29 Apr 2009,
HYDERABAD: The board of cash-strapped Maytas Infra, promoted by disgraced founder of Satyam Computer Services B. Ramalinga Raju and his family, Wednesday approved a draft corporate debt restructuring (CDR) package and recast the management by appointing two presidents.
The two-day meeting of the board, chaired by K. Ramalingam, approved the draft CDR package, and is considering appointment of State Bank of India (SBI) Capital Markets for the purpose.
A representative from the SBI, a large lender to company, is already on the project management committee formed by the board recently to oversee the execution of pending contracts. Ravi Parthasarathy, chairman of Infrastructure Leasing and Financial Services, which has 14.5 percent stake in the firm, is also on the committee.
The CDR package is aimed at saving the firm from bankruptcy by reorganizing outstanding dues to financial institutions. The firm is also trying for fresh infusion of funds to complete ongoing projects.
A company statement issued at the end of the meeting said the board reposed full confidence in the revival plan and restructuring of Maytas Infra. The revival plan also has the support of the central government, it said.
"The board carefully analysed the financial position, current order book, cash flow, HR and other issues related with the restructuring of the company," the statement said.
The six-member board, including four government-appointed members, also appointed two presidents - C.S. Bansal and Rajendra Nimje.
The board, however, took no decision on appointing a new chief executive officer to replace Teja Raju, the son of Ramalinga Raju, who is now the acting CEO.
Ramalingam also met Andhra Pradesh Chief Secretary Ramakanth Reddy and apprised him of the company's business plans.
The meeting was significant as Maytas last month sought more time for achieving the financial closure for the proposed Rs.122-billion Hyderabad Metro Rail Project.
The mega project is among several that are in the limbo after the company plunged into a crisis following Ramalinga Raju's admitting to committing a Rs.78-billion accounting fraud in Satyam.
The confession followed his botched attempt to acquire Maytas Infra and Maytas Properties for Rs.80 billion last December.
The allegations that Raju diverted part of the scam money into his family firms created more problems for Maytas as it lost some projects in other states.
Wednesday, April 29, 2009
Raju beat regular system in Satyam to generate fake bills: CBI
New Delhi, Apr 27 (PTI) The CBI has found that officials at Satyam Computer have bypassed regular system of creating invoices to generate fake bills, which were later used to show inflated revenues worth Rs 4,500 crore.
"The invoices were generally created using a series of software applications meant for creating and maintaining the projects, generating project IDs, software 'Ontime' for calculating hours put in by an employee," a CBI spokesperson said in a release here.
The bills were generated on Project Bill Management System (PBMS) of the company using data received from the 'Ontime' and rates agreed upon with the customer. Based on the billing advise generated by PBMS, the Invoice Management System (IMS) generated the invoices, he said.
"In order to handle any emergency needs, Satyam Computer had another method through which invoices were directly generated in the IMS by porting the date directly into the system bypassing the regular application flow," the spokesperson said.
The agency found that in order to perpetrate this fraud, the accused had allegedly planted a surreptitious programme in the source code of the IMS creating a user id 'Super User' with the power to hide or unhide the invoices in the system, the official said. PTI
"The invoices were generally created using a series of software applications meant for creating and maintaining the projects, generating project IDs, software 'Ontime' for calculating hours put in by an employee," a CBI spokesperson said in a release here.
The bills were generated on Project Bill Management System (PBMS) of the company using data received from the 'Ontime' and rates agreed upon with the customer. Based on the billing advise generated by PBMS, the Invoice Management System (IMS) generated the invoices, he said.
"In order to handle any emergency needs, Satyam Computer had another method through which invoices were directly generated in the IMS by porting the date directly into the system bypassing the regular application flow," the spokesperson said.
The agency found that in order to perpetrate this fraud, the accused had allegedly planted a surreptitious programme in the source code of the IMS creating a user id 'Super User' with the power to hide or unhide the invoices in the system, the official said. PTI
Satyam inflated sales by Rs 47.46 billion, says CBI
28 Apr 2009,
NEW DELHI: The Central Bureau of Investigation (CBI) has said that the fraud-hit Satyam Computer Services inflated sales by Rs 47.46 billion.
The CBI said that with the help of cyber forensic techniques, it was able to decipher modus operandi of Satyam corporate fraud.
"It happened like this-the accused were hiding some of the invoices that was generated through Excel porting. As a result, the concerned business circles were not aware that such invoices are existing. These invoices were not dispatched to the customers even. In fact these false invoices were generated for purpose of inflating the sales and thus inflating the revenue of the company. As a result of further investigation, individuals who generated and hidden these false invoices have been identified," said Harsh Bahl, a CBI spokesman.
The bail application of former chairman of Satyam, Ramalinga Raju and others was dismissed by the trial court on April 25.
In early January, Ramalinga Raju shocked investors by saying profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter. The government quickly stepped in and sacked the board to limit damage to India's once-shining IT sector.
Satyam, which counts Citigroup Inc, Cisco Systems Inc. and General Electric among its clients, has not reported results since releasing its July-September figures in October.
Its accounts are in the process of being reconciled and restated.
NEW DELHI: The Central Bureau of Investigation (CBI) has said that the fraud-hit Satyam Computer Services inflated sales by Rs 47.46 billion.
The CBI said that with the help of cyber forensic techniques, it was able to decipher modus operandi of Satyam corporate fraud.
"It happened like this-the accused were hiding some of the invoices that was generated through Excel porting. As a result, the concerned business circles were not aware that such invoices are existing. These invoices were not dispatched to the customers even. In fact these false invoices were generated for purpose of inflating the sales and thus inflating the revenue of the company. As a result of further investigation, individuals who generated and hidden these false invoices have been identified," said Harsh Bahl, a CBI spokesman.
The bail application of former chairman of Satyam, Ramalinga Raju and others was dismissed by the trial court on April 25.
In early January, Ramalinga Raju shocked investors by saying profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter. The government quickly stepped in and sacked the board to limit damage to India's once-shining IT sector.
Satyam, which counts Citigroup Inc, Cisco Systems Inc. and General Electric among its clients, has not reported results since releasing its July-September figures in October.
Its accounts are in the process of being reconciled and restated.
Satyam’s accounting system was manipulated: CBI
28 Apr 2009, ET Bureau
NEW DELHI: The CBI has finalised investigations into falsification of accounts and forgery of documents in the Satyam fraud case and found that the accounting system was manipulated to inflate the company’s sales by Rs 5,117 crores.
Using cyber forensic techniques, the investigating agency said it had uncovered the modus operandi used by the accused to show inflated sales by Satyam Computers Service.
According to the CBI, officials at Satyam created a protocol to manipulate software computing man hours spent on client projects in order to show inflated sales by Satyam to the tune of Rs 4,746 crores. Through this protocol, the CBI said, the accused bypassed the regular system and created false invoices that were shown only to the company’s finance department and not clients. However, the CBI investigations till now only pertains to misdeeds owned up by accused Ramalinga Raju and throws no light on the alleged diversion of funds.
“Investigation further revealed that these invoices were generated for the purpose of inflating the sales and the amounts pertaining to these false and fabricated invoices were shown as receivables in the books of accounts of M/s SCSL thereby dishonestly inflating the revenues of the company,’’ a CBI spokesperson said in a release here. The CBI found 7,561 fake invoices worth Rs 5,117 crores in the course of the investigations . Out of these 7,561 invoices, the CBI said, the accused entered 6,603 of these false invoices amounting to Rs 4,746 crores into the books of accounts.
The investigating agency further said that it had identified the individuals who had generated and hidden these false and fabricated invoices and also identified the computer server where incriminating electronic records were stored. CBI said that the incriminating data had been retrieved and that the agency had also got opinions from computer forensic experts.
“As a result of this detection, the actual modus operandi as well as the individuals who have perpetrated the fraud have been identified which resulted in unearthing the whole fraud and helped in finalisation of the investigation,” CBI said. Meanwhile, a trial court on Saturday also dismissed the bails application of accused B Ramalinga Raju, B Ramaraju and V Srinivas. Apart from these three accused, five others are in custody.
NEW DELHI: The CBI has finalised investigations into falsification of accounts and forgery of documents in the Satyam fraud case and found that the accounting system was manipulated to inflate the company’s sales by Rs 5,117 crores.
Using cyber forensic techniques, the investigating agency said it had uncovered the modus operandi used by the accused to show inflated sales by Satyam Computers Service.
According to the CBI, officials at Satyam created a protocol to manipulate software computing man hours spent on client projects in order to show inflated sales by Satyam to the tune of Rs 4,746 crores. Through this protocol, the CBI said, the accused bypassed the regular system and created false invoices that were shown only to the company’s finance department and not clients. However, the CBI investigations till now only pertains to misdeeds owned up by accused Ramalinga Raju and throws no light on the alleged diversion of funds.
“Investigation further revealed that these invoices were generated for the purpose of inflating the sales and the amounts pertaining to these false and fabricated invoices were shown as receivables in the books of accounts of M/s SCSL thereby dishonestly inflating the revenues of the company,’’ a CBI spokesperson said in a release here. The CBI found 7,561 fake invoices worth Rs 5,117 crores in the course of the investigations . Out of these 7,561 invoices, the CBI said, the accused entered 6,603 of these false invoices amounting to Rs 4,746 crores into the books of accounts.
The investigating agency further said that it had identified the individuals who had generated and hidden these false and fabricated invoices and also identified the computer server where incriminating electronic records were stored. CBI said that the incriminating data had been retrieved and that the agency had also got opinions from computer forensic experts.
“As a result of this detection, the actual modus operandi as well as the individuals who have perpetrated the fraud have been identified which resulted in unearthing the whole fraud and helped in finalisation of the investigation,” CBI said. Meanwhile, a trial court on Saturday also dismissed the bails application of accused B Ramalinga Raju, B Ramaraju and V Srinivas. Apart from these three accused, five others are in custody.
Judicial remand of Satyam accused extended by 14 days
Press Trust Of India / Hyderabad April 29, 2009
The judicial remand of former Satyam Chairman B Ramalinga Raju and seven other accused was extended by 14 days today by a local court here.
All the accused in the multi-crore rupee fraud case were produced before the XIV Additional Chief Metropolitan Magistrate K Sudhakar, who extended their remand till May 13.
Earlier, B Ramalinga Raju and other accused were brought to the court at 10.30 am in a police van from the Chanchalguda jail. As per court procedure, the accused were to be present in the court to receive a copy each of the charge sheet filed by the CBI against them.
However, CBI Public Prosecutor Venkat Ramana informed the judge that copies of the charge sheet could not be brought to the court as they are kept in a make-shift office of the CBI and there were difficulties in transporting them.
He told the court that the CBI is ready to provide copies of the charge sheet at the office. This is the third time that B Ramalinga Raju has been produced before court since his arrest.
Defence counsel Bharat Kumar objected to this saying that providing copies of the charge sheet to the accused is mandatory as per court norms, and he insisted on them.
The CBI prosecutor requested time from the court to make the copies available.The judge directed the CBI to provide copies of the charge sheet to the accused on May 4.
Besides Ramalinga Raju, his brother and former Satyam MD Rama Raju, ex-CFO Vadlamani Srinivas, former director of Price Waterhouse S Gopalakrishnan and his deputy Talluri Srinivas, Satyam employees G Ramakrishna, Venkatpati Raju and Srisailam were produced in the court
Ramalinga Raju’s another brother Suryanarayana Raju of SRSR advisory firm was also present in the court. He is on anticipatory bail.
Defence counsel Bharat Kumar objected to this saying that providing copies of the charge sheet to the accused is mandatory as per court norms, and he insisted on them.
The CBI prosecutor requested time from the court to make the copies available. The judge directed the CBI to provide copies of the charge sheet to the accused on May 4.
Besides Ramalinga Raju, his brother and former Satyam MD Rama Raju, ex-CFO Vadlamani Srinivas, former director of Price Waterhouse S Gopalakrishnan and his deputy Talluri Srinivas, Satyam employees G Ramakrishna, Venkatpati Raju and Srisailam were produced in the court Ramalinga Raju’s another brother Suryanarayana Raju of SRSR advisory firm was also present in the court. He is on anticipatory bail.
The judicial remand of former Satyam Chairman B Ramalinga Raju and seven other accused was extended by 14 days today by a local court here.
All the accused in the multi-crore rupee fraud case were produced before the XIV Additional Chief Metropolitan Magistrate K Sudhakar, who extended their remand till May 13.
Earlier, B Ramalinga Raju and other accused were brought to the court at 10.30 am in a police van from the Chanchalguda jail. As per court procedure, the accused were to be present in the court to receive a copy each of the charge sheet filed by the CBI against them.
However, CBI Public Prosecutor Venkat Ramana informed the judge that copies of the charge sheet could not be brought to the court as they are kept in a make-shift office of the CBI and there were difficulties in transporting them.
He told the court that the CBI is ready to provide copies of the charge sheet at the office. This is the third time that B Ramalinga Raju has been produced before court since his arrest.
Defence counsel Bharat Kumar objected to this saying that providing copies of the charge sheet to the accused is mandatory as per court norms, and he insisted on them.
The CBI prosecutor requested time from the court to make the copies available.The judge directed the CBI to provide copies of the charge sheet to the accused on May 4.
