Posts Tagged ‘Satyam’

Satyam case: Court to announce verdict date on 30 October

October 28th, 2014

A special court conducting the trial of the accounting fraud at erstwhile Satyam Computer Services Ltd will announce the date of verdict on 30 October, nearly six years after corporate India’s biggest scandal came to light. Outsourcing45

Additional chief metropolitan magistrate B.V.L.N. Chakravarthi on Monday said he will announce the date of judgement on Thursday, and directed all the 10 accused, including former Satyam chairman B. Ramalinga Raju, to appear before it that day, two lawyers present inside the court hall said.

The judge will also hear last minute arguments from the defence challenging the authenticity of some of the electronic evidence presented by the Central Bureau of Investigation (CBI) that investigated the fraud.

The defence has filed a memo before the court pointing out that some of the electronic evidence submitted against Raju and the other accused was inadmissible because it was not retrieved in accordance with provisions of the Evidence Act.

“We have already presented a memo in this regard. The judge will hear our views that day,” Ramakrishna Raju, a lawyer in Ramalinga Raju’s defence team said.

Raju’s lawyers are relying on a Supreme Court judgement delivered last month that ruled that electronic evidence not documented properly were inadmissible in the courts. The three-judge bench held that electronic records submitted as evidence should comply with the Evidence Act.

The ruling meant that electronic evidence such as phone call records, electronic mails (emails) and bank statements submitted as hard copies to a court should be verified as authentic.

“Sections 65A and 65B of Evidence Act lay out the special procedure for offering electronic evidence in a court. Section 65B requires the person responsible for the computer on which the electronic record was created or stored to issue a certificate establishing the authenticity of any electronic evidence,” said constitutional lawyer Bhairav Acharya who practices in the Supreme Court of India.

“They are saying that electronic documents were not retrieved in accordance with the laws of the country,” a CBI prosecutor said. The CBI has submitted some electronic records such as bank records, email conversations as hard evidence in the court.

The investigating agency has accused former Satyam chairman B. Ramalinga Raju of inflating revenues, fabricating invoices, falsifying accounts and income tax returns, and faking fixed deposit receipts in collaboration with some of his key executives, to paint a rosy picture of the company’s financials to deceive the public.

His actions, along with the nine other accused, caused a loss of Rs.14,000 crore to Satyam shareholders, the CBI estimated in its chargesheet.

Once the poster boy of the Indian outsourcing industry, Raju confessed to fudging Satyam’s accounts to the tune of Rs.7,136 crore in January 2009 – a statement he disowned during the trial. A total of 216 witnesses and 3,038 documents were examined during the hearing of the case.

The verdict , when it’s finally pronounced, will decide the fate of prime accused Raju and his brothers, B. Rama Raju (then managing director of Satyam) and B. Suryanarayana Raju, along with some former executives – former chief financial officer Srinivas Vadlamani, former chief internal auditor V.S. Prabhakar Gupta, G. Ramakrishna, D. Venkatapathi Raju and Ch. Srisailam.

Two former employees of external auditor Price Waterhouse, T. Srinivas and Subramani Gopalakrishnan are also standing trial. Price Waterhouse is an affiliate of PricewaterhouseCooper’s in India.

Four former Satyam executives – Ramalinga Raju, Rama Raju, Srinivas and Gupta – have also been barred from the capital markets by Securities and Exchange Board of India (Sebi) for 14 years, and have been ordered to cough up Rs.1,848.93 crore with 12% interest from 2009 (totalling about Rs.2958.29 crore) for pocketing “wrongful gains” in share transactions.

The Rajus have challenged the Sebi order.

Besides the CBI, the Enforcement Directorate (ED) has also filed a chargesheet against 213 people including Raju and 166 firms including Satyam Computer under different provisions of Prevention of Money Laundering Act (PMLA), and attached different properties belonging to them. Satyam Computer has been absorbed by its new owner Tech Mahindra Ltd, which purchased the scandal-ridden firm in 2009 in a government overseen auction.

