Mahindra Satyam funds parked with Tech Mahindra as ICDs

HYDERABAD: Mahindra Satyam today said it has parked its cash reserves with Tech Mahindra in the form of Inter Corporate Deposits ( ICDs) to maximise returns.

The statement comes amid reports that Tech Mahindra has used Mahindra Satyam's fund for USD 87.1 million (about Rs 484 crore) acquisition of Hutchison Global Services.

The ICDs were given to maximise returns and it is up to Tech Mahindra as to how they use those funds, Mahindra Satyam CFO Vasant Krishnan said.

"We will always look at opportunities to maximise returns. ICDs have been given to Tech Mahindra. As corporate deposits they will be completely on arms length basis. And we get more returns on such ICDs," Krishnan told reporters on the sidelines of company's Annual General Meeting held here.

"We have got multiple options for investments. You should ask Tech Mahindra how they have used the funds," he replied when asked whether Mahindra Satyam's funds were used for the acquisition.

While refusing to share the quantum of ICDs to Tech Mahindra, Krishnan said the total cash reserves of his company were around Rs 3,000 crore, and ICDs were given after June 30.

Following an admission of multi-crore accounting fraud by Satyam Computer founder and the then chairman B Ramlinga Raju in January 2009, the government stepped in and set up a new board. Later, Tech Mahindra bought 46 per cent stake in the firm through a formal public auction process.

Tech Mahindra took over reins of the company in April 2009 and rebranded it as Mahindra Satyam.

The merger process of the two companies is at the advanced stage and awaiting nod of High Courts of Andhra Pradesh and Bombay.

Meanwhile, Mahindra Satyam Chairman Vineet Nayyar said at the AGM that the swap ratio of 2:17, giving shareholders two Tech Mahindra shares for every 17 owned in Mahindra Satyam, was decided by consultants and was done in a fair manner.

Some of the minority shareholders have raised objections to the swap ratio and alleged that Mahindra Satyam shareholders got raw deal.