Besides Ramalinga Raju, his brother and former Satyam MD Rama Raju, ex-CFO Vadlamani Srinivas, former director of Price Waterhouse S Gopalakrishnan and his deputy Talluri Srinivas, Satyam employees G Ramakrishna, Venkatpati Raju and Srisailam were produced in the court
Ramalinga Raju’s another brother Suryanarayana Raju of SRSR advisory firm was also present in the court. He is on anticipatory bail.
Defence counsel Bharat Kumar objected to this saying that providing copies of the charge sheet to the accused is mandatory as per court norms, and he insisted on them.
The CBI prosecutor requested time from the court to make the copies available. The judge directed the CBI to provide copies of the charge sheet to the accused on May 4.
Besides Ramalinga Raju, his brother and former Satyam MD Rama Raju, ex-CFO Vadlamani Srinivas, former director of Price Waterhouse S Gopalakrishnan and his deputy Talluri Srinivas, Satyam employees G Ramakrishna, Venkatpati Raju and Srisailam were produced in the court Ramalinga Raju’s another brother Suryanarayana Raju of SRSR advisory firm was also present in the court. He is on anticipatory bail.
Tuesday, April 28, 2009
Raju used over 7,000 false invoices to fudge books
27 Apr 2009, PTI
NEW DELHI: The financial fraud perpetrated by the founders of Satyam Computer Services was executed through a well-planned accounting system that used as many as 7,561 fraudulent invoices worth Rs.5,117 crore to inflate the company's sales, the Central Bureau of Investigation (CBI) alleged Monday.
To perpetrate the fraud, the accused also created an identity and code that not only bypassed all other accounting systems, but also managed to hide the fraudulent invoices from other departments, the premier investigating agency said.
"Investigations revealed that the accused have already entered 6,603 out of these false and fabricated invoices amounting to Rs 4,746 crore into their books of accounts thereby inflating the revenues of the company to this tune," said the CBI in a statement.
The CBI came to the conclusion using cyber forensic techniques to unearth the alleged Rs 780 crore ($1.5-billion) scam that is alleged to have been perpetrated by group's founder B. Ramalinga Raju and his associates.
The accused had used an emergency option of feeding invoices directly to the company's inventory management software, which in normal circumstances would be routed and validated through several software systems.
Simultaneously, the scamsters generated a new identification code called "Super User", that enabled them to hide or "unhide" invoices created in the company's Invoice Management System, thereby making the fraudulent invoices invisible to other departments.
"The amounts pertaining to these false and fabricated invoices were shown as receivables in the books of accounts of Satyam, thereby inflating the revenues of the company," the statement said.
The agency also identified the computer server used for storing the "incriminating data" resulting in the identification of the perpetrators of the fraud, unearthing the quantum of the fraud, and the modus operandi used by the accused.
Meanwhile, the trial court rejected the bail application of the Raju brothers and former chief financial officer V. Srinivas April 25 and gave CBI the permission to conduct further investigation into acquisition of assets by the accused and diversion of funds.
NEW DELHI: The financial fraud perpetrated by the founders of Satyam Computer Services was executed through a well-planned accounting system that used as many as 7,561 fraudulent invoices worth Rs.5,117 crore to inflate the company's sales, the Central Bureau of Investigation (CBI) alleged Monday.
To perpetrate the fraud, the accused also created an identity and code that not only bypassed all other accounting systems, but also managed to hide the fraudulent invoices from other departments, the premier investigating agency said.
"Investigations revealed that the accused have already entered 6,603 out of these false and fabricated invoices amounting to Rs 4,746 crore into their books of accounts thereby inflating the revenues of the company to this tune," said the CBI in a statement.
The CBI came to the conclusion using cyber forensic techniques to unearth the alleged Rs 780 crore ($1.5-billion) scam that is alleged to have been perpetrated by group's founder B. Ramalinga Raju and his associates.
The accused had used an emergency option of feeding invoices directly to the company's inventory management software, which in normal circumstances would be routed and validated through several software systems.
Simultaneously, the scamsters generated a new identification code called "Super User", that enabled them to hide or "unhide" invoices created in the company's Invoice Management System, thereby making the fraudulent invoices invisible to other departments.
"The amounts pertaining to these false and fabricated invoices were shown as receivables in the books of accounts of Satyam, thereby inflating the revenues of the company," the statement said.
The agency also identified the computer server used for storing the "incriminating data" resulting in the identification of the perpetrators of the fraud, unearthing the quantum of the fraud, and the modus operandi used by the accused.
Meanwhile, the trial court rejected the bail application of the Raju brothers and former chief financial officer V. Srinivas April 25 and gave CBI the permission to conduct further investigation into acquisition of assets by the accused and diversion of funds.
Satyam’s accounting system was manipulated: CBI
28 Apr 2009, ET Bureau
NEW DELHI: The CBI has finalised investigations into falsification of accounts and forgery of documents in the Satyam fraud case and found that the accounting system was manipulated to inflate the company’s sales by Rs 5,117 crores.
Using cyber forensic techniques, the investigating agency said it had uncovered the modus operandi used by the accused to show inflated sales by Satyam Computers Service.
According to the CBI, officials at Satyam created a protocol to manipulate software computing man hours spent on client projects in order to show inflated sales by Satyam to the tune of Rs 4,746 crores. Through this protocol, the CBI said, the accused bypassed the regular system and created false invoices that were shown only to the company’s finance department and not clients. However, the CBI investigations till now only pertains to misdeeds owned up by accused Ramalinga Raju and throws no light on the alleged diversion of funds.
“Investigation further revealed that these invoices were generated for the purpose of inflating the sales and the amounts pertaining to these false and fabricated invoices were shown as receivables in the books of accounts of M/s SCSL thereby dishonestly inflating the revenues of the company,’’ a CBI spokesperson said in a release here. The CBI found 7,561 fake invoices worth Rs 5,117 crores in the course of the investigations . Out of these 7,561 invoices, the CBI said, the accused entered 6,603 of these false invoices amounting to Rs 4,746 crores into the books of accounts.
The investigating agency further said that it had identified the individuals who had generated and hidden these false and fabricated invoices and also identified the computer server where incriminating electronic records were stored. CBI said that the incriminating data had been retrieved and that the agency had also got opinions from computer forensic experts.
“As a result of this detection, the actual modus operandi as well as the individuals who have perpetrated the fraud have been identified which resulted in unearthing the whole fraud and helped in finalisation of the investigation,” CBI said. Meanwhile, a trial court on Saturday also dismissed the bails application of accused B Ramalinga Raju, B Ramaraju and V Srinivas. Apart from these three accused, five others are in custody.
NEW DELHI: The CBI has finalised investigations into falsification of accounts and forgery of documents in the Satyam fraud case and found that the accounting system was manipulated to inflate the company’s sales by Rs 5,117 crores.
Using cyber forensic techniques, the investigating agency said it had uncovered the modus operandi used by the accused to show inflated sales by Satyam Computers Service.
According to the CBI, officials at Satyam created a protocol to manipulate software computing man hours spent on client projects in order to show inflated sales by Satyam to the tune of Rs 4,746 crores. Through this protocol, the CBI said, the accused bypassed the regular system and created false invoices that were shown only to the company’s finance department and not clients. However, the CBI investigations till now only pertains to misdeeds owned up by accused Ramalinga Raju and throws no light on the alleged diversion of funds.
“Investigation further revealed that these invoices were generated for the purpose of inflating the sales and the amounts pertaining to these false and fabricated invoices were shown as receivables in the books of accounts of M/s SCSL thereby dishonestly inflating the revenues of the company,’’ a CBI spokesperson said in a release here. The CBI found 7,561 fake invoices worth Rs 5,117 crores in the course of the investigations . Out of these 7,561 invoices, the CBI said, the accused entered 6,603 of these false invoices amounting to Rs 4,746 crores into the books of accounts.
The investigating agency further said that it had identified the individuals who had generated and hidden these false and fabricated invoices and also identified the computer server where incriminating electronic records were stored. CBI said that the incriminating data had been retrieved and that the agency had also got opinions from computer forensic experts.
“As a result of this detection, the actual modus operandi as well as the individuals who have perpetrated the fraud have been identified which resulted in unearthing the whole fraud and helped in finalisation of the investigation,” CBI said. Meanwhile, a trial court on Saturday also dismissed the bails application of accused B Ramalinga Raju, B Ramaraju and V Srinivas. Apart from these three accused, five others are in custody.
Satyam inflated sales by Rs 47.46 billion, says CBI
28 Apr 2009,
NEW DELHI: The Central Bureau of Investigation (CBI) has said that the fraud-hit Satyam Computer Services inflated sales by Rs 47.46 billion.
The CBI said that with the help of cyber forensic techniques, it was able to decipher modus operandi of Satyam corporate fraud.
"It happened like this-the accused were hiding some of the invoices that was generated through Excel porting. As a result, the concerned business circles were not aware that such invoices are existing. These invoices were not dispatched to the customers even. In fact these false invoices were generated for purpose of inflating the sales and thus inflating the revenue of the company. As a result of further investigation, individuals who generated and hidden these false invoices have been identified," said Harsh Bahl, a CBI spokesman.
The bail application of former chairman of Satyam, Ramalinga Raju and others was dismissed by the trial court on April 25.
In early January, Ramalinga Raju shocked investors by saying profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter. The government quickly stepped in and sacked the board to limit damage to India's once-shining IT sector.
Satyam, which counts Citigroup Inc, Cisco Systems Inc. and General Electric among its clients, has not reported results since releasing its July-September figures in October.
Its accounts are in the process of being reconciled and restated
NEW DELHI: The Central Bureau of Investigation (CBI) has said that the fraud-hit Satyam Computer Services inflated sales by Rs 47.46 billion.
The CBI said that with the help of cyber forensic techniques, it was able to decipher modus operandi of Satyam corporate fraud.
"It happened like this-the accused were hiding some of the invoices that was generated through Excel porting. As a result, the concerned business circles were not aware that such invoices are existing. These invoices were not dispatched to the customers even. In fact these false invoices were generated for purpose of inflating the sales and thus inflating the revenue of the company. As a result of further investigation, individuals who generated and hidden these false invoices have been identified," said Harsh Bahl, a CBI spokesman.
The bail application of former chairman of Satyam, Ramalinga Raju and others was dismissed by the trial court on April 25.
In early January, Ramalinga Raju shocked investors by saying profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter. The government quickly stepped in and sacked the board to limit damage to India's once-shining IT sector.
Satyam, which counts Citigroup Inc, Cisco Systems Inc. and General Electric among its clients, has not reported results since releasing its July-September figures in October.
Its accounts are in the process of being reconciled and restated
Saturday, April 25, 2009
Infosys generates $250 mn free cash: Nilekani
24 Apr 2009, PTI
NEW DELHI: Software exporter Infosys on Friday said that the company generates 250 million dollar free cash every quarter and will use the slowdown to fine tune their business.
In an interview to CNN, Infosys Co-chairman Nandan Nilekani said, "Infosys has a very strong position. We have two billion dollar in cash. We produce 250 million dollar every quarter in free cash flow."
However, Nilekani added for the coming financial year, the company's growth would decline by 3-6 per cent in dollar terms because of the uncertainty in the global economy.
"We are waiting for this whole thing to get over," he said.
Talking about the clients reaction to the slowdown, he said "I think our customers are cautious. They are still waiting and watching, and seeing how and when the recovery will happen. I think they're very, very prudent about their IT spending. So we are seeing all that on our business. It's a very uncertain environment out there."
The clients are waiting and watching, because they don't really know how long this crisis will last. They're waiting for growth to come back. They're waiting for liquidity to improve, he added.
Further the company co-chairman said, "We actually use this occasion to really even fine-tune your business even further, and be ready for the next upturn whenever it comes."
The company announced its fourth quarter results this month and reported first ever sequential fall in its revenue in a decade for the March 2009 quarter.
NEW DELHI: Software exporter Infosys on Friday said that the company generates 250 million dollar free cash every quarter and will use the slowdown to fine tune their business.
In an interview to CNN, Infosys Co-chairman Nandan Nilekani said, "Infosys has a very strong position. We have two billion dollar in cash. We produce 250 million dollar every quarter in free cash flow."
However, Nilekani added for the coming financial year, the company's growth would decline by 3-6 per cent in dollar terms because of the uncertainty in the global economy.
"We are waiting for this whole thing to get over," he said.
Talking about the clients reaction to the slowdown, he said "I think our customers are cautious. They are still waiting and watching, and seeing how and when the recovery will happen. I think they're very, very prudent about their IT spending. So we are seeing all that on our business. It's a very uncertain environment out there."
The clients are waiting and watching, because they don't really know how long this crisis will last. They're waiting for growth to come back. They're waiting for liquidity to improve, he added.
Further the company co-chairman said, "We actually use this occasion to really even fine-tune your business even further, and be ready for the next upturn whenever it comes."
The company announced its fourth quarter results this month and reported first ever sequential fall in its revenue in a decade for the March 2009 quarter.
TechM may raise open offer price
25 Apr 2009, ET Bureau
NEW DELHI: Hinting at a possible increase in its open offer price for Satyam, the new owner Tech Mahindra has advised shareholders of crisis-hit IT firm to wait till June 22 for the final price before tendering their shares. The open offer for acquiring 20% equity in Satyam at Rs 58 a share is set to commence on June 12 and close on July 1.
While market regulator SEBI has ruled that the open offer price cannot go below Rs 58 per share, the acquirer, in its public announcement, has said that it can raise the offer price by June 22. “As the offer price cannot be revised during seven working days prior to the closure of the offer, it would, therefore, be in the interest of shareholders to wait until the commencement of that period to know the final offer price,” Tech M said.
