Mahindra Satyam to exit American Depository Share programme

August 10th, 2011 - 12:16 am ICT by IANS  

Hyderabad, Aug 9 (IANS) Infotech major Mahindra Satyam Tuesday said it will wind down its American Depository Share (ADS) programme in 2012 due to regulatory issues with the US Securities and Exchange Commission (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.

Mahindra Satyam chairman Vineet Nayyar told a news conference here that it is purely a regulatory issue on account of the fraud perpetrated by the former management over several years and that this would have no impact on its business in the US.

“Despite the unavailability of certain historical financial information, the new management succeeded in meeting regulatory requirements in India, 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,” he said.

“We could not fulfill certain requirements of SEC which were beyond our control,” he added.

He assured the ADS holders that they will be in a position to liquidate their holdings in an orderly fashion and that facility will be available to them over the next six to eight months.

He maintained that the winding down of US trading will have no impact on the company’s business operations in the US or elsewhere. “Our commitment to the US market and servicing customers in the US remains unchanged,” he said.

ADS trading in the US has accounted for approximately 12.77 percent of the total volume of trading in the company’s equity shares in the last twelve months.

ADSs presently represent approximately 107,428,392 or 9.13 percent of the company’s outstanding equity shares.

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