The board also will decide on the funding arrangements to ensure scheduled payments, including salaries and vendor fees, for the next two months, till the end of March 2009. The board said in a release last Friday it had short-listed three candidates for the post of CEO and it expected to take a final look at it at the next meeting, which is on Tuesday.
Four nominee directors of Tech Mahindra, including its chief executive officer Vineet Nayyar, on Wednesday joined the board of the embattled IT firm Satyam Computer.
The two firms, however, cannot be termed as auditors of Satyam as the appointment of an auditor can be done only after securing the company's shareholders' consent. Sleuths investigating the Satyam fiasco on Tuesday conducted raids at the Hyderabad office of PriceWaterhouseCoopers, Satyam's auditing firm, and are understood to have recovered several crucial documents.
The US Securities and Exchange Commission (SEC) team met the six-member government appointed board of the Satyam Computer Services here on Thursday.
The board, whose size was doubled with the induction of three members on Thursday, is likely to elect a new chairman to steer the company out of the financial mess that its founder Ramalinga Raju led it into.
The government does not see any conflict of interest in HDFC chairman Deepak Parekh and former Nasscom President Kiran Karnik, who are directors on the board of Satyam's competitors, being on the troubled company's board.
Satyam Computer moved a step closer towards finalising bids for selling a majority stake in the trouble-torn IT company with the board meeting investment bankers on Thursday.
The board will make the financial and legal data available to those shortlisted companies who will qualify in the EoI criteria.
The board has the power to appoint a professional even without a formal application if found apt for the job, the source told PTI.
Paving the way for takeover of crisis-ridden Satyam by Tech Mahindra, the Company Law Board allowed the new owners to appoint Vineet Nayyar, C P Gurnani, Sanjay Kalra and Ulhas N Yargon on the board.
Satyam's newly-appointed CEO A S Murty has received a thumbs up from the company's board, which is "very happy" with the way he has shaped up so far in dealing with the evolving situation in the firm.
The source, however, did not reveal the names of the companies, which have submitted EoIs, but it could be engineering major Larsen & Toubro, Mahindra Group, Hindujas, Spice and i-Gate, among others. Meanwhile, three PSBs have given in-principle nod to Satyam to provide short-term loans for meeting salary, working capital, payment of arrears to vendors, provident fund dues, TDS and rentals charges.
The team will then proceed for discussions with the government-appointed Board of Satyam Computer Services in Hyderabad on Thursday to assess the present status of India's fourth- largest software firm. Following the confessions of Satyam's founder and former chairman B Ramalinga Raju that he had cooked up the firm's balance-sheet for several years, US investors have filed over a dozen law suits against the company in various US courts.
Amid a crowd of suitors lining up for acquiring Satyam Computer Services, the board of the beleaguered IT firm started its meeting on Wednesday.
Satyam Computer Services founder B Ramalinga Raju had made trips to the Indian School of Business in Hyderabad, to Visakhapatnam and even the United States, to convince the independent directors on the his board for acquisition of Maytas Infra and Maytas Properties, the two companies promoted by his family members.
An independent director on Satyam Computer's board is understood to have resigned days ahead of a scheduled meeting next week.
These include B K Modi's Spice, Larsen & Toubro and Tech Mahindra. iGate, which had participated in the first round of bidding, backed out from completing the second round. Global majors like IBM are understood to have entered the second round, but this could not be independently confirmed. Other names floating include that of Hewlett-Packard and KKR Private Equity Investors.
Sources said, though the board did not meet officially on Monday, the members were engaged with some of the prospective lenders to overcome the financial problems.
During the course of the meeting last month, Satyam's then chief financial officer Vadlamani Srinivas informed the board that the valuation of Maytas Properties was done by Ernst & Young, but the global accounting firm disputed the claim. According to the minutes, members noted the imperative of infrastructure foray, particularly based on leveraging on the brand of Satyam to become an eminent player in infrastructure as well.
Satyam's short-term requirements include funds for paying salaries to employees in India and abroad, rentals, arrears to vendors and provident fund dues. The Hyderabad IT-major has already secured loans worth Rs 600 crore from IDBI Bank and Bank of Baroda. It is now understood to have plans to seek more loans from other state-owned banks as well.