Tech Mahindra, which won the bid to acquire Satyam Computer Services, has made a public announcement to acquire 20% of the it company through its wholly-owned subsidiary Venturbay Consultants, a move that is aimed at increasing the new owner’s stake to 51%.
However, the offer price need not be necessarily hiked as Tech Mahindra can raise its stake to 51% at the same price of Rs 58 through a second preferential allotment if it fails to garner 20% equity through the open offer.
NEW DELHI: Hinting at a possible increase in its open offer price for Satyam, the new owner Tech Mahindra has advised shareholders of crisis-hit IT firm to wait till June 22 for the final price before tendering their shares. The open offer for acquiring 20% equity in Satyam at Rs 58 a share is set to commence on June 12 and close on July 1.
While market regulator SEBI has ruled that the open offer price cannot go below Rs 58 per share, the acquirer, in its public announcement, has said that it can raise the offer price by June 22. “As the offer price cannot be revised during seven working days prior to the closure of the offer, it would, therefore, be in the interest of shareholders to wait until the commencement of that period to know the final offer price,” Tech M said.
Tech Mahindra, which won the bid to acquire Satyam Computer Services, has made a public announcement to acquire 20% of the it company through its wholly-owned subsidiary Venturbay Consultants, a move that is aimed at increasing the new owner’s stake to 51%.
However, the offer price need not be necessarily hiked as Tech Mahindra can raise its stake to 51% at the same price of Rs 58 through a second preferential allotment if it fails to garner 20% equity through the open offer.
Rajus used 17 aides to manipulate demat accounts
25 Apr 2009, ET Bureau
HYDERABAD: Seventeen trusted lieutenants of B Ramalinga Raju, the defamed promoter of Satyam Computer Services, and his family were made to open demat accounts to fraudulently trade in shares of the promoters of the beleaguered IT firm.
Investigations by the Central Bureau of Investigation (CBI) reveal that the promoters of Satyam — Raju’s mother Applanarasamma, his brother Suryanarayana Raju and his wife Jhansi Rani — sold their shares in 1999 to 17 employees and made a killing in the market. The modus operandi shows the promoters transferred the physical shares through endorsement in the names of these 17 individuals, who, in turn, deposited the same in their demat accounts and then sold these shares through five investment companies.
The investment companies, floated by Raju and his family, included Elam Investment, High Grace Investments, Fincity Investments, High Sound Investments and Veeyes Investments. Later, these investment companies sold these shares in the market.
The money was transferred to the individual accounts of these 17 employees and their families. The latter, in turn, transferred the funds to the promoters and the transfers were done through cheques.
In 2000-01 the promoter’s family got around Rs 75 crore, of which Raju’s mother received Rs 5.5 crore, Suryanarayana Raju got around Rs 12.78 crore and his wife Jhansi Rani Rs 24.84 crore .
In the same year, these promoters also sold shares through the investment company and gifted the money to some of the family members. Featuring in this list are Ramalinga Raju (Rs 27.91 crore) and his brother Rama Raju (Rs 26.89 crore). Ramalinga Raju’s wife Nandini Raju received Rs 10.20 crore, while Rama Raju’s wife Radha Raju got Rs 9.70 crore. Ramalinga Raju’s son Rama Raju Jr was also a beneficiary and received Rs 1.97 crore.
Over the years, the promoters sold their shares in the open market and made around Rs 715 crore even though Satyam was not performing well. “The accused made hay when the sun was shining by off-loading the shares, while other investors may have been holding on to the shares with the false hope that their value would rise,” said the CBI in its charge-sheet.
From September 2006, the promoters of Satyam held their shares in a corporate entity SRSR Holdings. Suryanarayana Raju, the director of SRSR holdings, began pledging them as security with various non-banking companies on behalf of the 327 front companies floated by Raju and his family. He appointed several trusted employees as directors of these front companies to mask the fraud.
Ramalinga Raju admitted to fudging the books of Satyam in January this year. The CBI has charged him and eight others of conspiracy, cheating, falsifying accounts, generating forged valuable securities and tampering evidence.
Capital market regulator Sebi is also probing into insider trading of shares and has given inputs to other investigating agencies, said people familiar with the development.
HYDERABAD: Seventeen trusted lieutenants of B Ramalinga Raju, the defamed promoter of Satyam Computer Services, and his family were made to open demat accounts to fraudulently trade in shares of the promoters of the beleaguered IT firm.
Investigations by the Central Bureau of Investigation (CBI) reveal that the promoters of Satyam — Raju’s mother Applanarasamma, his brother Suryanarayana Raju and his wife Jhansi Rani — sold their shares in 1999 to 17 employees and made a killing in the market. The modus operandi shows the promoters transferred the physical shares through endorsement in the names of these 17 individuals, who, in turn, deposited the same in their demat accounts and then sold these shares through five investment companies.
The investment companies, floated by Raju and his family, included Elam Investment, High Grace Investments, Fincity Investments, High Sound Investments and Veeyes Investments. Later, these investment companies sold these shares in the market.
The money was transferred to the individual accounts of these 17 employees and their families. The latter, in turn, transferred the funds to the promoters and the transfers were done through cheques.
In 2000-01 the promoter’s family got around Rs 75 crore, of which Raju’s mother received Rs 5.5 crore, Suryanarayana Raju got around Rs 12.78 crore and his wife Jhansi Rani Rs 24.84 crore .
In the same year, these promoters also sold shares through the investment company and gifted the money to some of the family members. Featuring in this list are Ramalinga Raju (Rs 27.91 crore) and his brother Rama Raju (Rs 26.89 crore). Ramalinga Raju’s wife Nandini Raju received Rs 10.20 crore, while Rama Raju’s wife Radha Raju got Rs 9.70 crore. Ramalinga Raju’s son Rama Raju Jr was also a beneficiary and received Rs 1.97 crore.
Over the years, the promoters sold their shares in the open market and made around Rs 715 crore even though Satyam was not performing well. “The accused made hay when the sun was shining by off-loading the shares, while other investors may have been holding on to the shares with the false hope that their value would rise,” said the CBI in its charge-sheet.
From September 2006, the promoters of Satyam held their shares in a corporate entity SRSR Holdings. Suryanarayana Raju, the director of SRSR holdings, began pledging them as security with various non-banking companies on behalf of the 327 front companies floated by Raju and his family. He appointed several trusted employees as directors of these front companies to mask the fraud.
Ramalinga Raju admitted to fudging the books of Satyam in January this year. The CBI has charged him and eight others of conspiracy, cheating, falsifying accounts, generating forged valuable securities and tampering evidence.
Capital market regulator Sebi is also probing into insider trading of shares and has given inputs to other investigating agencies, said people familiar with the development.
Tech Mahindra gets go ahead to buy stake in Satyam Computers
24 Apr 2009, ET Bureau
HYDERABAD: IT services firm Tech Mahindra on Friday got the crucial anti-trust approval from Germany, a pre-requisite for concluding a stake buy in Top Indian outsourcing cos
The Pune based IT services firm also needs an anti-trust from the US to conclude its stake buy in the beleaguered IT firm.
It has already got clearances from the domestic bourses, according to statement issued by Satyam.
Tech Mahindra emerged the highest bidder for Satyam at Rs 58 per share. It will acquire a 31% stake through a preferential offer and an additional 20% stake through a mandatory open offer. The open offer will be made at Rs 58 per share. The price can be raised seven days before the closure of the open offer, going by SEBI guidelines.
Satyam plunged into a crisis after its defamed founder B Ramalinga Raju confessed to perpetrating a Rs 7,000 crore financial fraud.
HYDERABAD: IT services firm Tech Mahindra on Friday got the crucial anti-trust approval from Germany, a pre-requisite for concluding a stake buy in Top Indian outsourcing cos
The Pune based IT services firm also needs an anti-trust from the US to conclude its stake buy in the beleaguered IT firm.
It has already got clearances from the domestic bourses, according to statement issued by Satyam.
Tech Mahindra emerged the highest bidder for Satyam at Rs 58 per share. It will acquire a 31% stake through a preferential offer and an additional 20% stake through a mandatory open offer. The open offer will be made at Rs 58 per share. The price can be raised seven days before the closure of the open offer, going by SEBI guidelines.
Satyam plunged into a crisis after its defamed founder B Ramalinga Raju confessed to perpetrating a Rs 7,000 crore financial fraud.
Tech Mahindra clarification on Satyam open-offer pricing
24 Apr 2009,
NEW DELHI: Tech Mahindra, the new owners of the crisis-hit IT firm Satyam Computer, has clarified that the public announcement which it made to Satyam shareholders, urging them to wait till June 22 for the final price before tendering their shares, is one of many disclosures that an acquirer is expected to make under applicable law in a public announcement.
"This provision is not, however, an indication of our current intent to increase the offer price in the future and must not be construed in any other manner." it said in a statement.
Earlier, Tech Mahindra's announcement had generated speculation that it was considering a possible increase in its open offer price for Satyam.
"As the offer price cannot be revised during seven working days prior to the closure of the offer, it would, therefore, be in the interest of shareholders to wait until the commencement of that period to know the final offer price," PTI said, quoting Tech Mahindra.
NEW DELHI: Tech Mahindra, the new owners of the crisis-hit IT firm Satyam Computer, has clarified that the public announcement which it made to Satyam shareholders, urging them to wait till June 22 for the final price before tendering their shares, is one of many disclosures that an acquirer is expected to make under applicable law in a public announcement.
"This provision is not, however, an indication of our current intent to increase the offer price in the future and must not be construed in any other manner." it said in a statement.
Earlier, Tech Mahindra's announcement had generated speculation that it was considering a possible increase in its open offer price for Satyam.
"As the offer price cannot be revised during seven working days prior to the closure of the offer, it would, therefore, be in the interest of shareholders to wait until the commencement of that period to know the final offer price," PTI said, quoting Tech Mahindra.
Satyam gets nod from Federal Cartel Office of Germany
April 24, 2009
Satyam Computer Services Limited stated that the Federal Cartel Office (FCO) of Germany has issued a letter permitting the completion of the acquisition of a controlling stake in the company by Venturbay Consultants Private Limited, a subsidiary controlled by Tech Mahindra Limited.
According to a Satyam spokesperson, FCO's permission is needed as Satyam has been listed on NYSE Euronext.
Satyam has also received ‘in-principle’ approvals from Bombay Stock Exchange Limited and National Stock Exchange of India Limited for the issuance of 302.76 million equity shares ('initial shares') of Rs 2 each at a premium of Rs 56 per share to Venturbay Consultants on a preferential basis. Upon allotment of the shares, Satyam will seek the approval of the BSE and NSE for listing and trading of the initial shares, the company stated in a press release on Friday.
Satyam already received the final approval from the Securities and Exchange Board of India (Sebi) for the company's takeover. Sebi sent two letters to Satyam granting certain exemptions from its Takeover Regulations to select an investor.
An English translation of FCO, BSE and NSE letters, all dated April 22, 2009, are being furnished to the US Securities and Exchange Commission.
Satyam, Tech Mahindra and Venturbay Consultants entered into a share subscription agreement for acquisition of 31 per cent share capital of Satyam. Following this, Tech Mahindra is required to make a public offer to acquire 20 per cent of the enhanced share capital of Satyam at a minimum price of Rs 58 per share.
Satyam had earlier announced that Euronext Amsterdam NV approved the company's application for delisting its American Depository Shares (ADS) from the NYSE Euronext. The ADS would be delisted and trading in the ADS would no longer be possible on Euronext Amsterdam with effect from May 20.
The company said that the mandatory cash tender offer by Venturbay Consultants would be now open for participation by investors holding their ADS through Euroclear Nederland (ECN holders).
Satyam Computer Services Limited stated that the Federal Cartel Office (FCO) of Germany has issued a letter permitting the completion of the acquisition of a controlling stake in the company by Venturbay Consultants Private Limited, a subsidiary controlled by Tech Mahindra Limited.
According to a Satyam spokesperson, FCO's permission is needed as Satyam has been listed on NYSE Euronext.
Satyam has also received ‘in-principle’ approvals from Bombay Stock Exchange Limited and National Stock Exchange of India Limited for the issuance of 302.76 million equity shares ('initial shares') of Rs 2 each at a premium of Rs 56 per share to Venturbay Consultants on a preferential basis. Upon allotment of the shares, Satyam will seek the approval of the BSE and NSE for listing and trading of the initial shares, the company stated in a press release on Friday.
Satyam already received the final approval from the Securities and Exchange Board of India (Sebi) for the company's takeover. Sebi sent two letters to Satyam granting certain exemptions from its Takeover Regulations to select an investor.
An English translation of FCO, BSE and NSE letters, all dated April 22, 2009, are being furnished to the US Securities and Exchange Commission.
Satyam, Tech Mahindra and Venturbay Consultants entered into a share subscription agreement for acquisition of 31 per cent share capital of Satyam. Following this, Tech Mahindra is required to make a public offer to acquire 20 per cent of the enhanced share capital of Satyam at a minimum price of Rs 58 per share.
Satyam had earlier announced that Euronext Amsterdam NV approved the company's application for delisting its American Depository Shares (ADS) from the NYSE Euronext. The ADS would be delisted and trading in the ADS would no longer be possible on Euronext Amsterdam with effect from May 20.
The company said that the mandatory cash tender offer by Venturbay Consultants would be now open for participation by investors holding their ADS through Euroclear Nederland (ECN holders).
