In this extract from The Satyam Saga, Business Standard looks into the origins of EMRI, the allies Raju assembled and the roots of his philanthropic works -- as well as the problems that quickly grew to endanger his vision.
Upon delisting from Euronext Amsterdam, the company's equity shares are expected to remain listed and continue to be traded on the Bombay Stock Exchange and the National Stock Exchange of India and its ADS are expected to continue being traded on the New York Stock Exchange in New York. The company does not intend to delist from the BSE, the NSE or the NYSE.
Cisco and Satyam had entered into a joint venture in 2007 to focus on healthcare management solutions. As a part of this announcement, Cisco had also lined up an additional investment of $100 million, targeting innovation.
Judge T Rajani issued the summons to Ram Mynampati as he failed to appear before the court despite being asked thrice by it in connection with the case filed by Serious Fraud Investigation Office.
The housing finance regulator National Housing Bank on Thursday said it was collecting information from housing finance companies about their exposure in group entities of the scam-tainted Satyam Computer Services.
The company would hold a press conference in Hyderabad on Thursday to outline an action plan to address key concerns of various stakeholders, including customers, investors, employees and business partners.
With cost-cutting and workforce rationalisation top on the agenda, the board of the embattled Satyam Computer met on Thursday to discuss the future course for the firm.
There will be no retrenchment in Satyam, up to 10,000 employees to be put into virtual pool, Tech Mahindra CEO Vineet Nayyar said.
The Satyam board may present prospective bidders for the troubled Satyam Computer Services with operating statements for two quarters - October-December 2008 and January-March 2009 - to help them arrive at a decision.
Meanwhile, the company lost 66 clients, worth $183 million (around Rs 900 crore) in the same period -- either because contracts were terminated, or they expired, or were withdrawn. About 23 customers terminated contracts accounting for $70 million as on March 26, 2009.
The Satyam Computer Services board is expected to induct former managing director of Tata Chemicals Homi R Khusrokhan on the company's board of directors as Executive Director and former chief financial officer of Murugappa group Partho S Datta as Director (Finance).
Satyam Computer Services on Friday said it would invest $75 million in 2006-07 to augment its infrastructure and was looking at a location in the National Capital Region to set up a new development centre.\n\n
According to Sud, MYNL had sold most of its holding in Satyam immediately after the IT major made an aborted bid to acquire Maytas Infra and Maytas Properties for $1.6 billion on December 16, 2008. MYNL still holds 6,000 equity shares of Satyam.
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 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 government's help to the crisis-ridden Satyam Computer Services may include financial support as well, as it is a question of saving jobs and institutional investment, Commerce and Industry Minister Kamal Nath said.
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.
They will take stock of the current situation and discuss the way forward. Handing over the share allotment documents to Tech Mahindra is also on the agenda of Monday's board meet, according to a Satyam spokesperson. Tech Mahindra Vice-Chairman, MD & CEO Vineet Nayyar, C P Gurnani, president (international operations), and President (strategic initiatives) Sanjay Kalra have confirmed their participation in the meet.
Even as the buzz around Vivel Paul's candidature as CEO is still doing the rounds at Satyam Computer Services, insiders say the government is considering a person who was an integral part of the company till three months ago.
Upaid claimed it had served requests for production of documents related to the 'now scuttled Maytas transfers on Satyam' on Friday, but now had to submit this motion to the court 'because Satyam had repeatedly resisted its efforts to depose Raju and Vadlamani in the case.' The current motion is in reply to a disparagement case that Satyam had filed against Upaid wherein the former had claimed that the payment services firm has been disparaging them in the public domain.
The government, on January 13, had initiated an SFIO probe into various corporate aspects of the fraud under Section 235 of the Companies Act after getting a report from the registrar of companies, Andhra Pradesh. "The report was submitted to the government on Monday night," said a senior corporate affairs ministry official who declined to reveal the contents of the report.
Ram Myanampati, the interim chief executive officer of beleaguered Satyam Computer Services, on Thursday admitted that he himself is on a shaky ground.
Australian telecom giant Telstra has reportedly dropped outsourcing partner Satyam Computer Services from an applications support contract worth Aus $32 million annually.
Later Mahindra Satyam said its board of directors has allotted 19.86 crore additional shares to Venturebay, which would take Tech Mahindra's stake to approximately 43 per cent of the outstanding share capital. A Tech Mahindra spokesperson said after the preferential allotment Venturebay's stake in Mahindra Satyam would be 42.7 per cent.
On one hand, they feel the sale will help in restore the firm's past glory. On the other, they fear that life would be tougher in the new company. Notwithstanding management assurances that existing staff won't be retrenched after the takeover, several employees are understood to be hunting for openings elsewhere.
Kicking off the formal process for inducting a strategic investor, the Satyam board on Saturday approved the procedure to invite offers from likely suitors.
Hinduja Global Solutions, the BPO arm of the Hinduja group -- one of the interested parties in acquiring the scam-tainted Satyam Computer Services -- said it has chalked out a 100-day plan, just in case it is successful in its attempt. Meanwhile, it has written to the merchant bankers involved in the transaction. "We are very interested in Satyam and accordingly, we have written to the merchant bankers but are yet to receive any reply," said Anand Vohra, CFO.
This was decided in the business advisory committee meeting, where the leaders of various political parties agreed for a discussion on the fraud. The short duration discussion in the Lok Sabha was listed for February 13 but was deferred following a request from leader of the Opposition L K Advani.
Some employees have alleged that close to 20 employees of the troubled Satyam Computer Services have been promoted to the I-1 and I-2 bands (representing assistant vice-president and vice-president levels) and also received a salary hike of 20-40 per cent. The timing has caused much resentment with some employees taking up the matter with the human resources department.
Top Satyam executives accelerated sales of their shares in the company in close to three months before the company's aborted December 16 bid to buy two developers controlled by Ramalinga Raju's family.
Satyam Venture Engineering Services Pvt Ltd, the engineering services group of Satyam Computer Services Ltd, has set up a dedicated India design centre for the United States-based automotive tier-I supplier Collins & Alkman.
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.
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.
Satyam Computer's potential suitor may get to control the IT company at an affordable price, with market regulator Sebi on Monday saying it would amend regulations governing open offer to ensure transparent pricing.
Wanting to give a clear message to the corporate world that the government means serious business, Corporate Affairs Minister Salman Khursheed said that day-to-day trial in the multi-crore rupee Satyam scam would be the top-most priority, for which his ministry is also talking to Central Bureau of Investigation.
Larsen & Toubro, India's largest engineering company, has sought permission from the market regulator to sell its 6.9 per cent stake in Mahindra Satyam, which is currently valued at around Rs 900 crore.
The company aims to book a profit of over Rs 250 crore from the open market sale, said two sources familiar with the development.
'It is revealed that an amount of Rs 1,425 crore out of Rs 1,744 crore loan obtained from NBFCs was transferred to the bank accounts of SCSL by 37 companies as loan over a period ranging from November 17, 2006 to October 30, 2008 to meet the expenses of the Satyam Computer Services Limited. Out of this amount, Rs 194 crore was returned by SCSL during October and November 2008 to 15 out of the 37 companies,' the CBI said in its chargesheet.
Sources said that Essar group firm Aegis BPO submitted the EoI recently as the Essar group is trying to expand its BPO business. Both Aegis and Satyam BPO work with companies in telecom, banking, finance and insurance. Satyam BPO's biggest international clients reportedly include BellSouth, Verizon and GlaxoSmithKline
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