Source:http://www.livemint.com/Companies/NvxQu2tUMl9gLd7ev8l8qI/Satyam-case-Court-may-announce-judgement-date-on-30-October.html

Satyam is no more; to live on as part of Tech Mahindra

July 15th, 2013

Once a darling of the Indian IT sector and the stock market, the scam-hit erstwhile Satyam has formally ceased to exist as an individual entity by formally merging with Tech Mahindra. Outsourcing5

Its journey saw a fraud bringing down the company’s valuation by over 95 per cent within weeks, while a subsequent revival brought in an over 10-fold surge from the dumps.

Still, it is the remains of this once scam-hit company on which its saviour Tech MahindraBSE -0.29 % will bank upon significantly to move up the ladders of the Indian IT sector charts, say industry experts.

After debuting on the stock market in 1995, Satyam soon went on to become one of the country’s top five IT companies and its share price was trading Rs 250 level in late 2008.

It came to be known by January 2009 that Satyam (a Sanskrit word that means truth) was home to India’s biggest ever corporate scam, admitted to by its own founder and then Chairman B Ramalinga Raju, and the scandal broke the company’s share price to as low as Rs 11.50.

A quick revival, however, followed with its takeover by Tech Mahindra through a government-monitored auction process and its name was changed to Mahindra Satyam.

Tech Mahindra on Friday announced the completion of allocation of its shares to the shareholders of Satyam Computer ServicesBSE 0.00 %, raising the issued capital of the firm from 129 million shares to 232 million.

Many changes have come through under Mahindras and the group finally decided to amalgamate the two IT companies under its fold. Shares of Mahindra SatyamBSE 0.00 % are no longer traded on the bourses.

They last traded at a level close to Rs 120 a piece and the value of each erstwhile Satyam share is now equivalent to about Rs 130 a piece, taking into account Tech Mahindra’s current share price of Rs 1,120.

As per the merger ratio, two Tech Mahindra shares have been given for every 17 shares held by Satyam investors.

Experts say it made sense for the new owner to drop the Satyam brand name from the business, given its infamous past.

CapitalVia Global Research Head of Research Vivek Gupta said: “The good thing to cheer for the investors is that now they own a stake in the company which is much more clean in all the aspects and is amongst the top-five IT companies.”

Following the integration, Tech Mahindra is now amongst the top-5 IT companies of India with revenues of USD 2.7 billion and expects it to rise to USD 5 billion by 2015.

“Satyam was at the brink of non-existence a couple of years back for reasons known to all. Tech Mahindra took its reins after the fiasco and brought the company back into life,” Ashika Stock Broking Vice President Equity Research Paras Bothra said.

The integration of two entities makes it a much larger software company and will also aid in cracking and winning larger outsourcing contracts.

“We remain optimistic with Tech Mahindra’s ability in generating long term shareholders wealth,” Bothra said.

CNI ResearchBSE -4.58 % CMD Kishor P Ostwal said: “I see a bright future for the company after its merger with Tech Mahindra. Tech Mahindra is emerging as a more stronger player and the outlook is very bright.”

Source:http://economictimes.indiatimes.com/tech/ites/satyam-is-no-more-to-live-on-as-part-of-tech-mahindra/articleshow/21069139.cms

Coaliton may embrace IT outsourcing: report

May 21st, 2013

Tech industry leaders are expecting a Coalition government to embrace IT outsourcing like never before in a bid to reduce operating costs.

According to The Australian Financial Review, the strategy is not new but hasn’t been aggressively pursued by the government. Indian IT companies like Tata Consultancy Services (TCS), Mahindra Satyam, Infosys, Wipro and HCL have largely missed out on Australian government tenders due to a pervading fear among the public service that they may end up replacing local jobs.outsourcing2

However, this approach may change when it comes into power and attempts to find $75 billion worth in savings.

To this point, the director of Sydney-based outsourcing specialist Mindfields, Mohit Sharma told the AFR that the Australian government spends comparatively more than both the British and US governments due to inability to harness IT outsourcing.

Source:http://www.businessspectator.com.au/news/2013/5/21/technology/coaliton-may-embrace-it-outsourcing-report

All Mah Satyam claims cleared post Aberdeen deal: Nayyar

December 13th, 2012

British telecom giant BT offloaded 9.1 percent stake in Tech Mahindra   for Rs 1,011.4 crore on Wednesday, exiting from the Indian IT services firm.