Tuesday, April 21, 2009
Satyam fraud: What was Vadlamani’s role?
Hyderabad, April 19
What was the role of Mr Vadlamani Srinivas, ex-CFO of Satyam Computer Services, who revealed that the FDs were non-existent, results manipulated and he just signed on instructions from Mr B. Ramalinga Raju, ex-Chairman, in the Rs 7,136-crore financial fraud?
Being at the centre of all financial dealings of Satyam, Mr V. Srinivas wilfully and actively manipulated financial data and guided the finance department staff in modifying the published results, which were false and forged, the Central Bureau of Investigation (CBI) has alleged.
In its charge sheet on the Satyam case, the CBI said Mr Srinivas got the monthly bank statements of various banks forged, he got issued forged bank balance confirmation letters and got the forged letters signed by Mr B. Rama Raju (Ex-Managing Director), an accused and brother of Mr Ramalinga Raju, showing purported transfer of funds and got forged FDs prepared.
All these forged documents were used for fraudulently inflating the cash and bank balance artificially in the books of accounts for several years, the CBI chargsheet has brought to light.
Though Mr Srinivas was never designated as Director, he subscribed his signature in the annual financial statements of the company as a Director, the investigating agency has charged.
The ex-CFO dishonestly got the falsified, inflated sales invoices generated and fed in the Oracle Financials System. He was in league with the other accused persons and perpetrated the fraudulent acts. Thus, he was privy to the offences, it concluded.
Further, Mr Srinivas guided the finance department personnel on the quantum of inflation of sales to be infused into the computer system from time to time. The CBI has retrieved evidence to this effect from his e-mail box, the chargesheet said.
Rosy presentations
Mr Srinivas along with Mr Ramalinga Raju gave deceptive replies on Satyam’s earnings during conference calls conducted every quarter to various investors, thus distorting the actual financial position.
During board meetings and the audit committee meetings, the ex-CFO made rosy presentations of the company’s financial health, despite knowing the real financial position. Similarly, by conniving with the Raju brothers, he worked against the interest of the company and shareholders, whose interests he was to protect.
While being party to perpetrating the fraud with the Raju brothers and other accused, Mr Srinivas was a beneficiary. He gained from the dividends received and the amount got by offloading shares at opportune moments, the CBI accused in the chargesheet.
What was the role of Mr Vadlamani Srinivas, ex-CFO of Satyam Computer Services, who revealed that the FDs were non-existent, results manipulated and he just signed on instructions from Mr B. Ramalinga Raju, ex-Chairman, in the Rs 7,136-crore financial fraud?
Being at the centre of all financial dealings of Satyam, Mr V. Srinivas wilfully and actively manipulated financial data and guided the finance department staff in modifying the published results, which were false and forged, the Central Bureau of Investigation (CBI) has alleged.
In its charge sheet on the Satyam case, the CBI said Mr Srinivas got the monthly bank statements of various banks forged, he got issued forged bank balance confirmation letters and got the forged letters signed by Mr B. Rama Raju (Ex-Managing Director), an accused and brother of Mr Ramalinga Raju, showing purported transfer of funds and got forged FDs prepared.
All these forged documents were used for fraudulently inflating the cash and bank balance artificially in the books of accounts for several years, the CBI chargsheet has brought to light.
Though Mr Srinivas was never designated as Director, he subscribed his signature in the annual financial statements of the company as a Director, the investigating agency has charged.
The ex-CFO dishonestly got the falsified, inflated sales invoices generated and fed in the Oracle Financials System. He was in league with the other accused persons and perpetrated the fraudulent acts. Thus, he was privy to the offences, it concluded.
Further, Mr Srinivas guided the finance department personnel on the quantum of inflation of sales to be infused into the computer system from time to time. The CBI has retrieved evidence to this effect from his e-mail box, the chargesheet said.
Rosy presentations
Mr Srinivas along with Mr Ramalinga Raju gave deceptive replies on Satyam’s earnings during conference calls conducted every quarter to various investors, thus distorting the actual financial position.
During board meetings and the audit committee meetings, the ex-CFO made rosy presentations of the company’s financial health, despite knowing the real financial position. Similarly, by conniving with the Raju brothers, he worked against the interest of the company and shareholders, whose interests he was to protect.
While being party to perpetrating the fraud with the Raju brothers and other accused, Mr Srinivas was a beneficiary. He gained from the dividends received and the amount got by offloading shares at opportune moments, the CBI accused in the chargesheet.
Satyam surges 5 pc, Tech Mahindra dips 8 pc on BSE
21 Apr 2009 PTI
MUMBAI: Satyam Computer Services on Tuesday surged over five per cent on the Bombay Stock Exchange with its new owner, Tech Mahindra, scheduled to make an open offer on Tuesday for a 20 per cent stake in the IT firm.
Meanwhile, shares of Tech Mahindra dipped as much as eight per cent in the intra-day trade on the bourses.
Tech Mahindra would today announce an open offer for a 20 per cent additional stake in Satyam.
Marketmen said there was a surge in Satyam scrip owing to the open offer, while the dip in Tech Mahindra was largely because investors turned cautious and dumped the stock.
The government-appointed board of Satyam met in Hyderabad yesterday. In the meeting, Tech Mahindra officials and Mahindra Group chief Anand Mahindra were invitees.
Tech Mahindra yesterday deposited Rs 2,910 crore for a 51 per cent controlling stake in Satyam Computer.
Shares of Satyam opened firm and rallied further to touch a high of Rs 50.15, up 5.47 per cent over previous close on the BSE.
Similar movement was seen on the National Stock Exchange, where the scrip surged 5.03 per cent to a high of Rs 50.10.
On the volume front, a good 1.55 crore shares changed hands on both the bourses.
MUMBAI: Satyam Computer Services on Tuesday surged over five per cent on the Bombay Stock Exchange with its new owner, Tech Mahindra, scheduled to make an open offer on Tuesday for a 20 per cent stake in the IT firm.
Meanwhile, shares of Tech Mahindra dipped as much as eight per cent in the intra-day trade on the bourses.
Tech Mahindra would today announce an open offer for a 20 per cent additional stake in Satyam.
Marketmen said there was a surge in Satyam scrip owing to the open offer, while the dip in Tech Mahindra was largely because investors turned cautious and dumped the stock.
The government-appointed board of Satyam met in Hyderabad yesterday. In the meeting, Tech Mahindra officials and Mahindra Group chief Anand Mahindra were invitees.
Tech Mahindra yesterday deposited Rs 2,910 crore for a 51 per cent controlling stake in Satyam Computer.
Shares of Satyam opened firm and rallied further to touch a high of Rs 50.15, up 5.47 per cent over previous close on the BSE.
Similar movement was seen on the National Stock Exchange, where the scrip surged 5.03 per cent to a high of Rs 50.10.
On the volume front, a good 1.55 crore shares changed hands on both the bourses.
Tech Mahindra deposits Rs 2,910 Cr for Satyam; looks for new CFO
Apr 21, 2009
TM will make an open for 20% on Tuesday, while it's also on the lookout for a new CFO for Satyam.
Satyam Computer Services has said that Tech Mahindra, through its subsidiary Venturebay Consultants Pvt. Ltd, has deposited the cash for both the acquisition of 31% stake and subsequent open offer in seperate escrow accounts. Public offer for the 20% open offer will be made on Tuesday.
Since the funds have been submitted, Tech Mahindra can now appoint four nominees on the board of Satyam. The government appointed six directors will continue until further orders from Company Law Board.
The four Tech Mahindra representatives to join Satyam board are - Vineet Nayar, Vice Chairman and MD; CP Gurnani, President of International Operations; Sanjay Kalra, President of Strategic Initiatives; and Ulhas Yargop, Director at Tech Mahindra and President of IT sector, Mahindra Group. Tech Mahindra and Satyam also discussed the transition plan today.
Tech Mahindra, which will become a top tier IT firm after the deal, has deposited a total of Rs 2,910 crore in the escrow account for the acquisition of a controlling stake in Satyam. Tech Mahindra has deposited Rs 1,756 crore ($351 million) in one escrow account for acquisition for a 31% stake. This would be done through issue of fresh equity shares. It has deposited another Rs 1,154 crore ($231 million) for the open offer for the additional 20% stake.
Tech Mahindra has also said that Satyam will continue as a stand alone unit. Anand Mahindra, today addressed top 500 leaders at Satyam and has said that he could see a sense of palpable relief among the Satyam customers. Tech Mahindra is now on a lookout for a new CFO for Satyam and has said that it will name a new CFO in a few weeks.
Satyam's board is now waiting for various regulatory approvals to go ahead with the issue, including the nod from market regulator Securities & Exchange Board of India (SEBI). It has already got the Company Law Board nod.
Tech Mahindra, in which British Telecom has a 30% stake, raised Rs 875 crore for the acquisition through issue of debt securities. It has issued Rs 600 crore worth of non-convertible debenture (NCD) and the Rs 275 crore commercial paper issues, which have been subscribed by a clutch of mutual funds, banks and insurance companies. In a press conference held today, M&M group CFO, Bharat Doshi said, "Tech Mahindra has a strong balance sheet and that has made this possible."
TM will make an open for 20% on Tuesday, while it's also on the lookout for a new CFO for Satyam.
Satyam Computer Services has said that Tech Mahindra, through its subsidiary Venturebay Consultants Pvt. Ltd, has deposited the cash for both the acquisition of 31% stake and subsequent open offer in seperate escrow accounts. Public offer for the 20% open offer will be made on Tuesday.
Since the funds have been submitted, Tech Mahindra can now appoint four nominees on the board of Satyam. The government appointed six directors will continue until further orders from Company Law Board.
The four Tech Mahindra representatives to join Satyam board are - Vineet Nayar, Vice Chairman and MD; CP Gurnani, President of International Operations; Sanjay Kalra, President of Strategic Initiatives; and Ulhas Yargop, Director at Tech Mahindra and President of IT sector, Mahindra Group. Tech Mahindra and Satyam also discussed the transition plan today.
Tech Mahindra, which will become a top tier IT firm after the deal, has deposited a total of Rs 2,910 crore in the escrow account for the acquisition of a controlling stake in Satyam. Tech Mahindra has deposited Rs 1,756 crore ($351 million) in one escrow account for acquisition for a 31% stake. This would be done through issue of fresh equity shares. It has deposited another Rs 1,154 crore ($231 million) for the open offer for the additional 20% stake.
Tech Mahindra has also said that Satyam will continue as a stand alone unit. Anand Mahindra, today addressed top 500 leaders at Satyam and has said that he could see a sense of palpable relief among the Satyam customers. Tech Mahindra is now on a lookout for a new CFO for Satyam and has said that it will name a new CFO in a few weeks.
Satyam's board is now waiting for various regulatory approvals to go ahead with the issue, including the nod from market regulator Securities & Exchange Board of India (SEBI). It has already got the Company Law Board nod.
Tech Mahindra, in which British Telecom has a 30% stake, raised Rs 875 crore for the acquisition through issue of debt securities. It has issued Rs 600 crore worth of non-convertible debenture (NCD) and the Rs 275 crore commercial paper issues, which have been subscribed by a clutch of mutual funds, banks and insurance companies. In a press conference held today, M&M group CFO, Bharat Doshi said, "Tech Mahindra has a strong balance sheet and that has made this possible."
Satyam: No layoffs now, salary cuts possible
Tech Mahindra chairman Anand Mahindra on Monday ruled out immediate job losses among the 45,000-odd Satyam employees but added that an integration team “is already in place in Hyderabad to decide on the staff strength” for the acquired company. Speaking at a press conference after the first detailed meeting with the staff of the company taken over by Tech Mahindra last week, he said, “Our immediate plan would be to retain current customers, win back businesses and retain the key 100 associates.”
The plans also include finding a CFO for Satyam, said Vineet Nayyar, CEO of Tech Mahindra. “We are on the lookout for a CFO, who would be decided in the next few weeks.” One of the first tasks of the new incumbent could be asking for a salary cut of at least 10% across all categories, a source close to the company said.
Chairman of the government-appointed board, Kiran Karnik, said, “One cannot say anything on layoffs now. A list of key 100 employees, which was drawn by AS Murthy, and who were responsible to get businesses even during the crucial period after Raju’s disclosure, has been given to Tech Mahindra and (they) have been asked to retain them for an year.”
Karnik also said that more clarity about the company’s financials would be known once the 20% open offer announcement is made on Tuesday and also after the restatement of accounts.
Tech Mahindra has deposited the Rs 1,756 crore towards its 31% stake on Monday. It also put Rs 1,154 crore for public offer in a separate escrow account.
The plans also include finding a CFO for Satyam, said Vineet Nayyar, CEO of Tech Mahindra. “We are on the lookout for a CFO, who would be decided in the next few weeks.” One of the first tasks of the new incumbent could be asking for a salary cut of at least 10% across all categories, a source close to the company said.
Chairman of the government-appointed board, Kiran Karnik, said, “One cannot say anything on layoffs now. A list of key 100 employees, which was drawn by AS Murthy, and who were responsible to get businesses even during the crucial period after Raju’s disclosure, has been given to Tech Mahindra and (they) have been asked to retain them for an year.”
Karnik also said that more clarity about the company’s financials would be known once the 20% open offer announcement is made on Tuesday and also after the restatement of accounts.
Tech Mahindra has deposited the Rs 1,756 crore towards its 31% stake on Monday. It also put Rs 1,154 crore for public offer in a separate escrow account.