The government-appointed board of Satyam Computer Services will meet on Friday to scrutinise the bids for a 51 per cent stake in the company and decide a schedule for completing the selection process.
Moving quickly to stabilise the fraud-devastated Satyam Computer, the government on Sunday nominated noted banker Deepak Parekh, IT expert Kiran Karnik and former Sebi member C Achuthan to the infotech company's board.
The complainant, C Anthony Lewis, has said that he had bought 500 shares of Satyam about three weeks prior to Raju admitting to manipulation in the company's accounts for showing higher profits, following which Satyam's share value dropped drastically.
The Board of Mahindra Satyam will meet on July 10 to clear the proposal of Tech Mahindra seeking a second round of preferential share allotment to hike its stake in the newly acquired company to about 43 per cent after an open offer evoked a weak response.
While the board had 'unanimously' passed the resolution for the $1.6 billion acquisition of two Maytas firms, run by Satyam founder Ramalinga Raju's family, many of the five independent directors raised concerns over the deal. The concerns related to the valuation, actual benefits to the shareholders being a related party transaction and assurance about board being used as a 'rubber stamp' and the company moving away from core business of IT.
The decision of Satyam Computer Services to give itself time to consider a series of options to shore up investor confidence, including steps to strengthen governance, has come as a welcome surprise to institutional investors in the company.
The three-member board of Satyam Computer Services outlined a formidable agenda that includes seeking a bailout, changes in the top management and asking clients to accelerate payments to overcome a cash crunch.
The meetings with Singh and Ahluwalia have taken place just two days before the announcement of the results of the general elections for the 15th Lok Sabha. Besides Karnik, the other nominees on the Satyam board are HDFC chairman Deepak Parekh, former ICAI chairman T M Manoharan, CII chief mentor Tarun Das, LIC executive S B Mainak and former presiding officer of Securities and Appellate Tribunal C Achuthan.
The board of Satyam will meet for two days from Monday to finalise the twin issues of appointing CEO and CFO and working capital arrangement, and may discuss L&T increasing stake in the company to 12 per cent.
The government is likely to appoint more directors on the board of the crisis-ridden Satyam Computer Services soon. "More directors will be appointed within two days," a senior official of the Ministry of Corporate Affairs said.
A source close to the development pointed out that, with the newly-appointed Minister of Corporate Affairs Salman Khurshid publicly stating that Tech Mahindra would have to deal with the excess employee issue with 'sensitivity', this is one point that will surely be discussed.
The company's move to mollify shareholders comes after it raised investor ire on its proposed $1.6-billion acquisition deal, which had to be called off. After suffering a severe battering on Wednesday, Satyam shares surged 13.88 per cent to an intra-day high of Rs 180 on Thursday on the Bombay Stock Exchange.
Leading accounting firm KPMG on Friday said the existing management of beleaguered Satyam Computer Services should go and the government take control of the company board to save the image of India Inc.
The government on Wednesday said there would not be any delay in constituting the new board of Satyam Computer and exuded confidence that the incoming management would retain the existing staff.
At least seven companies, including Larsen & Toubro, i-Gate, Spice and Mahindra Group, have already submitted proposals to the board last week and the bids to be accepted till March 20. The board has already said that it has received adequate interest from both Indian and international bidders, including private equity firms.
Terming the newly constituted board of Satyam Computer as "able", former Sebi chairman M Damodaran today expressed the confidence that the new leadership will chalk out ways to tide over the crisis.
Satyam's expanded board will meet on Saturday with the focus on raising funds to keep the business alive and may also have to deal with complaints on its choice of auditor to restate the company's financials.
Satyam has initiated discussion with a host of banks and institutional investors to get funds to keep its business afloat and has pledged some of its receivables to secure funding, Parekh told reporters in Mumbai on Wednesday. Satyam's new board will meet on Thursday and the day after to discuss issues including appointments of top executives and ways to raise funds, Parekh said.
The board had earlier said that the bidder will be announced on April 9.
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