CLB Approves Tech Mahindra's Bid For Satyam

India’s Company Law Board (CLB) has approved Tech Mahindra's proposed acquisition of a 31 per cent stake in Satyam Computer Services Ltd. Tech Mahindra has been asked to deposit Rs 1,756 crore for the deal by 21 April 2009 in a designated account. Venturbay Consultants Private Limited, a subsidiary controlled by Tech Mahindra Limited, was declared as the highest bidder to acquire a controlling stake in the fraud-hit Satyam on Monday.
The approval allows Tech Mahindra to make a mandatory open offer for a 20 per cent stake from shareholders and nominate its executives to Satyam’s board.

The Company Law Board, by its order, has granted Tech Mahindra the right to appoint no more than four of its nominees as directors on the company's board, upon Tech Mahindra depositing in escrow, in cash, the total funds necessary to consummate the Public Offer. The present six directors of the company appointed by the Central Government will continue on the board of the company until further orders of the Company Law Board and no additional directors need be appointed by the Central Government.

The CLB, in its order, has also directed state and central government agencies not to initiate any action, in exercise of their powers, against Tech Mahindra's nominee directors for acts prior to 9 January 2009, without the prior leave of the Company Law Board, for as long as Company Petition 1 of 2009 is pending before the Company Law Board.

Since Satyam has to restate accounts for nearly six years, the CLB has also allowed Satyam to file all required documents, including quarterly earnings reports, by 31 December 2009. Satyam last filed results in October 2008 for the July-September quarter.

According to sources, Satyam may get a new name and also a new CEO with the change of the owner. Ram Mynampati, the interim chief executive officer of Satyam Computer Services, may exit when Tech Mahindra takes management control of the Hyderabad-based IT firm.