tech-raju-pressured-satyam-board.htm|title=Raju pressured Satyam board|last=Reddy|first=Ch. Prashanth|last2=Mohan|first2=B. Krishna|date=3 December 2009|website=Rediff|language=en|access-date=2019-09-22}}</ref> Both companies were founded by Raju's family members (Maytas is "Satyam" reversed) and were owned by Raju's sons. This eventually led to a review of the deal by the government,<ref>{{Cite news|url=https://timesofindia.indiatimes.com/city/hyderabad/Centre-refers-Satyam-deal-to-ROC/articleshow/3864623.cms|title=Centre refers Satyam deal to ROC {{!}} Hyderabad News – Times of India|date=20 December 2008|newspaper=The Times of India|language=en|access-date=2019-09-22|agency=Ist}}</ref> and a veiled criticism by the then [[Vice President of India]] [[Hamid Ansari]].<ref>{{Cite news|url=https://www.thehindu.com/todays-paper/tp-business/Plain-speak-by-Hamid-Ansari-on-governance/article15364955.ece|title=Plain-speak by Hamid Ansari on governance|last=Dasgupta|first=Ashok|date=2008-12-21|work=The Hindu|access-date=2019-09-22|language=en-IN|issn=0971-751X}}</ref> Several of Satyam's clients responded by re-evaluating their relationship with the company.<ref>{{Cite news|url=https://www.business-standard.com/article/technology/satyam-clients-likely-to-re-evaluate-contracts-108121801054_1.html|title=Satyam clients likely to re-evaluate contracts|last=Mishra|first=Bibhu Ranjan|date=2008-12-18|work=Business Standard|access-date=2019-09-22}}</ref> Satyam's investors lost about {{INRConvert|3300|c|year=2008}} in the related [[panic selling]], as Satyam's shares fell 55% on the [[New York Stock Exchange]].<ref>{{cite news|url=http://profit.ndtv.com/2008/12/17224312/Satyam-investors-lose-Rs-3300.html|date=2008-12-17|location=Mumbai|publisher=[[NDTV]] Convergence|archive-url=https://web.archive.org/web/20081220075642/http://profit.ndtv.com/2008/12/17224312/Satyam-investors-lose-Rs-3300.html|archive-date=2008-12-20|title=Satyam investors lose Rs 3300 cr in a day}}</ref> Four members of the board of directors resigned on 29 December 2008.<ref>{{Cite news|url=https://economictimes.indiatimes.com/tech/software/fourth-independent-director-m-rao-resigns-from-satyam/articleshow/3909517.cms|title=Fourth independent director M Rao resigns from Satyam|date=2008-12-29|work=The Economic Times|access-date=2019-09-22}}</ref>

===Accounting scandal===
{{Main|Satyam scandal}}
On 7 January 2009, Chairman [[Ramalinga Raju|Raju]] resigned after publicly announcing his involvement in a massive [[accounting fraud]], in which he had inflated the company's cash assets by over $1 billion.<ref name=":2" /> In a letter to the [[Securities and Exchange Board of India]], he explained that "what started as a marginal gap between actual operating profit and the one reflected in the books of accounts continued to grow over the years ... It has attained unmanageable proportions as the size of the company operations grew significantly".

In 2015, Raju was sentenced to seven years in jail and fined about $800,000.<ref name=":2" />

==See also==

* [[List of IT consulting firms]]
* [[Fortune India 500]]

==References==
{{Reflist}}

==External links==
{{Commons category}}
* [http://www.mahindrasatyam.com/ Official website]
* [http://www.mahindrasatyam.com/ The Official Corporate Website for Satyam Computer Services]
* [http://www.financialexpress.com/news/weve-repositioned-mahindra-satyam-as-an-ict-firm/674569/ Mahindra Satyam repositioned as an ICT firm]
* [http://fraudsofindia.blogspot.com/2009/02/bartronics-ltd-mini-satyam.html Are there more Satyam's in making?]
* [http://www.businessweek.com/it100/2005/company/SAY.htm BusinessWeek profile]
* [https://web.archive.org/web/20090101034637/http://infotech.indiatimes.com/quickiearticleshow/3907991.cms The rise and fall of Satyam]
* [http://www.hindu.com/nic/satyam-chairman-statement.pdf Raju's Statement] – Scanned Copy – "Satyam CEO's Letter to its board of directors" – Hyderabad, India, 7 January 2009
* {{cite video
| people = Merger of MSAT and TechM
| date = 2011
| title = Merger of IT Companies
| url = http://www.moneycontrol.com/video/business/mahsatyam-techmahtoappointbankerstofastenmerger_581330.html
| medium = Documentary
| location = India
| publisher=Moneycontrol.com
}}

{{Mahindra Group}}
{{Authority control}}

[[Category:Defunct companies of India]]
[[Category:Software companies established in 1987]]
[[Category:1987 establishments in Andhra Pradesh]]
[[Category:Indian companies established in 1987]]
[[Category:Companies based in Hyderabad, India]]
[[Category:Software companies of India]]

Mahindra Satyam - Revision history

CleanupBot II at 10:32, 14 August 2023