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Rediff.com  » Business » CLB authorises Mahindra Satyam to allot shares

CLB authorises Mahindra Satyam to allot shares

July 07, 2009 14:24 IST

The Company Law Board has authorised Mahindra Satyam to allot 19,86,58,498 (approximately 198.66 million) equity shares of Rs 2 each to Venturebay.

'The company (Mahindra Satyam) is authorised to issue and allot 19,86,58,498 (approximately 198.66 million) equity shares of Rs 2 each at the premium of Rs 2.50 to Venturebay,' said CLB Chairman S Balasubramanian, allowing Mahindra Satyam's application requesting permission to issue equity.

Mahindra Satyam (earlier Satyam Computer) had moved the CLB after Venturebay failed to subscribe to 20 per cent of Satyam's shares from the open market.

The CLB also authorised Mahindra Satyam to appoint auditors to conduct an audit of the company.

'The board of the company is authorised to appoint statutory auditors to conduct and carry out audit of the company of the year 2009-2010 subject to notification by the general body as when the AGM is held,' said the CLB chairman in his order.

On the government's request to recall its six directors from the board of scam-hit IT firm Mahindra Satyam, the CLB chairman said it would be considered later.

The CLB is likely to pass the order on recalling the government's nominees on the board of Mahindra Satyam after the Hyderabad-based company completes its second round of preferential allocation of shares, which will take Tech Mahindra's stake to 42 per cent.

Following the CLB order on April 16, Tech Mahindra was allotted 31 per cent equity shares of the company at Rs 1,756 crore (Rs 17.56 billion). In addition, the CLB had directed Venturebay to take 20 per cent shares from the open market.

Following this direction, Venturebay had deposited Rs 1,156 crore (Rs 11.56 billion) in an escrow account for the public offer.

Venturebay offered a price of Rs 58 per share for acquiring the 20 per cent stake. However, it got a very poor response as the shares of the Satyam Computer was hovering around Rs 75, over 29 per cent higher than the open offer price.

In a regulatory filing on Monday, Tech Mahindra said, "A total of 420,915 shares of Satyam common stock (including 268,656 shares underlying ADSs) were validly tendered and not withdrawn, representing less than 0.1 per cent of the outstanding shares of common stock."

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