Following the disclosure of fraud by Raju on January 7, Gupta said the share price of Satyam Computer on the bourses dropped from Rs 188 to Rs 30.70 before closing at Rs 38.40. "It (the share) has been traded at different prices since then," he added. The new board of Satyam, headed by former Nasscom president Kiran Karnik, is trying to ensure 'continuity of business and operations of the company in the interest of its stakeholders', the minister said.
After hearing a petition filed by Satyam on Wednesday, CLB ordered that the company could conduct an open transparent auction process for inducting a strategic investor.
While warning that many key clients and employees have threatened to quit the company due to its bad financial position, the government-appointed board of Satyam Computer also sought CLB's nod for allotment of preferential equity and increasing its authorised capital to Rs 120 crore (Rs 1.2 billion). The petition has been admitted by CLB, which would continue its hearing on Thursday.
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.
The government constituted board of scam-tainted Satyam Computer Services is looking at reducing the number of senior managers so as to ensure that the IT company is "as viable as possible" for a strategic investor.
Replying to supplementaries during Question Hour in the Rajya Sabha, corporate affairs minister Prem Chand Gupta said while the Serious Fraud Investigation Office under his ministry had been given three-months to wrap up its probe into the Satyam scam, no time-frame has been set for CBI.
National Australia Bank is one of the key customers Tech Mahindra executive vice-chairman Vineet Nayyar will be meeting next week. Nayyar will be in town to spread Satyam's new identity after it was renamed Mahindra Satyam, and try to regain its standing with the NAB and clients such as Qantas and Suncorp. Satyam continues to provide application development and IT maintenance services to the NAB.
While some industry observers said it's good for the company, others dismissed him as an interim arrangement before the government-appointed board finally sells out the company. In an email interview to Business Standard, A S Murty details his course of action.
This strategic move paves the way for the emergence of a robust brand, which draws from the core values of the Mahindra Group and the inherent strength of the Satyam brand. The logo will be adopted from the Mahindra Group, an official press note of the company said.
The company has a total of 34,000 employees globally.
A local court on Saturday extended the judicial custody of Ramalinga Raju, his brother and former managing director Rama Raju and former chief financial officer Vadlamani Srinivas till February 21.
The scam-tainted Satyam Computer Services appears to be gearing for action after almost a month of uncertainty.
The US Securities and Exchange Commission (SEC) team met the six-member government appointed board of the Satyam Computer Services here on Thursday.
Fresh suitors have emerged, and a cleanup is proceeding under a board appointed by the government. But the fraud leaves a cloud over Indian outsourcing.
The board meeting, which was expected to be held on February 5, was brought forward by a day. "Announcements relating to critical leadership appointments are expected to be made at the board meeting," the company's internal newsletter stated.
Under the takeover code, an investor who acquires 15 per cent of a company needs to make an open offer for another 20 per cent at a price which is not less than the average share price of the previous six months. This means a buyer of more than 15 per cent of Satyam will have to make an open offer at a price almost six times Monday's closing price of Rs 57.60.
Sends team to discuss share auction with Sebi today Satyam board to sell stake via auction.
The Hinduja Group chairman, who was in Davos to participate in the World Economic Forum, however, noted that the incident might not have much impact on the reputation of India Inc in the eyes of foreigners, who are more used to such scams. Raju's confession not only shocked India Inc, but investors all over the world. Such type of wrongdoings are more prevalent in the western world and foreigners are used to this kind of happenings, Hinduja said.
Since KPMG is not registered in India, it cannot undertake auditing work or restate accounts of beleaguered Satyam Computer Services, said Ved Jain, president of the Institute of Chartered Accounts of India.
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.
The government said on Wednesday that Satyam Computer Services' disgraced founder Ramalinga Raju created a network of about 300 companies and diverted funds from one company to another in a complex but carefully planned process. Speaking to Karan Thapar on the CNN-IBN news channel, Gupta said, "Our information is that there was a network of almost 300 compnaies and funds were diverted from one company to (another) and then to (a) third."
