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Satyam tries to win back investor confidence

January 05, 2009 19:03 IST

To win back dented investor confidence, caused due to the Maytas fiasco, Satyam Computer on Monday cited a Forrester report nearly a month old praising its (Satyam's) innovative approach, even as the research firm last week warned on the IT major's 'diversification failure'.

In a filing to the stock exchanges, Satyam said that the technology research firm had in its December 18, 2008, report asked organisations to adopt the software major's innovative business strategies.

However, the latest Forrester report on December 31, said that its software business associates need to review dependence on Satyam Computer to safeguard themselves in case the IT major is sold.

Commenting on the company's 'diversification failure' in relation to its aborted acquisition of two companies promoted by the family of Chairman B Ramalinga Raju, analysts at Forrester in its latest report had said: "[M]anagement and governance miscues could have a long-term impact."

"Sourcing and vendor management executives would need to review their dependence on Satyam and ensure that they have strong contingency plans and change of ownership clauses in the event that Satyam is acquired or the fallout from this serious misstep affects the firm's ability to compete long term," Forrester had said.

However, according to the stock exchange filing by Satyam on Monday, the December 18, 2008, report -- 'Satyam Ignites Innovation from the Bottom Up' -- Forrester had asked organisations to 'emulate Satyam by unleashing and harnessing their firm's grassroots creative energy'.

Meanwhile, Forrester said it had not taken into consideration Satyam's aborted Maytas deal and its after-effects, while preparing the first report.

The announcement by Forrester comes in the wake of the share price hammering witnessed by Satyam after it announced plans to acquire two companies -- Maytas Infra and Maytas Properties promoted by the family of Satyam chief B Ramalinga Raju last month for $1.6 billion and then aborted it following protests from promoters.

The stock, which saw some upturn last week after an over 50 per cent fall in two weeks, plunged 9.03 per cent again on Monday.

"Earlier in December, Satyam's management team made a major miscalculation that will likely haunt the company for years.

The firm announced and then quickly cancelled after a shareholder revolt plans to diversify its business," an analyst with Forrester had said.

The scrip, which had dipped to its 52-week low level of Rs 114.65 on December 24, had recovered last week amid speculations that the company is becoming a ripe target for takeover as valuations are turning attractive.

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