I will turn Satyam around tomorrow: Mahindra

The intensity of public interest in Satyam is something which Anand Mahindra, the vice-chairman and managing director of the eponymoustractors-to-software group, hadn’t quite baragained for when he first decided to bid for the scam-hit IT major. The software industry, he says, has become an icon of modern India, and the Satyam debacle had eroded public trust which meant that anyone taking over the troubled company would face the burden of immense public expectation. “I didn’t realise the impact this would have on the public arena. I really hadn’t understood the extent to which people in the public domain had got their emotions involved in this. The IT industry had clearly been a champion and a symbol of India’s new self-esteem. And the unfortunate vicissitudes of Satyam had begun to erode that,” Mr Mahindra said in the course of a lengthy interaction with ET NOW, this paper’s business channel. Despite the burdens and responsibilities, the upside of a successful turnaround is potentially enormous for the $6.5-billion M&M group. “The kind of feedback we have got since then—a lot of it exaggerated sometimes, including reactions about our being white knights and saving the situation—are surprising to me. They also bring a huge burden and responsibility to us. So, in that sense, I think if we succeed in turning around Satyam, clearly it will have added dramatically to the reputation of our group.” For Mr Mahindra, turning Satyam around is top priority. It’s a job which is perfectly feasible, he says, for despite the misdeeds of its former promoters, the now-disgraced Ramalinga Raju, Mahindra Satyam, as it is now called, is a real company with considerable capabilities. “Anyone who makes time frames beyond tomorrow probably isn’t pushing himself hard enough, so I’d like to turn Satyam around tomorrow,” he said. The reason for his confidence comes from the feedback from customers during various road shows. “All the customers we met said that arguably, these were among the best people from a delivery point of view. These were real people who were very customer-centric. Once I knew from customers that these were real people doing a real job and really delivering value, it became doable.” SUCCESSION PLANS Mr Mahindra also spoke about succession plans for the brass at Mahindra Towers and the possibility of his daughters joining M&M. Giving credit to group HR head Rajiv Dubey, who has put in place a “robust talent management and succession process”, Mr Mahindra said the board has “insisted on a succession plan beginning with me all the way down. The top layer of management considered in this talent management process are each expected to provide a succession plan. A longer term one and, to put it rather crudely, a ‘hit by the bus’ scenario,” he explained. As part of the plan, there is another echelon waiting to take over from the current top layer which includes several executives in their 60s “There are going to be more signs and activities we’ll initiate which will expose this new leadership to the public,” Mr Mahindra said. As for his daughters joining the group, Mr Mahindra says they could if they wanted to, though he sounds doubtful if this will happen, “If youlook at what they’re doing right now—one wants to be a filmmaker, the other is a graphic designer—and you ask me as a gambling man, will they have anything to do with the group, I would say it is very unlikely,” Mr Mahindra said. Mr Mahindra succeeded his uncle Keshub Mahindra, who remains the group’s chairman. The elder Mahindra, who rarely interacts with the media, though he did speak to ET after the Satyam deal, is consulted on all key decisions. M&M, originally called Mahindra and Mohammad, traces its roots to the pre-partition era, having been founded in 1945. One of its founders, Ghulam Mohammed, later become Pakistan’s first finance minister. Mr Mahindra, who makes it a point to emphasise the company’s liberal and inclusive nature, sometimes sounds like a man for whom public service could be an option. Any chance then of following in the footsteps of former Infosys co-chairman Nandan Nilekani? Not in the foreseeable future, says Mr Mahindra. “I am having too much fun right now.” TURNING SATYAM AROUND On the immediate future, it’s Satyam’s class action suits that are top of the mind. Silent on the extent to which Tech Mahindra will spend to settle these suits (”The matter is sub-judice,” he said) and the time-frame by when they will done said, Mr Mahindra said the “class action suits were well known as we went into the bidding. So, we would have taken them into account. I think these are suits that we can win and settle.” After the acquisition, the Satyam-Tech Mahindra combine has become the fourth-largest tech company in India with a wider business footprint beyond Tech Mahindra’s earlier telecom focus. That’s the reason Satyam was on the radar of Tech Mahindra’s board long before the Rs 7,000-crore scam came to light in January this year. “We had reached a strategic point in Tech Mahindra where the board had determined that it was time to now look beyond the telecom focus,” Mr Mahindra said. “But when you are close to a billion dollars in turnover, how do you make a meaningful entry into other verticals? You can do it organically but it is going to take an awful long time and the industry was already maturing.” Satyam was among the various “inorganic options” that the Tech Mahindra board looked at. “I actually approached Mr (Ramalinga) Raju a year before this had happened, proposing some kind of alliance between the companies. I was puzzled by his lack of response,” Mr Mahindra added. Despite the lack of response from Mr Raju, the complementary feature was what pushed the Mahindra bid in the Satyam deal. “It was clear to us that we had the best strategic fit,” Mr Mahindra said, despite the “spirited competition”. As for buying out L&T’s stake in Mahindra Satyam, now that the company has asked for a waiver of the lock-in clause, he added: “If it is true (about the waiver request) and they ask for it, we will deal with it at that point in time.”