The Mahindra Satyam (earlier known as Satyam Computer Services) stock slumped four per cent to Rs 96.45 on the Bombay Stock Exchange today amid reports that important stakeholders have expressed concern over the company’s decision to delist its American Depositary Receipts (ADRs) from the New York Stock Exchange.
The scrip has lost 9.43 per cent in the last two trading sessions, knocking Rs 1,183 crore off its market capitalisation in a rising market. In initial trades on Monday, the company’s ADR price was down 3.85 per cent to $4.49. The price had plunged 24 per cent on Friday.
The company had said on Thursday it would delist its ADRs on October 14 due to non-compliance, adding it would likely miss a deadline to restate results for the financial year 2009.
Many investors sought details on the circumstances under which such a decision was taken and its planned road map for merger with Tech Mahindra. L&T, one of the largest shareholders in Mahindra Satyam, had earlier expressed concern over Mahindra Satyam keeping investors in the dark about its performance over the past year.
Chairman Vineet Nayyar told TV channels today that Mahindra Satyam ADRs would continue to trade on the Over-The-Counter Exchange Of India, adding that the decision to delist was voluntary, so that trade could continue. He also said Mahindra Satyam had not yet decided on relisting after the reconciliation with the US GAAP accounting standards.
Satyam was given until October 15 to file its annual report for the financial year ended March 31, 2009, with US regulators.
Satyam had said it would not be able to file restated financial results according to the US accounting standards before the deadline. “Due to our late SEC filings, which are among the unfortunate results of the misdeeds of the former management, we are delisting from the NYSE,” the company had said.
It added its board would review its audited financial results for the financial years 2009 and 2010 on September 29, which analysts said would take it closer to a merger with its new parent, Tech Mahindra.
Tech Mahindra, which bought Satyam in April 2009 and is operating it as an independent company, has said it can only merge the firm into the parent after the restated results for financial years 2009 and 2010 are announced.