The New York Stock Exchange-listed Indian IT major Satyam Computer Services' founder and then-chairman Ramalinga Raju had shocked the world three weeks ago on January 7 with the disclosure of a massive financial wrongdoing to the tune of over a billion dollar at the company. This was followed by the NYSE suspending trading in Satyam shares the very same day.
DiPiazza's visit coincides with Price Waterhouse suspending two of its partners -- S Goplakrishnan and Srinivas Talluri -- who worked on the accounts of scam-hit Satyam Computer Services and were arrested last week.
Satyam's director Tarun Das had earlier said that the company had been approached by Indian and international IT companies and that the board would decide on it. Reports have suggested that engineering major L&T has expressed interest in acquiring Satyam, while Tech Mahindra is interested in the telecom business of the Satyam group.
The company aims to book a profit of over Rs 250 crore from the open market sale, said two sources familiar with the development.
BSE CEO M L Soneji said the exchange was investigating the trading data of Satyam. Highlighting lack of corporate governance, he said this was an opportunity to revisit regulations to make company directors more responsible and auditors more accountable.
In a sensational disclosure, a public prosecutor has told a local court in Hyderabad that the disgraced chairman of Satyam Computer Services B Ramalinga Raju had not only inflated the number of employees by thirteen thousand but also used the fictitious numbers to mint money.
The company, promoted by former Satyam Computer Services chairman B Ramalinga Raju's family, was originally required to announce its third-quarter results by the end of this month. Various agencies, including the state Criminal Investigation Department, have been probing the Maytas affair after B Ramalinga Raju admitted to serious financial fraud in Satyam.
The regulator's announcement on disclosure of pledged shares comes in the wake of the Satyam scam, wherein promoter Ramalinga Raju had pledged nearly all his shares -- whose prices he had inflated by falsifying profits. The details of disclosure, which should be made in two stages -- event-based and periodical -- will be notified shortly after amending the relevant regulations and listing agreements, Sebi chairman C B Bhave told reporters after the board meeting in Mumbai.
Indian IT majors like Tata Consultancy Services, Wipro and Satyam Computer Services -- which have running multi-million dollar deals with General Motors that has filed for bankruptcy -- are likely to face a short-term impact since any loss of business in these slowing economic conditions is a setback.
Engineering giant Larsen and Toubro, which acquired little over four per cent stake in Satyam in less than a month, is believed to have approached the government on Tuesday, evincing interest to buy the troubled IT company.
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
Upaid chairman and CEO Simon Simon Joyce told Business Standard, "Yes, Satyam has withdrawn the disparagement case and they have done so unilaterally. But I do not think that this will impact the primary case of fraud and forgery.
The board also confirmed that the search for the CEO and CFO continues and that till such time these appointments are concluded, it will continue to meet on a weekly basis, to address ongoing issues. The board members reiterated that they are in touch with key customers and so far have not heard of deliveries being affected in any way.
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.
The decision to withdraw from participating in the special purpose vehicle, being promoted by the Matyas Group, was taken by the MMTC board. MMTC was in the process of receiving shareholders' approval for investing Rs 85.85 crore and picking up up to a five per cent stake in the Maytas Group's SPV for the SEZ.
A day before the second meeting of the new Satyam Computer Services board, newly-appointed director Tarun Das said the priority of the six-member team would be to protect the interest of employees, customers and investors.
An Indian software engineer working with scam-hit Satyam Computer Services was shot dead by unidentified assailants in Arkansas in the United States.
As a fallout of the financial irregularities in Satyam Computer Services, a section of the United Progressive Alliance government is in favour of cancelling the award of the Hyderabad Metro Rail project. The project was won by the Nava Bharat-led consortium, in which Maytas Infra, a listed firm related to Satyam's promoters, is one of the partners.
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