Former SC chief justice to guide Satyam board on strategic investor

13 Mar 2009,

HYDERABAD: Former Supreme Court chief justice S P Bharucha will guide the Satyam Computer Services board in selecting the strategic investor from the Indian and overseas bidders, the scam-hit company said on Friday.

"Justice Bharucha has agreed to oversee and guide the board in selecting the strategic investor," the IT bellwether said in a statement after the board met here to discuss the expressions of interest (EoI), submitted by four bidders till Thursday.

The four bidders, which have shown interest in buying 51 percent majority stake in the software firm, are infrastructure major Larson and Toubro (L&T), Mahindra Group's IT arm Tech Mahindra, B.K. Modi-controlled Spice Corp and iGATE Corp, headed by former Infosys sales and marketing head Phaneesh Murthy.

L&T holds 12 percent of the company's equity.

The board has decided to release the request for proposals (RFP) to the bidders.

"The response so far has been adequate from Indian and international bidders, including private equity (PE) firms," the statement noted.

Under the procedure, the bidders are required to submit their EoI along with proof of funds of Rs.15 billion (Rs.1,500 crore/$290 million) by March 20.

The bidders will have access to the company's data and information to enable them to submit technical and financial bids.

Satyam chief executive A.S. Murty briefed the board on his recent visit to Singapore and Australia to meet clients and employees. He is scheduled to visit the US on a similar trip.

The software major has been mired in a controversy for the Rs.78-billion (Rs.7,800-crore) accounting fraud its founder B. Ramalinga Raju publicly admitted.

Raju Jan 7 confessed that he had cooked the company's account books and inflated profits over the past several years.

Satyam March 9 invited registrations to start the selling process by way of a global auction after market regulator Securities and Exchange Board of India (SEBI) gave it the go-ahead March 6 to do so.

The government-nominated board will select the successful bidder after evaluating the bids and the successful bidder will be given four days to deposit with the company the entire subscription amount and the requisite funds for the public offer in an escrow account.

The strategic investor will also have to make a mandatory open public offer to purchase a minimum of 20 percent of the company's share capital, as per the relaxed takeover norms prescribed by SEBI.