Satyam pulls out of $75 mn Australian projectBy IANS
Friday, September 11, 2009
CANBERA - Mahindra Satyam has pulled out of a $75 million software development project that the disgraced Satyam founder had promised to set up in Australia’s Geelong city, media reports said Friday.
Sujit Baksi, the company’s president of corporate affairs, formally conveyed the decision to the government of Victoria state through a letter addressed to provincial IT Minister John Lenders, the Australian daily reported.
The planned IT project spread over 10 hectares of land in Deakin University in Geelong was expected to create 2,000 jobs.
According to the daily Geelong Advertiser, Baksi wrote: “The need to concentrate on an extensive internal restructuring program of our business precludes Mahindra Satyam from embarking on expansion projects of this kind.”
“While Mahindra Satyam is disappointed that it cannot proceed with the centre, it reaffirms its commitment to future expansion in Victoria when circumstances allow.”
A Satyam Australia spokeswoman confirmed that the project has been cancelled.
In July, Tech Mahindra, the new owner of Satyam, said it was committed to the project and was investigating its viability.
“We’re committed to the project, we’ve got due diligence in place,” said Tech Mahindra executive vice-chairman Vineet Nayyar. “The goal is to complete the project but we need to investigate how much investment is needed.”
According to the report, Mahindra Satyam has also agreed to pay back the undisclosed cash grant to the Victorian Labor government headed by Prime Minister John Brumby that the company was given to set up the IT hub in Geelong.
The fate of the Geelong project had been hanging in balance after Satyam founder and chairman B. Ramalinga Raju admitted to a $1-billion accounting fraud in January.