The Mahindra & Mahindra group's vice-chairman and managing director, Anand Mahindra, spoke to the media in Mumbai just after the Mahindra Satyam brass announced the restated accounts in Hyderabad. Edited excerpts:How difficult was the task and what are the key challenges ahead?
This is an opportunity to reset people's views of the past and, of course, to dispel any undue pessimism about the future. People have forgotten the magnitude of the task.
We went into this situation facing a clean-up of what was India's largest corporate scam. The nature of this task is difficult to describe - terrabytes of data, 7,500 contracts to be renewed and lot of data residing with the CBI. And, we were asked in a very short period of time to bring it up to date.This is a company that has retained most of its clients since we took over, has acquired 50 new logos and I am delighted to announce today that Mahindra Satyam over the past few days was awarded a very significant contract by MasterCard, which reflects our return to getting business from the financial services sector. By wonderful coincidence, the first UID card handed out today by the Prime Minister and Mrs Gandhi was backed by Mahindra Satyam technology. It will take a little bit of time before we can count ourselves in the pink of health and compete with the best in terms of gross margins, but we fully intend to get there.
Do you plan to merge Mahindra Satyam and Tech Mahindra and, if yes, when?
In April last year, when I was asked the same question, I said very categorically that our long-term intent was to merge the companies. We remain fully committed to that objective. We can only begin the process after our accounts are current, which will be after November 15. Then, we will follow the due process of consultation, the high court process and so on.
What's the update on de-listing of ADRs from NYSE?The process of getting up to speed with the US GAAP standards will take about six months and in that time, we will review whether we see it beneficial to remain listed or not. I plan to clarify that to the New York Stock Exchange.
The update on the U-Paid suit?
The sword of Damocles hanging over us was the U-Paid suit. If you had asked me a year ago what was my biggest unknown, that was the probably it. That has been settled.
Do you still see this as a game-changer?
Of course, this is a game-changer because if you look at Mahindra's IT sector today, we are twice the size in terms of revenues, even with the shrunken ones of Mahindra Satyam.
More important, we are no longer a simply focused telecom solutions company. We have knowledge of a breadth of domains. The analogy that comes to mind is of somebody who is running a one-legged race and having freed our legs, we are ready to run.
What are Mahindra Satyam's cash reserves?
We are still sitting on over Rs 2,000 crore (Rs 20 billion)of cash. One of the most cash-rich companies in the Mahindra group.
What synergies do you see between Satyam and the Mahindra group?
One reason we bid for this company was the very strong 'complementarity' we saw in them. On the one hand, we had a company that was focused on one domain and very strong in that and dependent mainly on the European area for its revenues.
On the other hand, you had a company that was geographically dependent on the US and was strong on most domains but not really strong in telecom. So, the synergies were obvious.
They are two separate companies and we will follow very strict governance norms on how they co-operate. And, wherever we get an opportunity to legitimately garner synergy, even well before the merger, we will do that.