Vineet Nayyar, vice chairman, Tech Mahindra told CNBC-TV18 that though BT’s IT budget is coming down, but Tech Mahindra still remains their preferred partner.Vineet_Nayyar_1-190

“A share of BT’s wallet on technology spend is growing as a percentage. Their reliance on our services is increasing as the percentage grows, but in absolute terms the inflow of money has come down marginally and could go down further a little bit,” he elaborated.

BT had set up the technology outsourcing firm in joint venture with Mahindra & Mahindra in 1986. The British company had around 30 per cent stake in Tech Mahindra initially.

Meanwhile, Mahindra Satyam   has settled claims from Aberdeen Global and 22 funds that had claimed damages, which were to the extent of USD 298.3 million.

Vineet Nayyar who is also the chairman of Mahindra Satyam said, “All claims with respect to Mahindra Satyam are cleared post Aberdeen Global deal and all external litigations are behind the company now.”

Source:http://www.moneycontrol.com/news/business/all-mah-satyam-claims-cleared-post-aberdeen-deal-nayyar_794566.html

Mahindra Satyam: Comeback trail on track

October 11th, 2010

Recently when Mahindra Satyam restated its financial statements for the years FY09 and FY10, after a gap of almost two years, industry watchers couldn’t help but wonder how far the company had come in its quest to escape its disastrous past. The key question was whether the company, which once was the preferred business partner for more than a third of the Fortune 500 companies, manage to regain the trust it lost when it committed the country’s greatest corporate scam?
The answer is that Mahindra Satyam today is in a much better shape to bid competitively in the market. The company’s balance sheet and financials are expected to boost confidence among clients going forward. For the last two years, the company couldn’t request for big proposals as large organisations look for strong financial disclosure and steady balance sheet for their outsourcing partners so that they know the company can handle bulk deals. Having the results out will now allow Mahindra Satyam to compete in the market with other players.
Sanjeev Hota, senior research analyst, Sharekhan, says, “Future looks much brighter for Mahindra Satyam now. The situation is definitely going to improve with the company announcing results. Now it can more openly pitch for big projects and clients.”

Analysts feel Mahindra Satyam, which has a predominant market in the US and APAC region, will continue to drive their major business from these regions. Business is expected to come from sectors like BFSI, retail and manufacturing, the anchor verticals for the company. “North America will generate the highest chunk of volume for the company and will be the major growth driver,” says Hota. In FY10, Mahindra Satyam got its largest account from North America. It also added clients in sectors like manufacturing, healthcare and public sectors.

The company has also planned investments in infrastructure and cloud-based applications to attract more clients. “Technology will be the differentiator for us. We will continue to invest in infrastructure management, BPO, enterprise management and manufacturing,” says CP Gurnani, CEO, Mahindra Satyam.

“The company has competencies in enterprise management and by investing into it further to scale up its vertical expertise will help it to participate in end-to-end transformational engagements across various industries,” says Srishti Anand, IT analyst, Angel Broking.

However, pricing model will be a difficult task for Mahindra Satyam and getting quality clients at the right price will be a challenge. “To retain clients either they have to offer discounts compared to competition or clients should have trust in their domain expertise. They have to leverage their Tech Mahindra expertise to get big clients,” says an analyst. After the scam broke, the company offered huge discounts to their clients to retain them. Industry experts are confident of Mahindra Satyam adding large deals to their kitty, but how they do it is a question that needs to be answered.

After Tech Mahindra took over the reins of Satyam Computers in April 2009, the management started restructuring the business to get the company back on track.

However, it was not an easy task for the company. Post the scam in January 2009, the company experienced heavy churn in clients asking for outright termination.

