Rijswijk, 12 augustus 2011 – ICT-dienstverlener Mahindra Satyam verwacht zijn American Depository Share-programma in 2012 af te bouwen. De American Depository Shares (ADS) worden momenteel verhandeld op de Over-The-Counter-markt (OTC) in de Verenigde Staten.
Hieronder vindt u het volledige Engelstalige persbericht.
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LVTPR
Gijs van Beek
Tel.: 030 65 65 070
E-mail :
mahindrasatyam@lvtpr.com
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Mahindra Satyam announces plans to wind-down its American Depository Shareprogram in 2012 in an orderly manner
Company remains fully committed to serving customers in the US
Announcement has no impact on business operations in the US or elsewhere
Hyderabad, India — August 9, 2011 — Mahindra Satyam, a leading global consulting and IT services provider, today announced that the Company expects to wind-down its American Depository Share program in 2012. The Company's American Depository Shares (ADSs) currently trade on the over-the-counter (OTC) market in the US.
Since May 2001, the Company’s equity shares underlying its American Depository Shares (ADSs) and the ADSs themselves continue to be registered with the SEC when the Company began trading on the New York Stock Exchange (NYSE). The registration obligates the Company to file annual and other reports with the SEC. The Company has, however, been unable to file the required reports post September 2008, because the financial irregularities identified for earlier years were substantial in amount, perpetrated across multiple accounting periods affecting many areas and due to non-availability of required information/documentation relating to several unexplained transactions and amounts pertaining to the period affected by the financial irregularities. This has a resultant continuing impact on the Company’s ability to prepare the financial statements under US GAAP and to achieve a form of audit opinion thereon that would comply with the SEC's requirement that such opinions contain no audit qualifications including scope limitations arising from the Company’s inability to provide required information/documentation relating to the period affected by the financial irregularities as indicated above. Accordingly, the Company has now determined that it will not be able to become current in its SEC filing obligations.
The Company’s planned sequence was to first meet Indian regulatory requirements with respect to its disclosure and financial statements and then turn to address U.S. requirements. Despite the non-availability of certain historical financial information due to the aforesaid reasons, the Company’s new management succeeded in meeting all regulatory requirements in India and is now current with respect to the company’s audited financial results under generally accepted accounting principles in India (Indian GAAP).
If an SEC reporting company is unable to file required reports, the SEC has the authority to revoke that company’s registration. Consequently, the Company expects SEC to revoke the Company’s registration at some time in the future. The revocation of registration, as and when it occurs, would prevent continued trading of the ADSs and the underlying equity shares in US markets or by US persons, and in order to protect the interests of ADS holders, the Company intends now to wind down the ADS program in an orderly fashion.
The Company presently expects that the ADS facility and related trading in the United States will exist for approximately seven months from the date a termination notice is distributed to ADS holders. The Company intends to distribute that notice under the applicable Deposit Agreement within the next week. The Company’s objective is to provide a significant period of time to facilitate an orderly wind-down of the ADS program. Although the SEC Staff has indicated its willingness to work with the Company towards the objectives stated above, this time period assumes that no third party, such as the SEC, acts to reduce this transition period.
Throughout any transition period, holders of ADSs will be entitled to receive equity shares of the Company upon surrender of their ADSs to the depository, Citibank N.A., subject to applicable regulatory restrictions of India, the US and jurisdictions where holders reside. The Company’s equity securities will continue to trade in India on the Bombay Stock Exchange and the National Stock Exchange. ADS trading in the US has accounted for approximately 12.77% of the total volume of trading in the company’s equity shares in the last twelve months, and ADSs presently represent approximately 107,428,392 or 9.13%, of the outstanding equity shares.
If you are a current or prospective holder of Mahindra Satyam’s ADSs, please consult the FAQs on the website for important additional details.
Commenting on the anticipated wind-down of US trading and subsequent deregistration, Mr. Vineet Nayyar, Chairman, Mahindra Satyam, said, “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. 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. 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.”
“The wind-down of US trading and revocation of the Company’s registration under the Securities Exchange Act of 1934 will have no impact on the Company’s business operations in the United States or elsewhere. On the contrary, our commitment to enhance our presence in the US remains unchanged - our sales and delivery platform in the United States has been further reinforced through significant investments in acquiring experienced skills and capability, and we expect that this effort will enhance our growth opportunities in this market,” added Mr. C.P. Gurnani, CEO, Mahindra Satyam.
About Mahindra Satyam
Mahindra Satyam 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.
Mahindra Satyam is part of the $12.5 billion Mahindra Group, a global industrial federation of companies and one of the top 10 business houses based in India. The Group’s interests span automotive products, aviation, components, farm equipment, financial services, hospitality, information technology, logistics, real estate and retail.
Mahindra Satyam 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.
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Safe Harbor
Certain statements made in this announcement may include “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the US Securities Exchange Act of 1934, as amended. These statements may be identified by the use of words like “anticipate,” “believe,” “estimate,” “expect,” “intend,” “may,” “plan,” “forecast,” “project,” “will,” “should,” “seek,” and similar expressions. These forward-looking statements include, but are not limited to, statements as to the expected impact of and benefits from the deregistration, statements as to the timing and dates of effectiveness of notices and filings to be made in connection with the deregistration process, statements as to the intention to wind-down the ADS program and the timing and expected impact thereof and statements as to the intention to continue providing information to investors. The forward-looking statements reflect our current views and assumptions and are subject to risks and uncertainties. The following factors, and others which are discussed in our public filings and submissions with the SEC, are among those that may cause actual and future results and trends to differ materially from our forward-looking statements: the general economic conditions and competition in the markets and businesses in which we operate; our relationship with significant clients; the outcome of legal proceedings or governmental inquiries; uncertainties inherent in operating internationally; and the impact of laws and regulations. Many of these factors are beyond our ability to control or predict. Given these factors, you should not place undue reliance on the forward-looking statements. Mahindra Satyam undertakes no duty to update any forward – looking statements.