Ramalinga Raju Puts Break on Satyam-Tech Mahindra Merger

Bangalore: The Satyam Computer Services merger with Tech Mahindra is contested by Ramalinga Raju and his family and this will possibly complicate the deal which was approved by most shareholders.

The discarded founder of Satyam and his family claimed at the court in Andhra Pradesh that the company has not restated the accounts properly and Satyam owes them around 1,230 crore. S Niranjan Reddy, a lawyer representing the Raju family and the 35 companies which is seeking the court's intervention to stall the merger said, "This is nothing but distortion of the financials."

A separate petition has been filed in the high court by IL&FS Engineering, saying that the new owners of Satyam owe it 650 crore since it is now owner of two companies that supposedly lent money to what was once India's fourth-largest software exporter. A majority control over Satyam was gained by Tech Mahindra via government mediated auction as soon as Ramalinga confessed cook the books to the tune of at least Rs 7,139 crore. He is also said to have around 1, 230 crore from the firms owned by his relatives.

Raju’s family owned two of the largest infrastructures i.e. Maytas Infrastructure and Maytas Properties, which was taken over by IL&FS, the engineering and construction firm. Tech Mahindra is now looking forward to a merger with Satyam to create a $2.4-billion entity with a larger portfolio of services that can better compete in the IT services market place. Ramalinga’s family objects that 1, 230 crore should be reflected as liabilities of Satyam and provision must be made for the repayment of it. Their lawyer Reddy said, "If Satyam were to merge into Tech Mahindra, all the liabilities of Satyam must be passed onto Tech Mahindra, so that the rights of all the stakeholders, including the creditors, are protected.”