The company lost 194 clients resulting in a 38% drop in revenue year on year. Mahindra Satyam lost majority of its clients in the BFSI space where it holds strongest domain expertise. “It appears that client loss was in the key account and it will take another two to three years to scale it back to FY09 levels,” says Anand. However, it managed to add 44 new clients across sectors in FY10, with major chunk coming from the BFSI segment. The company bagged the largest deal from the BFSI sector, one of its core vertical. As one of the new account, it added the largest bank from Australia. “For any IT company, the new client relationship begins with small engagements typically in the range of $1-5 million or even less. Thus these new client accounts will take time to add incremental value to Mahindra Satyam,” adds Anand.

Mahindra Satyam, the then Satyam Computers, had 500 active clients before the scam broke out in 2009. Currently, it has been able to hold on to 350 clients. It’s not just client attrition, the company had to battle with high employee attrition rate of 40% year on year too. Scam-hit Mahindra Satyam is struggling to retain their employees at all levels. The employee count has declined from 45,000 in FY09 to 27,000 in FY10 indicating the severe ramp-down mode that the company was in through FY10.

Analysts feel that rising attrition will be a major issue for the company and supply chain constraints will be a challenge to deal with. To curb attrition, the company has planned a significant campus hiring and has also started a buddy-referral programme. “We have hired about 3,000 people and mostly at entry level. They have almost finished their training and now the plan is to hire some more,” says Hari T, chief people officer, Mahindra Satyam.

Satyam, which provides back office support and IT services to hundreds of companies, has Cisco, General Electric and GlaxoSmithKline among its top-listed clients. However, going forward industry watchers feel the company’s current financial position will be truly reflected in its recent quarter performance, which is due to be out in mid -November. “We await those numbers to decide on the future trajectory,” says Anand.

Source:http://www.indianexpress.com/news/mahindra-satyam-comeback-trail-on-track/695382/0

Corporate blogging yet to grow among IT firms

October 6th, 2010

Many social media experts strongly believe that the corporate blogs or blogging is a very effective tool to build good and transparent relationship between the top management and their employees, investors, customers, general public as well as media.

“Corporate blogs serve the purpose of sharing information such as business decisions, change in management or any other events that happen within the organization. It helps to keep the employees in loop and integrate them with the top management in a transparent and well-informed manner,” says Beth Kanter, a renowned social media expert.

While the IT industry runs on developing software applications, technology and solutions for business purposes, one could vouch for the tech sector to be highly blog-savvy compared to other verticals.

Though Indian IT firms, to some extent, have added a few elements of social media such as podcast, webinars, Facebook page and Twitter links on their company websites, they still lag behind their foreign counterparts when it comes to corporate blogging.

Take Mahindra Satyam, the beleaguered IT services firm which unveiled financial results for 2008-09 and 2009-10 last week. As the company’s website has a blog section, one could have searched for blog post from top management – like the chief executive officer’s (CEO) message addressing its employees post the results. But there was no such blog posts related to the company’s financial output on its portal.

While the media reported and analyzed the results in different ways, it’s obvious that such news reports could play on the minds of the company’s large workforce in terms of job security and future growth.

Ideally, in such situation, a blog post or message from CEO or top management could boost employees’ confidence and put an end to any speculations evolving from external world.

“Corporate blogs should be seen a key tool for getting genuine information about companies, its projects and businesses, its employees and customers. It should help to establish interaction with employees, investors, media and others,” says Sandip Dhedia, Blogsdna.com’s Editor-in-chief from Mumbai.

But it’s contrasting, how the Indian tech firms are pursuing corporate blogging.

Interestingly, Tata Consultancy Services (TCS), the IT services and outsourcing giant, doesn’t have a blog section on its website. On HCL website too, the blog section is absent.

“In India, corporate blogging is lagging behind as it was seen more as a personal or individual writing. Though corporate blogging is very important today, companies still have the legacy mindset as far as blogging is concerned. They don’t share the company’s day-to-day information, business and project updates on the blogs, even for their employees’ knowledge,” points out Dhedia.

Wipro Technologies, on the other hand, has a quiet active blog section, called Wipro blog, which shows the recent blog posts from top executives like Girish Paranjpe and Suresh Vaswani, the joint CEOs and board members of Wipro.

