With prominent Indian IT companies such as Tata Consultancy Services (TCS), Wipro, Infosys Technologies, Zensar Technologies and Satyam Computer Services increasing their presence in Japan, the world's second largest IT services market is becoming a lucrative market for India.
Within hours of Company Law Board orders, the government on Thursday appointed its nominees on the boards of Maytas Infra and Maytas Properties, the companies promoted by the kin of disgraced founder of the Satyam Computer Services B Ramalinga Raju.
Satyam Computer Services will scrap the variable pay policy and introduce a revenue-linked allowance from next month for a section of associates in a bid to minimise cost.
The bid-pack for potential investors is ready and the government-appointed board has already sent it to the Company Law Board and Securities Exchange Board of India, according to sources close to the development.
PriceWaterhouse (PW) has said that it resigned as statutory auditor of Satyam Computer Services with effect from February 12, 2009, while stating that it would co-operate with the ongoing investigations into the Rs 7,800-crore (Rs 78 billion) fraud at the IT major.
Scam-tainted Satyam Computer Services has lost its value with customers moving out of the company, according to Phaneesh Murthy, chief executive of the US-based iGate Corporation.
CBI on Wednesday announced that it will set up a multi-dimensional team to probe the 'unique' fraud, which involves Satyam founder B Ramalinga Raju and his family members. While the spokesman remained evasive to questions on when the cases would be registered, CBI sources said records and other materials associated with the probe was being taken over by the agency.
The board of directors of the company at its meeting on Monday day have approved the issue of 1.36 crore shares by way of private placement or Qualified Institutional Placement basis, Tech Mahindra said in a filing to the Bombay Stock Exchange.
Earlier, the Sebi had interrogated and recorded the statement of Raju and his brother and Rama Raju for three days from February 4 in Chanchalguda Jail. In a petition filed in the court of 6th Additional Chief Metropolitan Magistrate, the I-T department sought three days time to examine and record the statement of Raju.
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.
The boards of Mahindra Satyam and Tech Mahindra last year proposed a swap ratio of 2:17. Mahindra Satyam shareholders will get two shares of Tech Mahindra of Rs 10 each for every 17 shares they hold.
Says Satyam is not a commodity. B K Modi of Spice had earlier pushed for e-auction, for its transparency.
Amid a crowd of suitors lining up for acquiring Satyam Computer Services, the board of the beleaguered IT firm started its meeting on Wednesday.
The board has the power to appoint a professional even without a formal application if found apt for the job, the source told PTI.
The board has approved the allotment of the shares, under the employee stock options plans of the company, Satyam said in a filing to the Bombay Stock Exchange. After the allotment, the paid-up share capital of the company stood at Rs 195,35,94,874 up from Rs 195,34,44,694, the filing added.
The company had a net profit of Rs 4 crore (Rs 40 million) in January this year, Satyam said in a regulatory filing to the stock exchanges. The total income in February stood at Rs 637 crore (Rs 6.37 billion) while in January it was at Rs 647 crore (Rs 6.47 billion).
Following the order, Raju and others are likely to move the high court.
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.
Speaking to private TV news channel CNBC TV18, Naik said, "Some corporate action will take place in the near future but we cannot comment on taking over Satyam at this stage."
In a filing to the Bombay Stock Exchange, Satyam Computer said the last date by which letter of offer will be dispatched to the shareholders has been revised to June nine, from the earlier scheduled date of June three. Further, the last date of withdrawal by shareholders has also been revised to June 26, from the earlier June 27.
A slowdown in the global economy and sub-prime crisis in the banking, financial and insurance services sector, its major revenue earners, force the domestic IT industry to take a relook at its hiring strategy.
In an interview, author and columnist Steve Hamm shared his thoughts on the Satyam episode, World Bank ban on Wipro et al.
"We were not given to understand by any party, explicitly or implicitly, during the valuation exercise about Satyam's plans to acquire Maytas Properties," an Ernst & Young spokesperson informed Business Standard by e-mail.
Maytas Infra was entrusted with the task of constructing a township colony at Rs 233 crore (Rs 2.33 billion) in Jharsuguda following a contract in March 2008, a Vedanta official told PTI.
If extra tax has been paid on inflated income, only a 'bona fide mistake' will get refund.
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.
Talks of a possible merger or takeover will not have credence for a while
T R Prasad, former cabinet secretary and ex-independent director of scandal-hit Satyam Computer Services on Wednesday said, he is in Delhi at present and is ready for interrogation by any investigative agency.
Scandal-hit Satyam Computer Services is likely to abandon its proposed IT park project in Gandhinagar in view of the multi-crore fraud in the Hyderabad-based software firm, Gujarat government officials said on Friday.
Though it's over 24 hours since the founder-chairman of Satyam Computer Services, B Ramlinga Raju, resigned after making shocking revelations, its employees (known as associates) are yet to come to terms with the reality.
Mendu Rammohan Rao, dean of the Indian School of Business (ISB) and an independent director on the board of Satyam Computer Services till recently, has quit the prestigious B-school, according to reports.
The official said that L&T did not jack up its stake in Satyam in recent times and the stake the group owns was acquired in phases from the secondary market. Speculations were rife that the engineering major might look at acquiring Satyam in order to strengthen its presence in the information and technology arena where it has presence through L&T Infotech, a wholly-owned subsidiary of the group.
Ruling out a government takeover of Satyam Computer Services, Commerce and Industry Minister Kamal Nath on said it is corporate India that must respond to the issue of governing business firms.
Satyam Computer Services, in the eye of a storm for financial wrong doings, will be stripped off the Golden Peacock Award -- the very laurel it used for trumpeting its corporate governance norms when the controversy broke out.
Satyam Computer Services Ltd said it will provide consulting services to Texas InstrumentsÂ’ incorporated digital signal processor customers.
ADAG, Mahindra BT, L&T Infotech may team up with PEs.
Upaid has filed for damages exceeding $1 billion on charges of forgery, fraud and breach of contracts. The cases have been filed in a federal court and a state court in Texas, USA. The legal teams of UK-based Upaid and Satyam Computer Services are holding talks for an out-of-court settlement of a case filed by the UK-based mobile payment services firm. The hearing of the case is on June 1.
If it is true that the company pursues wrong business practices, and violates ethical codes, then the only thing that will save the company is a thorough spring-cleaning -- which perhaps can be done only by a completely new management committed to the kind of ethical business practices emphasised in the same field of activity by companies like Wipro and Infosys.
Though the controversial Satyam-Maytas deal has been called off, regaining investor confidence will be an uphill task.
Indian IT firms have started mining smaller clients with more fervour given that the revenue accruring from their top clients has been declining due to the US slowdown and the sub-prime crisis. Consider this. Revenue accruing from the top clients of the five leading IT firms by revenue - Tata Consultancy Services, Infosys Technologies, Wipro Technologies, Satyam Computer Services and HCL Technologies - dropped by anywhere between 0.2 per cent and 4 per cent
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