New Delhi, April 16: The Company Law Board (CLB) today cleared the decks for Tech Mahindra to acquire a 31 per cent stake in fraud-hit Satyam Computer Services.

“Having convinced myself that the board of directors has selected a technically and financially competent strategic investor, I accept the recommendation,” said CLB chairman S. Balasubramanian.

Mid-sized outsourcing firm Tech Mahindra outbid engineering major Larsen & Toubro and US billionaire Wilbur Ross with its offer of Rs 58 a share for a controlling stake in Satyam.

Tech Mahindra’s subsidiary Venturbay Consultants — the special purpose vehicle floated for the buyout — will have to deposit Rs 1,756 crore in an escrow account by April 21, giving it the preferential shares for a 31 per cent stake in Satyam.

It will also make an open offer for another 20 per cent stake. The total deal is around Rs 2,889 crore.

“On depositing the amount, the Satyam board will be authorised to issue and allot 30,27,64,327 equity shares of Rs 10 each at a premium of Rs 48 per share to Venturbay,” said Balasubramanian.

There would be a lock-in period of three years for the shares.

The CLB also allowed Tech Mahindra to appoint a maximum of four directors on the Satyam board after depositing the funds for the stake purchase.

The present six directors of Satyam appointed by the government will continue till further orders.

The CLB dismissed apprehensions about a lack of transparency in the bidding process through which Satyam selected Tech Mahindra.

“I have perused all the documents connected with the bid process. Justice Bharucha, a former Chief Justice of India, who has seen the process of selection of a strategic investor, has given in writing that the process of selection was fair, transparent and open as required,” said Balasubramanian.

The CLB extended the deadline for declaring Satyam’s quarterly results till December 2009.

Also, there would be no sale of any material asset of Venturbay and Satyam as an enterprise for a period of two years from the date of completion of the public offer.