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MERRILL LYNCH & CO : Merrill to move most work from Satyam to TCS: report

02/16/2009 | 12:58am EST

MUMBAI (Reuters) - Merrill Lynch is shifting a majority of its contracts from troubled Indian software firm Satyam Computer Services Ltd to rival Tata Consultancy Services , the Economic Times reported on Monday.

The Merrill account contributed about $40 million to Satyam's yearly revenues, the newspaper said, citing unnamed software industry sources.

"We do not comment on individual clients," a Satyam spokeswoman told Reuters.

Satyam has been struggling for survival since founder Ramalinga Raju resigned in January, disclosing that accounts had been overstated and about $1 billion in cash and bank balances were missing, in India's biggest corporate scandal.

The paper said U.S.-based Merrill, part of Bank of America Corp <BAC.N>, had sent a team in early February to assess the situation at Satyam's headquarters, and had told the fraud-tainted outsourcer of its intention to hand over most of the IT services to another vendor.

The bulk of Merrill's contract will now be handled by TCS and Satyam will continue to service parts of the contract, but there are no plans to terminate the contract completely, the paper said.

"IT companies win and lose contracts all the time," Satyam Chairman Kiran Karnik told the paper, without confirming or denying that Merrill was moving most of its work.

Satyam shares were up 5.5 percent at 48.90 rupees ($1.01) in late morning trade on the Bombay stock exchange. TCS shares were flat at 510.80 rupees.

(Reporting by Janaki Krishnan; Editing by Ranjit Gangadharan and Muralikumar Anantharaman)

ę Reuters 2009
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ChangeLast1st jan.
TEAM, INC. -6.43% 0.6363 Delayed Quote.-41.62%
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