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Mahindra Satyam delisting from NYSE
By siliconindia
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Monday, 27 September 2010, 15:21 IST
Bangalore: Mahindra Satyam, will delist from the New York Stock Exchange, or NYSE, after realizing that it cannot meet the October 15 deadline for preparing financial statements under U.S. accounting standards. The company intends to file a Form 25, or notification of removal from listing, with the US regulator, Securities and Exchange Commission or SEC, around October 4, and anticipates the ADRs to be delisted from the NYSE on or close to October 14.
Satyam Computer Services' promoter, Ramalinga Raju, confessed to hiding liabilities and overstating profits for many years in January 2009. "Due to the late SEC filings, which are among the unfortunate results of the misdeeds of former management, we are delisting from the NYSE," said Vineet Nayyar, chairman, Mahindra Satyam.
The problems with Satyam's financial accounts meant that the company did not publish its financial results for 2008-09 and 2009-10. The last date for publishing results for these two years under U.S. accounting standards, or U.S. GAAP, is October 15, according to SEC rules. Recent delisting announcement is a clear indication that the company will not be able to adhere to American accounting standards in such a short time-frame.
But experts say that delisting will not solve the company's problems. Private equity investors and experts said that lack of restated accounts for the prior years would not be a major hurdle for any stake sale in the company. However, it would impact potential investors to that extent that they would not have any historical data about the company's performance.