Tech Mahindra, which has completed raising funds for acquiring the 51-per cent equity in fraud-hit Satyam Computer Services, including the 31 per cent it bid for and the mandatory 20 per cent public offer, and may acquire up to 70 per cent stake in the IT company, but short of taking the firm private.

The maximum holding of Tech Mahindra in Satyam would, however, be capped at 51 per cent if it fails to acquire a minimum of 20 per cent in the public offer.

The agreement also mandates that Satyam would have to allot further shares to Tech Mahindra through a second preferential allotment if the open offer results in tendering of less than 20 per cent of equity.

Venturbay Consultants Pvt Ltd, a special purpose vehicle created by Tech Mahindra for the Satyam bid, has deposited Rs1,756 crore ($352.6 million) for the initial 31 per cent stake purchase and the funds needed for the subsequent open offer. Satyam would now make the preferential share allotment.

The open offer has to be at a minimum price of Rs58 a share, the price Tech Mahindra paid for the initial 31 per cent stake in Satyam.

Tech Mahindra by agreement has to cap its open offer at "a maximum of that percentage of shares which when aggregated with the 31 per cent acquired from the company (Satyam) in the preferential allotment and any other shares already beneficiary owned by the bidder would not exceed 70 per cent of the enhanced share capital."

The total holdings of Tech Mahindra in Satyam should also "under no circumstances exceed that percentage which could result in the ADS being delisted from the NYSE."

The Company Law Board approved the proposed transaction on 16 April and Tech Mahindra is expected to announce the open offer early next week.

Besides, the 'share subscription agreement' requires Tech Mahindra to "use its reasonable best efforts", with regard to its public offer, to maintain the listing of Satyam shares on the New York Stock Exchange (NYSE) for at least one year.

Tech Mahindra would also ensure not to "take any action in respect of the shares and ADSs that would result in the applicability of the going-private transaction" as per the US regulations for a period of at least one year after the closing date of the public offer.

Reports, meanwhile revealed that  Satyam Computer founder Ramalinga Raju had even paid taxes towards non-existent interest income to make  Satyam's falsified accounts to the tune of Rs7,000 crore through fictitious fixed deposits, current account and interest on FDs look real.

Raju had falsified Rs7,333 crore of Satyam's account as of the quarter ended September 2008, sources said.