Monday, April 20, 2009
Three Tech Mahindra executives may join Satyam board
20 Apr 2009
NEW DELHI: Three senior executives of Tech Mahindra are likely to be inducted in the Satyam board. The names doing the rounds are vice-chairman, MD & CEO Vineet Nayyar, president (international operations) CP Gurnani, and President (strategic initiatives) Sanjay Kalra.
Anand Mahindra, chairman of Tech Mahindra, who is in Hyderabad, is expected to address Satyam employees to provide them comfort amid concern that the new management may cut jobs.
Tech Mahindra will have its first official interaction with the Satyam board on Monday after obtaining the Company Law Board's approval for acquiring majority stake in troubled IT company.
Mahindra may also address all the vertical and process heads of Satyam and get an idea of the operations and business from the officials on the field.
"There is a board meeting on Monday. All Satyam directors and senior officials of Tech Mahindra will participate in the meeting to take stock of the situation," a Satyam Computer spokesperson said.
Tech Mahindra emerged as the highest bidder for majority stake in Satyam at Rs 58 a share in an auction held on last Monday. It has to pay Rs 1,756 crore by April 22, 2009 for 31% stake.
As per the bidding schedule, the payment of Rs 1,756 crore will ensure the ownership of Satyam to Tech Mahindra following which the Mumbai-based company has to acquire another 20% in an open offer to public.
NEW DELHI: Three senior executives of Tech Mahindra are likely to be inducted in the Satyam board. The names doing the rounds are vice-chairman, MD & CEO Vineet Nayyar, president (international operations) CP Gurnani, and President (strategic initiatives) Sanjay Kalra.
Anand Mahindra, chairman of Tech Mahindra, who is in Hyderabad, is expected to address Satyam employees to provide them comfort amid concern that the new management may cut jobs.
Tech Mahindra will have its first official interaction with the Satyam board on Monday after obtaining the Company Law Board's approval for acquiring majority stake in troubled IT company.
Mahindra may also address all the vertical and process heads of Satyam and get an idea of the operations and business from the officials on the field.
"There is a board meeting on Monday. All Satyam directors and senior officials of Tech Mahindra will participate in the meeting to take stock of the situation," a Satyam Computer spokesperson said.
Tech Mahindra emerged as the highest bidder for majority stake in Satyam at Rs 58 a share in an auction held on last Monday. It has to pay Rs 1,756 crore by April 22, 2009 for 31% stake.
As per the bidding schedule, the payment of Rs 1,756 crore will ensure the ownership of Satyam to Tech Mahindra following which the Mumbai-based company has to acquire another 20% in an open offer to public.
Tech Mahindra to retain Satyam management team
20 Apr 2009, , ET Bureau
HYDERABAD: Tech Mahindra Ltd, a mid-sized Indian IT outsourcer, said on Monday it had deposited the funds needed for taking the majority stake in fraud-hit Satyam Computer Services Ltd.
Tech Mahindra was to pay $351 million for a 31 percent preferential allotment of new shares and would then make an open offer for a further 20 percent of the company at a cost of about $231 million.
Funds for the 31 percent stake as well as the open offer have been deposited by Tech Mahindra, Satyam Chairman Kiran Karnik told reporters at the company headquarters in the southern Indian city of Hyderabad.
Tech Mahindra took over Satyam after it bid the highest last week for a controlling stake. The deal will propel Tech Mahindra into the top tier of Indian IT firms and throw a lifeline to the firm at the centre of India's biggest corporate scandal.
Three months ago, Satyam's founder and chairman shocked investors by saying profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter.
The government quickly stepped in and sacked the board to limit damage to India's once-shining IT sector.
HYDERABAD: Tech Mahindra Ltd, a mid-sized Indian IT outsourcer, said on Monday it had deposited the funds needed for taking the majority stake in fraud-hit Satyam Computer Services Ltd.
Tech Mahindra was to pay $351 million for a 31 percent preferential allotment of new shares and would then make an open offer for a further 20 percent of the company at a cost of about $231 million.
Funds for the 31 percent stake as well as the open offer have been deposited by Tech Mahindra, Satyam Chairman Kiran Karnik told reporters at the company headquarters in the southern Indian city of Hyderabad.
Tech Mahindra took over Satyam after it bid the highest last week for a controlling stake. The deal will propel Tech Mahindra into the top tier of Indian IT firms and throw a lifeline to the firm at the centre of India's biggest corporate scandal.
Three months ago, Satyam's founder and chairman shocked investors by saying profits had been overstated for years, putting in doubt the survival of a company once ranked as India's fourth-largest software services exporter.
The government quickly stepped in and sacked the board to limit damage to India's once-shining IT sector.
Tech Mahindra deposits funds for Satyam stake buy
20 Apr 2009, REUTERS
HYDERABAD|MUMBAI: Tech Mahindra, the new owner of Satyam Computer Services, has decided to continue with the current management of the scam-hit firm for the transition period. Its priority is to focus on making Satyam’s business viable by halting customer attrition, boosting employee morale and leveraging the best practices of Satyam. “The plan is to work with the current management. The focus is more on governance and restoring customer confidence,” said a source close to Tech Mahindra. However, it will also soon name a chief financial officer, who may not be an insider. The CFO’s post had been vacant after S Vadlamani, the earlier CFO, quit.
Tech Mahindra will have its first official interaction with the Satyam board on Monday. All Satyam directors, senior Tech Mahindra officials and Anand Mahindra, chief of the Mahindra group, will take part in the Satyam board meeting in Hyderabad. Mahindra may also address all the vertical and process heads of Satyam and get an idea of the operations and business from the officials on the field.
The company was widely expected to announce its own man as CEO of Satyam, and the quiet and reserved Ulhas N Yargop, who heads the IT initiatives of the Mahindra group, was tipped to be the candidate. But, persons with knowledge of the situation told ET that the current Satyam management is set to continue during the transition phase.
According to highly-placed sources privy to the information, some of the key business leaders of Satyam who will be retained are TR Anand, who heads Satyam’s telecom business unit, Manish Mehta who spearheads the SAP practice, Keshab Panda who heads the Europe operations and the manufacturing and automotive industry practices, Virendra Aggarwal who steers Satyam’s operations for the rest of the world and Arvind Malhotra, who handles Satyam’s GE account.
AS Murty is understood to have kept himself out of this list. Under the sale agreement, it is binding on Tech Mahindra to retain 100 key employees of Satyam for a year, to ensure business continuity. The list of these 100 employees was furnished to the Pune-based IT firm in the information pack on Satyam, ahead of the due diligence.
“The list includes all the heads of vertical business units and horizontal competency units,” a source said. Top executives have been in Hyderabad for the past two days interacting with the Satyam management. “Other than the very senior people, Tech Mahindra doesn’t have any existing management they can loan to Satyam. It is a much smaller company and is confined to telecom. The telecom business is also very small for Satyam,” said the head of research of a broking firm.
As reported earlier by ET, Ram Mynampati, the interim chief executive officer of Satyam before the current CEO AS Murty took over, does not feature in the list of 100 key leaders. Mr Mynampati spearheads Satyam’s operations in the US and is also in-charge of the firm’s commercial and health business.
Tech Mahindra’s biggest challenge will be to trim Satyam’s employee strength and bring it on par with its business. Satyam has 48,000 employees, 80% of them working offshore and the remaining onsite. The offshore bench staff would be around 5,000, most of them with minimum experience. The company may save only around $4 million dollars if these jobs are axed. Around 5% of the onsite work force are unbillable.
HYDERABAD|MUMBAI: Tech Mahindra, the new owner of Satyam Computer Services, has decided to continue with the current management of the scam-hit firm for the transition period. Its priority is to focus on making Satyam’s business viable by halting customer attrition, boosting employee morale and leveraging the best practices of Satyam. “The plan is to work with the current management. The focus is more on governance and restoring customer confidence,” said a source close to Tech Mahindra. However, it will also soon name a chief financial officer, who may not be an insider. The CFO’s post had been vacant after S Vadlamani, the earlier CFO, quit.
Tech Mahindra will have its first official interaction with the Satyam board on Monday. All Satyam directors, senior Tech Mahindra officials and Anand Mahindra, chief of the Mahindra group, will take part in the Satyam board meeting in Hyderabad. Mahindra may also address all the vertical and process heads of Satyam and get an idea of the operations and business from the officials on the field.
The company was widely expected to announce its own man as CEO of Satyam, and the quiet and reserved Ulhas N Yargop, who heads the IT initiatives of the Mahindra group, was tipped to be the candidate. But, persons with knowledge of the situation told ET that the current Satyam management is set to continue during the transition phase.
According to highly-placed sources privy to the information, some of the key business leaders of Satyam who will be retained are TR Anand, who heads Satyam’s telecom business unit, Manish Mehta who spearheads the SAP practice, Keshab Panda who heads the Europe operations and the manufacturing and automotive industry practices, Virendra Aggarwal who steers Satyam’s operations for the rest of the world and Arvind Malhotra, who handles Satyam’s GE account.
AS Murty is understood to have kept himself out of this list. Under the sale agreement, it is binding on Tech Mahindra to retain 100 key employees of Satyam for a year, to ensure business continuity. The list of these 100 employees was furnished to the Pune-based IT firm in the information pack on Satyam, ahead of the due diligence.
“The list includes all the heads of vertical business units and horizontal competency units,” a source said. Top executives have been in Hyderabad for the past two days interacting with the Satyam management. “Other than the very senior people, Tech Mahindra doesn’t have any existing management they can loan to Satyam. It is a much smaller company and is confined to telecom. The telecom business is also very small for Satyam,” said the head of research of a broking firm.
As reported earlier by ET, Ram Mynampati, the interim chief executive officer of Satyam before the current CEO AS Murty took over, does not feature in the list of 100 key leaders. Mr Mynampati spearheads Satyam’s operations in the US and is also in-charge of the firm’s commercial and health business.
Tech Mahindra’s biggest challenge will be to trim Satyam’s employee strength and bring it on par with its business. Satyam has 48,000 employees, 80% of them working offshore and the remaining onsite. The offshore bench staff would be around 5,000, most of them with minimum experience. The company may save only around $4 million dollars if these jobs are axed. Around 5% of the onsite work force are unbillable.
Tech Mahindra, Satyam risky bets
20 Apr 2009, ET Bureau
Tech Mahindra is poised to join the top league of Indian IT exporters,offering a wide range of services across verticals, following its successful bid for Satyam Computer Services. But the takeover of the company at the center of India’s biggest corporate fraud to date also means big risk,particularly with the full impact of the scam yet unknown. This week, ET Intelligence Group finds out what the deal means for investors of both the companies and what should be their investment strategy going forward.
The deal offers the much-needed scale and breadth to Tech Mahindra’s existing operations. Currently, the company functions mostly as a single domain IT services company, with nearly two-third of its revenues coming from UK’s largest telecom services provider BT Group, which holds a 31% stake in Tech Mahindra. A specialised domain expertise can attract a premium . However, in the current turbulent times when the global telecom industry in general and BT in particular are passing through a rough patch, the single vertical strategy backfires.
Now, Satyam offers a wide spectrum of IT services and solutions for different verticals. By buying the company, Tech Mahindra gets access to full-services IT business serving clients like Cisco and Nestle. It can also almost triple its workforce by adding close to 48,000 skilled employees, acquiring the scale and size to compete with the likes of TCS and Infosys.
Big benefits, no doubt. But then, the risks and challenges are as big if not bigger. Satyam’s business has been in a mess after its founder and former chairman B Ramalinga Raju confessed to a more than Rs 7,000-crore financial fraud in early January. In the three months since then, the company is feared to have lost more than 15% of its revenues and some key clients and employees.
Winning back the trust of its clients and bagging new accounts may prove to be a big challenge for Tech Mahindra. The deal will also stretch Tech Mahindra’s balance sheet on two counts. The company has announced internal accruals of Rs 700 crore. It has to raise three times more the amount to cover the deal size of Rs 2,889 crore. Also, Satyam is fighting a number lawsuits and litigations from its overseas investors. Though the exact amount is not known, the total tab on this account may reach $1 billion or about Rs 5,000 crore.
Further, there is no clarity over the actual profitability and revenue potential of Satyam. If Satyam’s operating margin were really 3% as stated by its earlier management in its confession statement, the deal would pull down Tech Mahindra’s current profitability significantly.
All these factors make any investment decision in either company tricky. For Satyam, the takeover may reduce the exodus of clients and employees as the uncertainty about the company’s fate is over. If Tech Mahindra can successfully leverage Satyam’s talent pool and depth of its business verticals, this can become another turnaround story of India Inc. Also, the Satyam stock has already taken a lot of plundering in the last four months.
Tech Mahindra is currently trading at an earnings multiple (P/E) of 4.3, which is on the lower side compared to the P/E ratios of top IT companies. But still, there is a lot of risks, particularly with the company yet to restate its financials for the December 2008 and March 2009 quarter.
So, fresh investment in Satyam stock makes sense only for those who love to take risks. For shareholders of Tech Mahindra, the risk appears much higher as the takeover would drag its performance for next few years. It is likely to see a substantial increase in its liabilities and Satyam’s lawsuits would only make it worse.
