NEW DELHI The Company Law Board (CLB) on Thursday approved the takeover of fraud-hit Satyam Computer Services Ltd by mid-sized outsourcer Tech Mahindra Ltd, as had been expected.
"Having convinced myself that the board of directors has selected a technically and financially competent/qualified strategic investor... I accept the recommendation," CLB chairman S. Balasubramanian said in a statement.
Tech Mahindra was the highest bidder for a controlling stake in Satyam on Monday. The deal will propel Tech Mahindra into the top tier of Indian IT firms and throw a lifeline to the firm at the centre of India's biggest corporate scandal.
Tech Mahindra, 31 percent owned by Britain's BT Group, will pay $351 million for a 31 percent preferential allotment of new shares in Satyam and will make an open offer for a further 20 percent at a cost of up to around $225 million.
The bid, in an auction conducted by the government-appointed board of Satyam, had to be approved by the Company Law Board. Analysts had the expected the deal to be approved.
Three months ago, Satyam's founder and chairman shocked investors by saying profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter.
The government quickly stepped in and sacked the board to limit damage to India's once-shining IT sector.