In addition, top tech experts like Anand Padmanabhan, senior vice president – Energy & Utilities, Anurag Behar, Wipro’s Chief Sustainability Officer (CSO) and others keep the company’s blog section active and updated regularly. These blog posts talk about key issues and topics such as new technology and business trends.

Even Infosys Technologies has a well-maintained blog section with regular posts contributed by the CEO and managing director Kris Gopalakrishnan, Infosys China’s chief operating officer (COO) Rangarajan Vellamore and other top executives.

Global tech and software enterprises like Oracle, Hewlett Packard (HP) and Dell have already set a trend in corporate blogging which not just talks of their own organizations but also tries to create dialog with other firms and leaders.

This makes their corporate blogs more informative, interesting and insightful for readers including both their employees and general people. However, Indian tech firms still need to learn a lot to gain maturity in order to fulfill the real purpose of corporate blogging.

Source:http://www.ciol.com/News/News/News-Reports/Corporate-blogging-yet-to-grow-among-IT-firms/142055/0/

Huge losses at Satyam? Employees not worried

October 5th, 2010

Employees of Mahindra Satyam, the erstwhile Satyam Computer Services, say they are not worried about the financials of the company. Last week, Mahindra Satyam reported an aggregate loss of Rs 8,300 crore (Rs 83 billion) for 2008-09 and 2009-10.

“The results were a very honest statement that the company has given. And keeping in view the liabilities they had, I feel it was a very good exercise that they had done, considering the complexities involved. It was a fruitful projection of the status of the company,” said Varun Kumar (name changed), an employee for over 10 years.

Two days after Mahindra Satyam announced its restated financial accounts, most employees Business Standard had a chance to meet at the company’s Madhapur campus, Satyam Infocity, were brimming with confidence. A few who had gone through the turbulent times after Ramalinga Raju, the founder and chairman of Satyam Computer Services, confessed to fudging the books, say they feel confident and stable in the hands of the new management.

“The financial disclosures have eased the concerns among clients. And in fact, we have started to enjoy respect in the market after the results’ announcement and now we are feeling more safe in the hands of the Mahindra & Mahindra group,” Kumar said.

For Hardesh, a B1 band (leadership position) associate (the satyam term of a staffer), it’s work as usual. A large US-based customer that his 500-odd technology team has been working with is more confident now about delivery. Hardesh feels the employees had not expected the results to be ‘jazzy’ and that the company management is in the process of reinforcing the ‘bench’, which was cut to half as part of a rightsizing exercise undertaken a year ago.

“The current facility (Satyam Infocity, which also houses the company’s headquarters) is full to its 5,000 capacity and the company is coming up with a new 3,000-seater building within the same campus. Besides, with enquiries from new clients from various geographies and extended contracts from existing customers, the company is enhancing its bench to a sizable strength,” Hardesh said.

On the service delivery front, some clients are not satisfied, feels Satyen Gupta, an associate from the delivery practice. “From day one, customers left. It’s not because the delivery was bad. Earlier, it used to be appreciation. Today, it is for granted. Because during any change, there is always a challenge. There is some kind of stabilisation that still needs to happen. However, the M&M leadership are putting all these things together,” he said.

Sowmya Rao, an associate, feels though the Mahindra management had not disturbed the overall fabric of human relations, fear in terms of job cut still persist among some Satyamites, as the employees are called at the information technology (IT) outsourcing company, after the proposed reverse merger happens. This is likely after the announcement of the Q1 and Q2 results of 2010-11 on November 15.

“In the event of merger, my gut feeling is that there will be some job cuts, as there will be some multiple elements clashing in terms of expertise. Like, we are strong on the engineering side, while Tech Mahindra is strong at telecom. Job cuts are bound to happen. but largely in the senior level. Uncertainty on job losses among the entry and mid-level employees will gradually wafer out after the merger,” she said.

After the restatement of accounts, Mahindra Satyam employs about 27,000 associates, including its BPO arm. The Mahindra Satyam management had made it clear that the merger would happen after November 15.

Employees, however, feel the merged entity would certainly be in a better position to go out in the market and compete with other top Indian IT services firms and global companies.

Source:http://www.mynews.in/News/huge_losses_at_satyam_employees_not_worried_N96922.html

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