Tech Mahindra Provides Update Regarding Recent Press Reports in India
Hyderabad, India — December 1, 2009 — Tech Mahindra (the brand identity of Satyam Computer Services Ltd. — NYSE: SAY) (the “Company”) today commented that it is aware of recent press reports that the Central Bureau of Investigation (“CBI”) of India has filed a supplementary ‘chargesheet’ against certain individuals in connection with the financial irregularities confessed by Mr. Ramalinga Raju, the former Chairman of the Company on January 7 of this year. A chargesheet is a formal document of accusation prepared by a law-enforcement agency in India. The Company wishes to point out to investors that reported allegations regarding the magnitude of investor harm or historical misstatements in the Company’s accounting records do not necessarily shed light on the present financial position and liabilities of the Company. This release is intended to clarify this issue.
With respect to the financial position of the Company, as previously reported, pursuant to orders from Hon’ble Company Law Board of India, the Company has been given extension for filing of returns/documents which are required to be filed with various statutory authorities under various statutes, whether already due or to become due, until June 30, 2010. This extension would also apply to publication of quarterly financial reports as required by the listing agreement, whether overdue or to become due.
The Company is currently defending certain lawsuits in the United States of America. The Company cannot currently quantify its potential liability in those lawsuits.
In India, as previously reported in a Form 6-K filed with the U.S. Securities and Exchange Commission on November 17, 2009, Tech Mahindra has received legal notices from 37 companies claiming a refund of Rs.1230 crores (equivalent to approximately USD 265 million at exchange rate of Rs.46.47 per US Dollar), allegedly given as a temporary advance. The notices claim the money back to allegedly repay their creditors, some of which include Maytas Properties Limited and Maytas Infra Limited. The confession letter dated January 7, 2009, of the former Chairman of the Company also refers to a net amount of Rs.1230 crores arranged to the Company by the 37 companies. On November 14, 2009, Mahindra Satyam replied to the legal notices stating that the claims are legally untenable.
The Company is also aware of recent press articles reporting that the supplementary charge sheet states that those accused of the financial irregularities forged board resolutions and obtained loans of Rs.1,220 crore (equivalent to approximately USD 264 million) from banks without proper authorization. The Company is not currently aware of the full details of these alleged loans and so cannot assess at this time their potential impact on the Company, if any. However, to date no claims or demands in this regard have been asserted against the Company by any bank.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The information provided herein includes forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Statements that are not historical facts are forward-looking statements. Forward-looking statements are based on beliefs and assumptions by management and on information currently available to management. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update any of them publicly in light of new information or future events. Additional factors that could cause actual results to differ materially from those contained in any forward-looking statement include, without limitation: the outcome of pending litigation and other proceedings involving the Company, including the Company’s ongoing litigation in the United States of America; unanticipated accounting issues or audit issues which might arise as the Company continues to investigate and correct the alleged prior misstatements in its accounting records (the “Review”); unanticipated additional liabilities of the Company that are discovered as a result of the Review or as a result of ongoing investigations in India and the United States of America; the likelihood that deficiencies in the Company’s internal controls constitute material weaknesses in the Company’s internal control over financial reporting; unanticipated issues regarding the Review that prevent or delay the Company’s independent registered public accounting firm from relying upon the Review or that require additional efforts, documentation, procedures, review or investigation; the Company’s ability to design or improve internal controls to address issues detected in the Review or by management in its reassessment of the Company’s internal controls; difficulties in controlling expenses, including costs of the Review, legal compliance matters or internal controls review, improvement and remediation; the Company’s ability to become current in its periodic reporting under Indian and American laws; general business, economic and political conditions; the Company’s ability to effectively and successfully implement its financial and strategic alternatives, as well as business strategies, and manage the risks in its business; and the reactions of the marketplace to any of the foregoing.
About Tech Mahindra
Tech Mahindra (NYSE: SAY) is a leading global business and information technology services company that leverages deep industry and functional expertise, leading technology practices, and an advanced, global delivery model to help clients transform their highest-value business processes and improve their business performance.
The company's professionals excel in enterprise solutions, supply chain management, client relationship management, business intelligence, business process quality, engineering and product lifecycle management, and infrastructure services, among other key capabilities.
Tech Mahindra is part of the $6.3 billion Mahindra Group, a global industrial conglomerate and one of the top 10 industrial firms based in India. The Group’s interests span financial services, automotive products, trade, retail and logistics, information technology and infrastructure development.
Tech Mahindra development and delivery centers in the US, Canada, Brazil, the UK, Hungary, Egypt, UAE, India, China, Malaysia, Singapore, and Australia serve numerous clients, including many Fortune 500 organizations.
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. The forward-looking statements contained herein are subject to certain risks and uncertainties that could cause actual results to differ materially from those reflected in the forward-looking statements. Mahindra Satyam undertakes no duty to update any forward-looking statements.
Tech Mahindra represents the connected world, offering innovative and customer-centric information technology experiences, enabling Enterprises, Associates and the Society to Rise™. We are a USD 4.2 billion company with 117,000+ professionals across 90 countries, helping over 837 global customers including Fortune 500 companies. Our convergent, digital, design experiences, innovation platforms and reusable assets connect across a number of technologies to deliver tangible business value and experiences to our stakeholders. Tech Mahindra is amongst the Fab 50 companies in Asia (Forbes 2016 list).
We are part of the USD 17.8 billion Mahindra Group that employs more than 200,000 people in over 100 countries. The Group operates in the key industries that drive economic growth, enjoying a leadership position in tractors, utility vehicles,after-market, information technology and vacation ownership.
Connect with us on www.techmahindra.com