New Delhi - Tech Mahindra Ltd, the technology arm of India's Mahindra Group, successfully bid for controlling equity in defrauded information technology firm Satyam Computer Services Ltd, Satyam's board announced Monday.

   Tech Mahindra outbid engineering major Larsen and Toubro Ltd, which already owns 12 per cent equity in Satyam, and Nasdaq-listed technology company Cognizant, which was backed by US-based private equity investor Wilbur Ross, Satyam's board of directors announced at a press briefing in Mumbai.

   The board of directors, appointed by the government company owner Ramalinga Raju admitted to fraudulent accounting of 1 billion dollars in January, said the acceptance of Tech Mahindra's bid was subject to approval by India's Company Law Board.

   Tech Mahidra subsidiary Venturbay Consultants Private Limited offered 58 rupees per share (about 1.16 dollars) for controlling equity, against 45.90 rupees by Larsen and Toubro and 20 rupees by Cognizant-wilbur Ross, Satyam board member Kiran Karnik said.

   Shares of Tech Mahindra rose by over 13 per cent in afternoon trade to cross 40 rupees per share.

   The total valuation of 51 per cent controlling equity in Satyam at the rate of 58 rupees per share works out to 28.89 billion rupees (579 million dollars).

   Tech Mahindra has to buy a 31 per cent stake in Satyam through a new share issue and make an offer in the open market for an additional 20 per cent shares.

   "Once the CLB approval comes in and Tech Mahindra deposits the required amount in an escrow account, it will be given management control of the company," Karnik said.

   "The selection of the highest bidder, in a fair, open and transparent process signals a new stage for the company in its progress towards stabilization," Karnik said.

   Acquiring Satyam was a good opportunity for Tech Mahindra to expand its business, Karnik, a former head of NASSCOM, Indian IT industry's trade body, added.

   Satyam Computer is India's fourth-largest information technology services firm and operates in 66 countries. It has 48,000 employees and counts 185 Fortune 500 companies as its customers.

   A majority of clients had opted to stay with Satyam despite its problems and the bid offers indicated confidence in the company, Satyam board member Deepak Parekh, one of India's top bankers, said at the briefing.

   He said Tech Mahindra was expected to make a payment by April 21.

   Once the bid-winner takes control it would decide how to handle Satyam's affairs, Parekh said, adding that the only condition was that it cannot strip the company. "It cannot break up and sell the company," he said.

   The two Satyam campuses and real estate with the company in headquarters Hyderabad, capital of southern Andhra Pradesh state, was worth 15 to 20 billion rupees, the officials said.