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Satyam includes Tech Mahindra representatives in board

John Ribeiro | May 25, 2009
The government nominees will continue until further notice

BANGALORE, 22 MAY 2009 - Indian outsourcer Satyam Computer Services has appointed to its board four representatives from Tech Mahindra, the company which is acquiring a majority stake in Satyam.

The appointment of the new board members becomes effective from June 1, Satyam said on Friday (22 May).

The six nominees to Satyam's board, appointed in January by the Indian government, will however continue until further notice, in line with an earlier government order.

Tech Mahindra is however already involved in the management of Satyam, a Satyam spokeswoman said on Friday.

Satyam was plunged into a crisis in January after the company's founder B. Ramalinga Raju, disclosed that its profits had been inflated for several years.

The government superseded in January the board of Satyam and appointed a new board with its own nominees, to steer the company through a working capital crunch and fear of losing clients.

Tech Mahindra's subsidiary Venturbay Consultants was selected to acquire a 51 percent stake in the company in a global bid in April.

Satyam said earlier this month that it had allotted 31 percent of the equity in the company to Venturbay Consultants, through an issue of fresh equity. Venturbay paid Indian Rupees 17.6 billion (US$351 million for the 31 percent share.

Tech Mahindra will acquire through Venturbay another 20 percent of the equity through a public offering to other shareholders of Satyam.

Tech Mahindra's nominees on the Satyam board include Vineet Nayyar , vice chairman, managing director, and CEO of Tech Mahindra, and three other key executives of the company.

Satyam's accounts for several years are still being restated.

 

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