Therefore, it would be a good strategy for Tech Mahindra shareholders to reduce their exposure to the counter. Fresh investment in the stock is advisable only for those who have a high-risk appetite and an investment horizon of two years or more
Tech Mahindra is poised to join the top league of Indian IT exporters,offering a wide range of services across verticals, following its successful bid for Satyam Computer Services. But the takeover of the company at the center of India’s biggest corporate fraud to date also means big risk,particularly with the full impact of the scam yet unknown. This week, ET Intelligence Group finds out what the deal means for investors of both the companies and what should be their investment strategy going forward.
The deal offers the much-needed scale and breadth to Tech Mahindra’s existing operations. Currently, the company functions mostly as a single domain IT services company, with nearly two-third of its revenues coming from UK’s largest telecom services provider BT Group, which holds a 31% stake in Tech Mahindra. A specialised domain expertise can attract a premium . However, in the current turbulent times when the global telecom industry in general and BT in particular are passing through a rough patch, the single vertical strategy backfires.
Now, Satyam offers a wide spectrum of IT services and solutions for different verticals. By buying the company, Tech Mahindra gets access to full-services IT business serving clients like Cisco and Nestle. It can also almost triple its workforce by adding close to 48,000 skilled employees, acquiring the scale and size to compete with the likes of TCS and Infosys.
Big benefits, no doubt. But then, the risks and challenges are as big if not bigger. Satyam’s business has been in a mess after its founder and former chairman B Ramalinga Raju confessed to a more than Rs 7,000-crore financial fraud in early January. In the three months since then, the company is feared to have lost more than 15% of its revenues and some key clients and employees.
Winning back the trust of its clients and bagging new accounts may prove to be a big challenge for Tech Mahindra. The deal will also stretch Tech Mahindra’s balance sheet on two counts. The company has announced internal accruals of Rs 700 crore. It has to raise three times more the amount to cover the deal size of Rs 2,889 crore. Also, Satyam is fighting a number lawsuits and litigations from its overseas investors. Though the exact amount is not known, the total tab on this account may reach $1 billion or about Rs 5,000 crore.
Further, there is no clarity over the actual profitability and revenue potential of Satyam. If Satyam’s operating margin were really 3% as stated by its earlier management in its confession statement, the deal would pull down Tech Mahindra’s current profitability significantly.
All these factors make any investment decision in either company tricky. For Satyam, the takeover may reduce the exodus of clients and employees as the uncertainty about the company’s fate is over. If Tech Mahindra can successfully leverage Satyam’s talent pool and depth of its business verticals, this can become another turnaround story of India Inc. Also, the Satyam stock has already taken a lot of plundering in the last four months.
Tech Mahindra is currently trading at an earnings multiple (P/E) of 4.3, which is on the lower side compared to the P/E ratios of top IT companies. But still, there is a lot of risks, particularly with the company yet to restate its financials for the December 2008 and March 2009 quarter.
So, fresh investment in Satyam stock makes sense only for those who love to take risks. For shareholders of Tech Mahindra, the risk appears much higher as the takeover would drag its performance for next few years. It is likely to see a substantial increase in its liabilities and Satyam’s lawsuits would only make it worse.
Therefore, it would be a good strategy for Tech Mahindra shareholders to reduce their exposure to the counter. Fresh investment in the stock is advisable only for those who have a high-risk appetite and an investment horizon of two years or more
Top 500 US firms' profits plunge 85% in 2008
20 Apr 2009
WASHINGTON: The top 500 US corporations saw their profits plunge 85 per cent in Top US firms' profits plunge 85% in 2008
2008, their worst showing in more than half a century, Fortune magazine reported on Sunday.
"The sumptuous profits America posted over the past few years weren't part of a new world order, but a bubble that, like the others, went out with a bang. And what a bang," the magazine reported in its latest issue.
"Last year was the worst economic performance in the 55-year history of the Fortune 500 list of America's biggest 500 companies," Fortune said.
"Earnings dropped 84.7 per cent from the previous year, from 645 billion dollars to 98.9 billion dollars, marking the largest one-year decline ever," it said.
"For every dollar in profits the 500 garnered in 2006, its members made 13 cents in 2008."
"The economy's fall was precipitous, leaving companies little time to adjust and pushing the 500 from the summit to something resembling an earnings depression," it said.
Unsurprisingly, the financial and automotive sectors were the worst hit, with the former reporting 214.3 billion dollars in losses, 99.3 billion of which came from one company - battered insurance group AIG.
In Fortune's latest annual listing of the top 500 US companies, energy and oil firms held three of the top four positions, led by ExxonMobil which snagged top spot from retail giant Wal-Mart. The retailer dropped to number two.
Chevron came in third followed by ConocoPhilipps and General Electric.
Automaker General Motors was sixth, despite being on the verge of bankruptcy, followed by Ford in seventh place.
AIG suffered the biggest drop in the standings, falling from 13th to 245th place.
Engineering firm URS was the biggest gainer, from 449th place last year to 264.
WASHINGTON: The top 500 US corporations saw their profits plunge 85 per cent in Top US firms' profits plunge 85% in 2008
2008, their worst showing in more than half a century, Fortune magazine reported on Sunday.
"The sumptuous profits America posted over the past few years weren't part of a new world order, but a bubble that, like the others, went out with a bang. And what a bang," the magazine reported in its latest issue.
"Last year was the worst economic performance in the 55-year history of the Fortune 500 list of America's biggest 500 companies," Fortune said.
"Earnings dropped 84.7 per cent from the previous year, from 645 billion dollars to 98.9 billion dollars, marking the largest one-year decline ever," it said.
"For every dollar in profits the 500 garnered in 2006, its members made 13 cents in 2008."
"The economy's fall was precipitous, leaving companies little time to adjust and pushing the 500 from the summit to something resembling an earnings depression," it said.
Unsurprisingly, the financial and automotive sectors were the worst hit, with the former reporting 214.3 billion dollars in losses, 99.3 billion of which came from one company - battered insurance group AIG.
In Fortune's latest annual listing of the top 500 US companies, energy and oil firms held three of the top four positions, led by ExxonMobil which snagged top spot from retail giant Wal-Mart. The retailer dropped to number two.
Chevron came in third followed by ConocoPhilipps and General Electric.
Automaker General Motors was sixth, despite being on the verge of bankruptcy, followed by Ford in seventh place.
AIG suffered the biggest drop in the standings, falling from 13th to 245th place.
Engineering firm URS was the biggest gainer, from 449th place last year to 264.
Saturday, April 18, 2009
Sebi to probe Tech Mahindra price spike
The Securities and Exchange Board of India (Sebi) is investigating the sharp increase in the Tech Mahindra scrip price, minutes before the official announcement of its winning bid for a controlling stake in Satyam.
Highly placed sources in the regulatory body said Sebi has asked stock exchanges to provide details of the buyers in the counter on Monday, when the Satyam board made the announcement.
On the Bombay Stock Exchange, Tech Mahindra’s share price went up by 21 per cent, from Rs 330 to Rs 398 between 11.31 am and 11.39 am. The Satyam board announced the winning bid at 11.56 am.
Sebi sources confirmed that the price movement was “unusual” on that day and needed to be investigated.
When contacted, Tech Mahindra said the company had not yet been approached by any regulatory authority. “However, we will assist the regulators in every way on the issue,” a spokesperson said.
Highly placed sources in the regulatory body said Sebi has asked stock exchanges to provide details of the buyers in the counter on Monday, when the Satyam board made the announcement.
On the Bombay Stock Exchange, Tech Mahindra’s share price went up by 21 per cent, from Rs 330 to Rs 398 between 11.31 am and 11.39 am. The Satyam board announced the winning bid at 11.56 am.
Sebi sources confirmed that the price movement was “unusual” on that day and needed to be investigated.
When contacted, Tech Mahindra said the company had not yet been approached by any regulatory authority. “However, we will assist the regulators in every way on the issue,” a spokesperson said.
US law firm open to settle Satyam case out of court
18 Apr 2009,ET Bureau
MUMBAI: US-based law firm Vianale and Vianale, which filed a class action suit on behalf of shareholders of Satyam’s ADR, has said it is open to an out-of-court settlement. The firm has claimed $500 million from Satyam and the former board directors of the company.
Kenneth Vianale said that once the Manhattan Court appoints a lead counsel for the case, it could explore the opportunity of settling the case outside of court, if the management of Satyam was willing. However, a Tech Mahindra official refused to comment stating it was too early to discuss this.
Lawyers are of the opinion that an out of court settlement might be a win-win situation for both parties as Satyam could ease off the legal liabilities against itself, while the ADS holders would not have to fight a long drawn battle.
“The American shareholders know that it may be not advantageous to prolong the case in the court and for Satyam too they would want to wrap up the case as quickly as possible to avoid any uncertainty on the liabilities of the company,” said Vyapak Desai, who leads Litigation and Dispute Resolution Practice at Nishith Desai Associates.
If the company is found guilty of the charges alleged by the US shareholders, the judgement passed by US courts might not be of much significance in India. “It would be very difficult to automatically enforce the US judgement in India as decree passed in India due to lack of reciprocity on enforcement of judgements between India and US,” said Mr. Desai.
While the US law firm maintains that Satyam is still liable to pay for damages, the company’s lawyers say that Satyam’s former board of directors and auditors are accountable for the fraud committed.
“The legal liabilities are complex. They will first fall on the promoters, the original board of directors and the auditors. Tech Mahindra shareholders of the company are not liable for the misdeeds of the promoters,” said Pallavi Shroff, partner at Amarchand & Mangaldas & Suresh A Shroff & Co.
The Company Law Board had on Thursday approved of the selection of Venturbay Consultants Private Limited, a subsidiary controlled by Tech Mahindra as the successful bidder to acquire a 51% controlling stake in the Company for Rs 2889 crore.
On January 7, 2009 Satyam’s promoter and CEO Ramalinga Raju had written to the Satyam Board of directors and Sebi stating that he had overstated Satyam’s financial accounts.
According to the letter, Raju admitted to having inflated the amount of cash on the company’s balance sheet by nearly $1 billion, incurring liability of $253 million on funds arranged by him personally and overstating Satyam’s September 2008 quarterly revenues by 76% and profits by 97%
MUMBAI: US-based law firm Vianale and Vianale, which filed a class action suit on behalf of shareholders of Satyam’s ADR, has said it is open to an out-of-court settlement. The firm has claimed $500 million from Satyam and the former board directors of the company.
Kenneth Vianale said that once the Manhattan Court appoints a lead counsel for the case, it could explore the opportunity of settling the case outside of court, if the management of Satyam was willing. However, a Tech Mahindra official refused to comment stating it was too early to discuss this.
Lawyers are of the opinion that an out of court settlement might be a win-win situation for both parties as Satyam could ease off the legal liabilities against itself, while the ADS holders would not have to fight a long drawn battle.
“The American shareholders know that it may be not advantageous to prolong the case in the court and for Satyam too they would want to wrap up the case as quickly as possible to avoid any uncertainty on the liabilities of the company,” said Vyapak Desai, who leads Litigation and Dispute Resolution Practice at Nishith Desai Associates.
If the company is found guilty of the charges alleged by the US shareholders, the judgement passed by US courts might not be of much significance in India. “It would be very difficult to automatically enforce the US judgement in India as decree passed in India due to lack of reciprocity on enforcement of judgements between India and US,” said Mr. Desai.
While the US law firm maintains that Satyam is still liable to pay for damages, the company’s lawyers say that Satyam’s former board of directors and auditors are accountable for the fraud committed.
“The legal liabilities are complex. They will first fall on the promoters, the original board of directors and the auditors. Tech Mahindra shareholders of the company are not liable for the misdeeds of the promoters,” said Pallavi Shroff, partner at Amarchand & Mangaldas & Suresh A Shroff & Co.
The Company Law Board had on Thursday approved of the selection of Venturbay Consultants Private Limited, a subsidiary controlled by Tech Mahindra as the successful bidder to acquire a 51% controlling stake in the Company for Rs 2889 crore.
On January 7, 2009 Satyam’s promoter and CEO Ramalinga Raju had written to the Satyam Board of directors and Sebi stating that he had overstated Satyam’s financial accounts.
According to the letter, Raju admitted to having inflated the amount of cash on the company’s balance sheet by nearly $1 billion, incurring liability of $253 million on funds arranged by him personally and overstating Satyam’s September 2008 quarterly revenues by 76% and profits by 97%
Tech Mahindra to firm up Satyam transition plan
18 Apr 2009, ET Bureau
HYDERABAD: Tech Mahindra, the new owner of Satyam Computer Services, is set to firm up transition plans, including employee retention, on Monday at a crucial board meeting of the beleaguered IT firm.
Four nominees of Tech Mahindra will be inducted into Satyam’s board, which now has six government nominees.
The government-appointed board selected Tech Mahindra as the new owner of Satyam, after the firm bid the highest at Rs 58 per share to acquire management control. The top priority for the new owner would be the formulation of a transition plan to ensure smooth takeover of Satyam’s operations. Anand Mahindra, chairman of Tech Mahindra, will address employees amid rising concern that the Pune-based IT services will axe jobs.
A board member at Satyam is reported to have said Tech Mahindra will have the right to retain or sack employees by virtue of being its new owner. Satyam has 48,000 employees on its rolls now.
The Pune-based IT services provider is also understood to be working on a 100-day plan to complete the integration process for Satyam. Tech Mahindra has proposed four nominees on the board including Vineet Nayyar, vice-chairman, managing director and chief executive officer; CP Gurnani, president (international operations); Sanjay Kalra, president (strategic initiatives) and Ulhas N Yargop, non-executive director on Tech Mahindra board.
