Spice quits Satyam race

28 Mar 2009

NEW DELHI: Alleging "lack of transparency and openness" in the Satyam stake sale process, BK Modi's Spice Group withdrew from the race on Friday, protesting the manner in which the government-appointed board was conducting the exercise to find a buyer for the scam-hit company.

"There is no transparency and openness in the entire process. It is opaque and against the directive of the Company Law Board that ordered for an open, transparent, competitive price bid auction process," Preeti Malhotra, executive director of Spice Innovative Technologies, told TOI here.

Spice had tried to put forth its case before the Satyam board over the last few days, but was not satisfied by the response of the company. "We were among the shortlisted few and satisfied all the conditions set forth. But now there is talk of a new round of shortlisting as well as closed financial bidding. This is not acceptable," Malhotra said.

Spice wants that the Satyam board to make public the names of all those in fray. "We have a right to know who the other bidders are and who are we competing against. This would have also helped drive up the value of Satyam," Malhotra said.

The company has sent a letter to this effect to the Satyam board as well as former Chief Justice SP Bharucha, who is supervising the bid process. However, it has still kept a door open for re-entry into the process. "If the Satyam board is ready to offer an open, transparent price bid auction process, we are ready to come on board," she said.

Asked if Spice was looking to take legal action against the process, she said there were no such plans. "We do not want to stall the process as it will not be good for Satyam," Malhotra said.

When contacted, a spokesperson for Satyam refused comment. "We do not comment on the bid process. It is confidential," is all that the spokesperson said.

Spice is the third suitor which has walked out of the bid process after Hinduja group and iGate. The withdrawals are expected to take the heat out of the bidding for the company as it may now not be a keenly-fought affair. It is learnt that IBM has also pulled out of the race. Those still in reckoning include Larsen & Toubro and Tech Mahindra. Satyam had earlier said among the interested are international bidders, including private equity firms.

Unperturbed by the developments, the new board of Satyam hopes to finalise the buyer of a 51% stake in Satyam by April 30. And while making it clear that re-statement of accounts may not be possible before the bidding, the company has said selected bidders would be invited for due diligence by getting access to data containing "certain non-public information", while the management would provide an overview of operations and strategy.