'Creditors should not lose rights because of Satyam scam'

HYDERABAD: Lawyers of creditors and minority shareholders today raised objections with regard to Mahindra Satyam-Tech Mahindra merger proposal in the current form before the Andhra Pradesh High Court.

The creditors and minority shareholders are seeking protection of their financial interests, which according to them is not appropriately guarded in the merger proposal.

HC is hearing the application filed by Mahindra Satyam ( Satyam Computer Services Ltd) to merge with TechM.

Earlier, MSat had said when the new management took over the company (scam-hit Satyam), there was no amount available in its books and no credit was shown to the lenders.

Niranjan Reddy, appearing for 35 creditor companies, argued that SCSL, under Ramalinga Raju, was involved in accounting scam but not the 35 creditor companies, and because of the scam, the creditors' right to recover the dues does not extinguish.

Senior advocate Sudipto Sircar said the appointed date for merer scheme was prejudicial to the interests of the minority shareholders.

MSat board approved the merger scheme on March 21, 2012, based on the financial performance of Satyam till March 2011. However, the performance for the year ended March 2012 had improved significantly, he said.

The fixing of swap ratio based on the performance till March 2011 resulted in an unfair swap ratio for the minority shareholders, Sircar added.

Mahindra Satyam shareholders will get two shares of Tech Mahindra of Rs 10 each for every 17 shares they hold.

Mahindra Satyam Chairman Vineet Nayyar had earlier said the decision on the swap ratio was taken after due diligence conducted by international consultants such as KPMG.

Tech Mahindra took over the scam-hit Satyam in April, 2009, and re-branded it as Mahindra Satyam. The competition watchdog CCI and the stock exchanges have approved the proposed merger, which will create a USD 2.4 billion entity.