The Company Law Board (CLB) on Wednesday approved the takeover of Satyam Computer Services by Tech Mahindra for the deal at Rs 58 / share that the company bid through auction.
Tech Mahindra would have to pay Rs 1,756 crore for acquiring 31% stake in Satyam Computer and deposit the requisite escrow amount of Rs 1,133 crore for the 20% open offer in a separate account on or before April 21. The aggregate amount for 51% stake in Satyam is Rs 2,889 crore.
The Pune-based company is a JV between Mahindra & Mahindra (M&M) and British Telecommunications. Tech Mahindra is the sixth-largest software exporter and second-largest Telecom Software Provider in India.
HYDERABAD: Tech Mahindra, the new owner of Satyam Computer Services, is set to firm up transition plans, including employee retention, on Monday at a crucial board meeting of the beleaguered IT firm.
Four nominees of Tech Mahindra will be inducted into Satyam’s board, which now has six government nominees.
The government-appointed board selected Tech Mahindra as the new owner of Satyam, after the firm bid the highest at Rs 58 per share to acquire management control. The top priority for the new owner would be the formulation of a transition plan to ensure smooth takeover of Satyam’s operations. Anand Mahindra, chairman of Tech Mahindra, will address employees amid rising concern that the Pune-based IT services will axe jobs.
A board member at Satyam is reported to have said Tech Mahindra will have the right to retain or sack employees by virtue of being its new owner. Satyam has 48,000 employees on its rolls now.
The Pune-based IT services provider is also understood to be working on a 100-day plan to complete the integration process for Satyam. Tech Mahindra has proposed four nominees on the board including Vineet Nayyar, vice-chairman, managing director and chief executive officer; CP Gurnani, president (international operations); Sanjay Kalra, president (strategic initiatives) and Ulhas N Yargop, non-executive director on Tech Mahindra board.
The Company Law Board (CLB) on Wednesday approved the takeover of Satyam Computer Services by Tech Mahindra for the deal at Rs 58 / share that the company bid through auction.
Tech Mahindra would have to pay Rs 1,756 crore for acquiring 31% stake in Satyam Computer and deposit the requisite escrow amount of Rs 1,133 crore for the 20% open offer in a separate account on or before April 21. The aggregate amount for 51% stake in Satyam is Rs 2,889 crore.
The Pune-based company is a JV between Mahindra & Mahindra (M&M) and British Telecommunications. Tech Mahindra is the sixth-largest software exporter and second-largest Telecom Software Provider in India.
Tech Mahindra raises Rs 600 crore debt
18 Apr 2009, PTI
MUMBAI: Software firm Tech Mahindra, which needs to pay Rs 1,756 crore by April 21 for acquisition of a 31 per cent stake in scam-hit Satyam Computer, on Saturday said it has raised Rs 600 crore of debt through issuance of bonds.
It alloted 6000 non-convertible debentures (NCDs) of face value of Rs 10 lakh each, aggregating to Rs 600 crore on April 17, the company said in a filing to the Bombay Stock Exchange.
Earlier this week, Tech Mahindra through its arm Venturbay Consultants won the race to acquire controlling stake in beleaguered IT firm Satyam Computer.
The government-appointed board of Satyam had given its approval for the acquisition of a 31 per cent stake by the Tech Mahindra for Rs 1,756 crore. The deal has also been approved by the Company Law Board, which has also asked Tech Mahindra to make the payment by April 21.
Besides, Tech Mahindra would make an open offer at Rs 58 a share for a further 20 per cent from investors.
Tech Mahindra, in which BT Group Plc owns 31 per cent, would pay an aggregate of about Rs 2,889 crore for a 51 per cent stake in Satyam.
The Company Law Board (CLB) on Thursday approved takeover of Satyam by Tech Mahindra for a deal of Rs 58 per share which the company bid through auction.
On Friday, shares of Tech Mahindra closed down by 4.26 per cent at Rs 334.85 on the BSE.
MUMBAI: Software firm Tech Mahindra, which needs to pay Rs 1,756 crore by April 21 for acquisition of a 31 per cent stake in scam-hit Satyam Computer, on Saturday said it has raised Rs 600 crore of debt through issuance of bonds.
It alloted 6000 non-convertible debentures (NCDs) of face value of Rs 10 lakh each, aggregating to Rs 600 crore on April 17, the company said in a filing to the Bombay Stock Exchange.
Earlier this week, Tech Mahindra through its arm Venturbay Consultants won the race to acquire controlling stake in beleaguered IT firm Satyam Computer.
The government-appointed board of Satyam had given its approval for the acquisition of a 31 per cent stake by the Tech Mahindra for Rs 1,756 crore. The deal has also been approved by the Company Law Board, which has also asked Tech Mahindra to make the payment by April 21.
Besides, Tech Mahindra would make an open offer at Rs 58 a share for a further 20 per cent from investors.
Tech Mahindra, in which BT Group Plc owns 31 per cent, would pay an aggregate of about Rs 2,889 crore for a 51 per cent stake in Satyam.
The Company Law Board (CLB) on Thursday approved takeover of Satyam by Tech Mahindra for a deal of Rs 58 per share which the company bid through auction.
On Friday, shares of Tech Mahindra closed down by 4.26 per cent at Rs 334.85 on the BSE.
Raju paid income tax on non-existent FD interest
18 Apr 2009, ET Bureau
NEW DELHI: Satyam Computer Services’ disgraced founder B Ramalinga Raju had transferred the company’s fictitious wealth, running into hundreds of crores, from several current accounts to fake fixed deposits in banks and also paid income tax on the imaginary interest earned, the Serious Fraud Investigation Office (SFIO) findings have revealed. The move was aimed to give the company’s fictitious earnings a transparent look.
SFIO, which on Monday (April 13) submitted its final report on the Satyam financial scandal to government, has said the beleaguered software major paid tax on imaginary interest on fixed deposits that were non-existent. The investigating authorities reasoned that the idea behind the move was to show that fake earnings, as shown in its accounts, are clean.
“The idea behind such fund transfers was to highlight a prudent business practice wherein companies usually move their money, if kept in current accounts, to fixed deposit accounts so as to yield a higher rate of interest,” a government official, on condition of anonymity, told ET.
For this offence, SFIO has found Raju guilty under various sections of the Indian Penal Code including 409, which talks of breach of trust. Apart from Ramalinga Raju, SFIO has levelled allegations against two more company executives apart from Price Waterhouse’s S Gopalakrishnan and Srinivas Talluri. The official said while the first four have been found being directly involved, PW’s auditors are guilty of ‘gross negligence’.
According to agency reports, the investigating agency has concluded that independent directors of Satyam were not involved in the multi-crore accounting fraud in the IT company and were kept in the dark by founder-chairman B Ramalinga Raju.
NEW DELHI: Satyam Computer Services’ disgraced founder B Ramalinga Raju had transferred the company’s fictitious wealth, running into hundreds of crores, from several current accounts to fake fixed deposits in banks and also paid income tax on the imaginary interest earned, the Serious Fraud Investigation Office (SFIO) findings have revealed. The move was aimed to give the company’s fictitious earnings a transparent look.
SFIO, which on Monday (April 13) submitted its final report on the Satyam financial scandal to government, has said the beleaguered software major paid tax on imaginary interest on fixed deposits that were non-existent. The investigating authorities reasoned that the idea behind the move was to show that fake earnings, as shown in its accounts, are clean.
“The idea behind such fund transfers was to highlight a prudent business practice wherein companies usually move their money, if kept in current accounts, to fixed deposit accounts so as to yield a higher rate of interest,” a government official, on condition of anonymity, told ET.
For this offence, SFIO has found Raju guilty under various sections of the Indian Penal Code including 409, which talks of breach of trust. Apart from Ramalinga Raju, SFIO has levelled allegations against two more company executives apart from Price Waterhouse’s S Gopalakrishnan and Srinivas Talluri. The official said while the first four have been found being directly involved, PW’s auditors are guilty of ‘gross negligence’.
According to agency reports, the investigating agency has concluded that independent directors of Satyam were not involved in the multi-crore accounting fraud in the IT company and were kept in the dark by founder-chairman B Ramalinga Raju.
Satyam paid I-T on imaginary interest: SFIO
18 Apr 2009, ET Bureau
NEW DELHI: Satyam Computer Services disgraced founder B Ramalinga Raju had transferred its fictitious wealth running into hundreds of crores from several current accounts to fake fixed deposits in banks and also paid income tax on the imaginary interest so earned, the Serious Fraud Investigation Office findings have revealed.
The move was aimed to give the company’s fictitiously shown earnings a transparent look. The Serious Fraud Investigation Office (SFIO), which on Monday submitted before the government its final report on the Satyam financial scandal, has said that the beleaguered software major paid income tax on imaginary interest on fixed deposits which were non-existant.
The investigating authorities reason that the idea behind the move was to show that fake earnings, as shown in its books of accounts, are clean.
“The idea behind such fund transfers was to highlight a prudent business practice wherein companies usually move their money, if kept in current accounts, to fixed deposit accounts so as to yield a higher rate of interest,” a government official, on condition of anonymity, told ET.
For this offence, the SFIO has found Raju guilty under various section of the Indian Penal Code including 409, which talks of breach of trust. Apart from Ramalinga Raju, the SFIO has levelled allegations against two more company executives apart from Price Waterhouse’s S Gopalakrishnan and Srinivas Talluri. The official said that while the first four have been found to be directly involved, PW’s auditors’ are guilty of ‘gross negligence’.
During the investigation into the case, the SFIO, income-tax department and capital markets regulator Sebi have individually contacted Satyam’s bankers to check the veracity of the deposit receipts which the company had with them.
Satyam had earlier claimed that it had fixed deposits with Citi Bank, HDFC Bank, BNP Paribas and HSBC. The investigating authorities had found some glaring errors in the confirmation letters that were issued by the banks, with some fixed deposit receipts found to be carrying false authorised signatures.
Though, the SFIO found traces of siphoning of funds, the report has not levelled any allegations as the matter is being probed by other agencies. The investigation, however, states that the company had raised fictitious export invoices worth Rs 5,057 crore, the official said.
NEW DELHI: Satyam Computer Services disgraced founder B Ramalinga Raju had transferred its fictitious wealth running into hundreds of crores from several current accounts to fake fixed deposits in banks and also paid income tax on the imaginary interest so earned, the Serious Fraud Investigation Office findings have revealed.
The move was aimed to give the company’s fictitiously shown earnings a transparent look. The Serious Fraud Investigation Office (SFIO), which on Monday submitted before the government its final report on the Satyam financial scandal, has said that the beleaguered software major paid income tax on imaginary interest on fixed deposits which were non-existant.
The investigating authorities reason that the idea behind the move was to show that fake earnings, as shown in its books of accounts, are clean.
“The idea behind such fund transfers was to highlight a prudent business practice wherein companies usually move their money, if kept in current accounts, to fixed deposit accounts so as to yield a higher rate of interest,” a government official, on condition of anonymity, told ET.
For this offence, the SFIO has found Raju guilty under various section of the Indian Penal Code including 409, which talks of breach of trust. Apart from Ramalinga Raju, the SFIO has levelled allegations against two more company executives apart from Price Waterhouse’s S Gopalakrishnan and Srinivas Talluri. The official said that while the first four have been found to be directly involved, PW’s auditors’ are guilty of ‘gross negligence’.
During the investigation into the case, the SFIO, income-tax department and capital markets regulator Sebi have individually contacted Satyam’s bankers to check the veracity of the deposit receipts which the company had with them.
Satyam had earlier claimed that it had fixed deposits with Citi Bank, HDFC Bank, BNP Paribas and HSBC. The investigating authorities had found some glaring errors in the confirmation letters that were issued by the banks, with some fixed deposit receipts found to be carrying false authorised signatures.
Though, the SFIO found traces of siphoning of funds, the report has not levelled any allegations as the matter is being probed by other agencies. The investigation, however, states that the company had raised fictitious export invoices worth Rs 5,057 crore, the official said.
10% of Satyam staff redundant: Karnik
18 Apr 2009, ET Bureau
NEW DELHI: Up to 10% of Satyam Computer Services’ workforce could be redundant as its founder may have hired excess staff to hide the financial fraud at the firm, the chairman of the company’s government-appointed board, Kiran Karnik, told ET on Friday.
Mr Karnik said about 3,000-5,000 staff were in excess, over and above the normal bench maintained at IT firms. Satyam has about 48,000 employees on its rolls. “It is for the board to decide and the board will be Tech Mahindra. I am very clear that we (the government-appointed board) are in a transition mode and we should be out soon,” Mr Karnik said, ruling out any government intervention to protect employees.
There were three ways to deal with excess staff, downsizing being one of them. The company could also get more business to correct the mismatch or cut salaries, he added.
“These are all very obvious measures. The Mahindras is very respected group like the Tatas, and I have full confidence they will take the right steps,” Mr Karnik said. A TechM official said in response to an e-mail from ET: “We would like to state that the Satyam management will do everything in its power to grow the business”.
Satyam’s disgraced promoter, Ramalinga Raju, had admitted that employees were hired in excess of what was required to support the falsified inflated revenue and profit figures. Tech Mahindra will have to protect the employment of 100 key Satyam staff under the terms of the acquisition. These employees have already been identified. Tech Mahindra, which will very soon be the new owner of Satyam, is at liberty to terminate the employment of other staff.
Mr Karnik said the government-appointed board has had no discussions with Tech Mahindra on this issue. “Tech Mahindra still has to complete a few more steps before it becomes the owner. It is yet to deposit money into the account,” he said.
