Software exporter Mahindra Satyam today said it planned to wind down its American Depository Share (ADS) programme in 2012 due to regulatory issues with the US market regulator SEC.
The company's ADS were delisted from the New York Stock Exchange in October last year and are currently trading on the over-the-counter (OTC) market in the US.
The delisting move followed the company's inability to comply with certain US regulations.
In a statement, Mahindra Satyam said it expected to "wind down its ADS programme in 2012".
Commenting on the decision to wind down trading of its shares in the US and subsequent deregistration, Mahindra Satyam Chairman Vineet Nayyar said it is purely a regulatory issue on account of the fraud perpetrated by the former management over several years.
"We, therefore, have no choice but to exit the US registration system in an orderly manner. Although, this is not something we would have chosen to do, we are compelled by circumstances to take this decision," Nayyar said.
The latest announcement comes even as there has been indications in recent times that the firm would look at relisting its ADS on the New York Stock Exchange.
ADS are shares issued by non-American companies to raise money from the US.
Satyam Computer Services was at the centre of a massive accounting fraud perpetrated by its founder chairman B Ramalinga Raju. The firm, which was later taken over by Tech Mahindra, has been rebranded as Mahindra Satyam.
"Despite the unavailability of certain historical financial information, the new management succeeded in meeting regulatory requirements in India with respect to the company's audited financial results under Indian GAAP, but we have found that what was acceptable to Indian regulators does not comport with SEC norms," he noted.
OTC trading involves direct transactions between two parties in financial instruments such as stocks, bonds, commodities or derivatives.
Mahindra Satyam CEO CP Gurnani said the winding down of the company's share trading in the US would have no impact on its operations.
