Mahindra Satyam to withdraw its American Depository Shares
09 August 2011
Consulting and IT services firm Mahindra Satyam today announced plans to wind down its American Depository Share (ADS) programme in 2012. The ADSs currently trade on the over-the-counter (OTC) market in the US.
The company's equity shares underlying its ADSs and the ADSs themselves were registered with the SEC since May 2001, when the company began trading on the New York Stock Exchange (NYSE), the company said in a release.
Mahindra Satyam said it has been difficult for the company to follow stringent and rather time consuming regulatory procedures for floating ADS on the NYSE.
The registration obligates the company to file annual and other reports with the SEC, which it has, however, been unable to file post September 2008, because the financial irregularities identified for earlier years were substantial in amount, Mahindra Satyam said.
The company said the financial irregularities perpetrated across multiple accounting periods during the pre-takeover years affecting many areas are yet to be traced and the non-availability of required information/documentation has impacted its ability to prepare the financial statements under US GAAP.
Mahindra Satyam said it remained fully committed to serving customers in the US and that the withdrawal of the ADRs will have no impact on business operations in the US or elsewhere.
The company has posted a net profit of Rs225 crore in the fiscal first quarter ended 30 June as against a loss of Rs327 crore in the previous quarter.