Sonjoy Anand, CFO, Tech Mahindra says it is just a procedural step but clarified that the merger is not getting delayed by six months. In fact, he says, scheme was valid only till March 31, 2013, it has only been extended to September 30, 2013 to get approval from Andhra Pradesh High Court.
He feels it will not take too long to get okay from AP HC and the merger will be completed in next few months.
Below is the verbatim transcript of his interview to CNBC-TV18.
Q: Could you highlight why the merger is getting delayed by six months, what is holding it?
A: I would like to clarify that we are not saying that the merger is getting delayed by six months. The board approval for the merger scheme was valid till March 31, 2013. So, the boards of all the companies involved in the merger have extended the validity of the scheme to September 30, 2013. It is just a procedural step.
Q: Why didn’t all the approvals come through in their earlier timeframe of March 31 of this year?
A: There is one fundamental step, which is still pending. It is the approval from the Andhra Pradesh (AP) High Court (HC). The Maharashtra HC approval came through in September of last year. The AP HC approval is still pending and the next hearing is scheduled for April 1.
Q: Does that look like a protracted battle and what is Maytas Properties or IL&FS engineering’s demand?
A: I do not think it should end up in a protracted battle. The issue that had been raised was that do our accounts deal with that sum of money correctly. For this the court has appointed an independent firm to look into.
That independent firm has submitted a report, which is now in the public domain. It has been filed with the court and that says very clearly that the treatment of that amount by Mahindra Satyam is correct and appropriate.
Q: So, you will not be called upon to return that Rs 1,230 crore as the company was demanding?
A: No, we do not believe so.
Q: When do you think therefore this legal issue can be settled by the AP HC, is it just a matter of one more hearing?
A: I cannot pre-judge the court process. The only thing I will say is that if one looks at what is required, the shareholders of both companies have cleared it by overwhelming majority. The Maharashtra HC has cleared the merger process.
There was this one objection, which was coming on behalf of those 37 companies. The court appointed an independent firm and they have come back and endorsed the treatment by Mahindra Satyam. So, according to me, all the key steps have been taken. Legal – as to when the court will finally clear it, we will have to go through the process and wait for it. However, according to me it should not take very long.
Q: Is there any other petition which is pending by the AP HC except this?
A: That is a difficult one for me to respond, in the sense that specific to the merger, it is the objection by these 37 companies and the IL&FS group, which is before the court at the moment.
Q: When do you expect all the merger formalities to get over?
A: In our view, it should not take long. However, there are court processes and we will have to wait and see. I believe, somewhere over the next few months, we should have this done and dusted.