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Mahindra IT business posts growth despite challenges to BPO industry

Veronica C. Silva | Aug. 26, 2011
Investments in US and emerging economies are bringing results for the IT company of conglomerate Mahindra Group.

IDC added that a merged Mahindra Satyam and Tech Mahindra would be a '' formidable competitive force in the Asia Pacific, especially for Indian IT service providers and other regional players''.

''A combined revenue base in excess of US$2 billion with approximately 20 percent coming from emerging markets (Asia Pacific, Africa, and the Middle East) will give the merged entity a strong growth story.''

US delisting

While Mahindra Satyam remains focused on growth, even in the US, the company said it would delist its American Depository Shares (ADS) from the US by 2012.

The company said it cannot comply with US Securities and Exchange Commission (SEC) requirements of filing its financial reports since some historical information and documents are missing. Another reason cited by the company for failing to file financial reports is that ''the financial irregularities identified for earlier years were substantial in amount''.

Fearing that the SEC would eventually revoke its registration for failing to comply with US government requirements, Mahindra Satyam said it would ''wind down the ADS programme in an orderly fashion.''

Shareholders of the ADS, however, are assured of their equity shares during the transition period and are asked to contact the company's ADS depository.

Mahindra Satyam said the delisting will not affect its operations in the US and elsewhere.

Said Nayyar: "Our commitment to the US market and servicing customers in the US remains unchanged.  This is purely a regulatory issue on account of the fraud perpetrated by the former management over several years, that was unprecedented in its nature, magnitude and complexity.''

 

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