Tech Mahindra has to deposit Rs 1,756 crore for acquisition of a 31% equity stake in Satyam in an escrow account by April 21. Thereafter, Tech Mahindra’s board appointees will work with the government-appointed board to work out the transition.
Tech Mahindra, which has about half the number of Satyam employees, emerged as the highest bidder for the tainted IT services firm on Monday. The Mahindra & Mahindra group firm has also received approval from the Company Law Board for the takeover.
NEW DELHI: Up to 10% of Satyam Computer Services’ workforce could be redundant as its founder may have hired excess staff to hide the financial fraud at the firm, the chairman of the company’s government-appointed board, Kiran Karnik, told ET on Friday.
Mr Karnik said about 3,000-5,000 staff were in excess, over and above the normal bench maintained at IT firms. Satyam has about 48,000 employees on its rolls. “It is for the board to decide and the board will be Tech Mahindra. I am very clear that we (the government-appointed board) are in a transition mode and we should be out soon,” Mr Karnik said, ruling out any government intervention to protect employees.
There were three ways to deal with excess staff, downsizing being one of them. The company could also get more business to correct the mismatch or cut salaries, he added.
“These are all very obvious measures. The Mahindras is very respected group like the Tatas, and I have full confidence they will take the right steps,” Mr Karnik said. A TechM official said in response to an e-mail from ET: “We would like to state that the Satyam management will do everything in its power to grow the business”.
Satyam’s disgraced promoter, Ramalinga Raju, had admitted that employees were hired in excess of what was required to support the falsified inflated revenue and profit figures. Tech Mahindra will have to protect the employment of 100 key Satyam staff under the terms of the acquisition. These employees have already been identified. Tech Mahindra, which will very soon be the new owner of Satyam, is at liberty to terminate the employment of other staff.
Mr Karnik said the government-appointed board has had no discussions with Tech Mahindra on this issue. “Tech Mahindra still has to complete a few more steps before it becomes the owner. It is yet to deposit money into the account,” he said.
Tech Mahindra has to deposit Rs 1,756 crore for acquisition of a 31% equity stake in Satyam in an escrow account by April 21. Thereafter, Tech Mahindra’s board appointees will work with the government-appointed board to work out the transition.
Tech Mahindra, which has about half the number of Satyam employees, emerged as the highest bidder for the tainted IT services firm on Monday. The Mahindra & Mahindra group firm has also received approval from the Company Law Board for the takeover.
Maytas has no land bank, claims govt
New Delhi April 18, 2009
Mulls action against E&Y for ‘incorrect valuation’; company claims it has agreements with land-owners.
The government said it may take action against global audit and consulting firm Ernst & Young (E&Y) for not properly valuing Maytas Properties Ltd, a company promoted by Satyam Computer’s former promoter B Ramalinga Raju, according to a senior official in the Ministry of Corporate Affairs (MCA).
This follows findings of an independent investigation by the government that the Hyderabad-based real estate firm did not have a land bank, though the company claims it holds the right to develop land through agreements with land-owners, which is the same thing.
The government recently appointed one nominee director on Maytas Properties’ four-member board. Unlisted Maytas Properties is run by B Rama Raju Jr, the younger son of Ramalinga Raju. It is one of the two companies — the other being Maytas Infrastructure — that Satyam Computer Services controversially proposed to acquire in December. The proposal was withdrawn after objections from shareholders. The company was evaluated by E&Y at Rs 6,523 crore. The company had said it possessed a land bank of 6,800 acres.
“Contrary to what it claimed, the company has no land bank,” said the ministry official. “On what basis did E&Y do the valuation? Action can be taken against the audit firm for doing untrue valuation,” he added.
Another person closely monitoring Maytas Properties confirmed that the firm has no land bank. “Had they had it (referring to land bank), then the problems that are there today would not have happened,” he added.
The government is yet to decide which agency will take action against E&Y. The MCA official declined to comment on this. Asked about the government’s claims, E&Y in a statement said the valuation services provided were conducted in accordance with the applicable professional standards. “We are confident of the quality of our work,” the audit firm said.
The audit firm’s statement explained that Maytas Properties or its subsidiaries either owned land or had land development rights on a perpetual basis, practices common in the Indian real estate industry.
“When conducting the valuation, land as well as the perpetual development rights were considered and this has been stated in our report as well,” E&Y’s statement said.
Describing the government official’s claims as “untrue and baseless”, a Maytas Properties official told Business Standard, “Under government norms, no property developer can hold hundreds or thousands of acres under its fold nor can it register them in its name. Holding land to that extent as a long-term asset for years together is not a viable proposition either.”
He went on to explain that it is standard practice for developers to have development agreements under which the land-owner cannot sell his land to any other entity or individual.
“As and when the realty firm proposes a new project, the land will developed and the revenues generated from the project shared between the company and the land-owner, in accordance with the agreement. Maytas Properties also follows this model,” the official said.
Earlier, E&Y had told Business Standard that it did not audit the SPV (special purpose vehicle) or subsidiary companies of Maytas
Properties. It also denied valuating Maytas Properties for the Satyam-Maytas transaction.
Ernst & Young was engaged by a law firm in an unrelated context to undertake a valuation of Maytas Properties, as required under the guidelines of the Reserve Bank of India, for a proposed share transaction involving existing shareholders of Maytas Properties.
Last month, the government appointed Ved Jain, former president of the Institute of Chartered Accountants of India, on Maytas Properties’ board following an order by the Company Law Board in this regard after government investigations found a nexus between Satyam Computer and Maytas Properties and Maytas Infra. Maytas Infra, a listed entity, has four government-nominated directors on its board.
Mulls action against E&Y for ‘incorrect valuation’; company claims it has agreements with land-owners.
The government said it may take action against global audit and consulting firm Ernst & Young (E&Y) for not properly valuing Maytas Properties Ltd, a company promoted by Satyam Computer’s former promoter B Ramalinga Raju, according to a senior official in the Ministry of Corporate Affairs (MCA).
This follows findings of an independent investigation by the government that the Hyderabad-based real estate firm did not have a land bank, though the company claims it holds the right to develop land through agreements with land-owners, which is the same thing.
The government recently appointed one nominee director on Maytas Properties’ four-member board. Unlisted Maytas Properties is run by B Rama Raju Jr, the younger son of Ramalinga Raju. It is one of the two companies — the other being Maytas Infrastructure — that Satyam Computer Services controversially proposed to acquire in December. The proposal was withdrawn after objections from shareholders. The company was evaluated by E&Y at Rs 6,523 crore. The company had said it possessed a land bank of 6,800 acres.
“Contrary to what it claimed, the company has no land bank,” said the ministry official. “On what basis did E&Y do the valuation? Action can be taken against the audit firm for doing untrue valuation,” he added.
Another person closely monitoring Maytas Properties confirmed that the firm has no land bank. “Had they had it (referring to land bank), then the problems that are there today would not have happened,” he added.
The government is yet to decide which agency will take action against E&Y. The MCA official declined to comment on this. Asked about the government’s claims, E&Y in a statement said the valuation services provided were conducted in accordance with the applicable professional standards. “We are confident of the quality of our work,” the audit firm said.
The audit firm’s statement explained that Maytas Properties or its subsidiaries either owned land or had land development rights on a perpetual basis, practices common in the Indian real estate industry.
“When conducting the valuation, land as well as the perpetual development rights were considered and this has been stated in our report as well,” E&Y’s statement said.
Describing the government official’s claims as “untrue and baseless”, a Maytas Properties official told Business Standard, “Under government norms, no property developer can hold hundreds or thousands of acres under its fold nor can it register them in its name. Holding land to that extent as a long-term asset for years together is not a viable proposition either.”
He went on to explain that it is standard practice for developers to have development agreements under which the land-owner cannot sell his land to any other entity or individual.
“As and when the realty firm proposes a new project, the land will developed and the revenues generated from the project shared between the company and the land-owner, in accordance with the agreement. Maytas Properties also follows this model,” the official said.
Earlier, E&Y had told Business Standard that it did not audit the SPV (special purpose vehicle) or subsidiary companies of Maytas
Properties. It also denied valuating Maytas Properties for the Satyam-Maytas transaction.
Ernst & Young was engaged by a law firm in an unrelated context to undertake a valuation of Maytas Properties, as required under the guidelines of the Reserve Bank of India, for a proposed share transaction involving existing shareholders of Maytas Properties.
Last month, the government appointed Ved Jain, former president of the Institute of Chartered Accountants of India, on Maytas Properties’ board following an order by the Company Law Board in this regard after government investigations found a nexus between Satyam Computer and Maytas Properties and Maytas Infra. Maytas Infra, a listed entity, has four government-nominated directors on its board.
Maytas Infra board holds talks with banks, IL&FS
18 Apr 2009,
HYDERABAD: The board of Maytas Infra Limited met here on Friday under the chairmanship of K Ramalingam, and Anil K Agarwal, O P Vaish and Ved Jain all government-nominated directors along with Teja Raju, vice-chairman and whole-time director and B Narasimha Rao, the whole-time director, according to a company release.
The board had extensive discussions on the business plan, orders in hand and under execution. More importantly, it also had discussions with bankers as well as the chairman of IL&FS Infrastructure Leasing and Financial Services (IL&FS), Ravi Parthasarathy, amid reports that it appears set to take over Maytas Infra soon. Interestingly, IL&FS owns a 37% stake in Maytas Infra. The acquisition could be through the creeping route or through open public offer. It may be recalled that the Company Law Board (CLB) decided on February 27 not to allow IL&FS even a board representation saying that there was an inherent conflict of interest in it being both a significant shareholder in the company and a significant creditor. IL&FS was also a competitor as it sought to promote projects in which it held an equity stake, the CLB had observed. However, the CLB decided to appoint four independent directors and left it to them to decide the fate of the beleagured company.
Further, according to reports, IL&FS wanted to work out a solution for Maytas Infra as it led a consortium of around 19 banks and financial institutions which lent Maytas Infra Rs 5,000 crore and had partnered others in several major Maytas projects including the Hyderabad Metro.
The board is also reported to be working on the appointment of a CEO and has formed the project management committee under the chairmanship of Ramalingam. The board after detailed discussions with each of the business heads and senior officials of the company has put a plan of action together so as to ensure timely execution of the orders, added the release.
HYDERABAD: The board of Maytas Infra Limited met here on Friday under the chairmanship of K Ramalingam, and Anil K Agarwal, O P Vaish and Ved Jain all government-nominated directors along with Teja Raju, vice-chairman and whole-time director and B Narasimha Rao, the whole-time director, according to a company release.
The board had extensive discussions on the business plan, orders in hand and under execution. More importantly, it also had discussions with bankers as well as the chairman of IL&FS Infrastructure Leasing and Financial Services (IL&FS), Ravi Parthasarathy, amid reports that it appears set to take over Maytas Infra soon. Interestingly, IL&FS owns a 37% stake in Maytas Infra. The acquisition could be through the creeping route or through open public offer. It may be recalled that the Company Law Board (CLB) decided on February 27 not to allow IL&FS even a board representation saying that there was an inherent conflict of interest in it being both a significant shareholder in the company and a significant creditor. IL&FS was also a competitor as it sought to promote projects in which it held an equity stake, the CLB had observed. However, the CLB decided to appoint four independent directors and left it to them to decide the fate of the beleagured company.
Further, according to reports, IL&FS wanted to work out a solution for Maytas Infra as it led a consortium of around 19 banks and financial institutions which lent Maytas Infra Rs 5,000 crore and had partnered others in several major Maytas projects including the Hyderabad Metro.
The board is also reported to be working on the appointment of a CEO and has formed the project management committee under the chairmanship of Ramalingam. The board after detailed discussions with each of the business heads and senior officials of the company has put a plan of action together so as to ensure timely execution of the orders, added the release.
Maytas - optimistic about the company's future.
Maytas Infra Ltd. Friday said its government-appointed board is optimistic about the company's future.
The board, which met Friday, is working to appoint a chief executive, Maytas said in a statement.
Maytas Infra is one of two companies that were controlled by the family of the founders of Satyam Computer Services Ltd. (500376.BY), which is being probed for financial irregularities.
K. Ramalingam, a former chairman of the state-run Airports Authority of India, is the chairman of the Maytas board.
Other board members include Anil. K. Agarwal, former president of industry lobby group Associated Chambers of Commerce and Industry; O.P. Vaish, a corporate lawyer; and Ved Jain, former president of the Institute of Chartered Accountants of India, or ICAI.
The board also held discussions with the Maytas' bankers and IL&FS Financial Services Ltd. Chairman Ravi Parthasarathy, the statement added.
IL&FS last month raised its stake in Maytas Infra to 14.5% stake.
The board, which met Friday, is working to appoint a chief executive, Maytas said in a statement.
Maytas Infra is one of two companies that were controlled by the family of the founders of Satyam Computer Services Ltd. (500376.BY), which is being probed for financial irregularities.
K. Ramalingam, a former chairman of the state-run Airports Authority of India, is the chairman of the Maytas board.
Other board members include Anil. K. Agarwal, former president of industry lobby group Associated Chambers of Commerce and Industry; O.P. Vaish, a corporate lawyer; and Ved Jain, former president of the Institute of Chartered Accountants of India, or ICAI.
The board also held discussions with the Maytas' bankers and IL&FS Financial Services Ltd. Chairman Ravi Parthasarathy, the statement added.
IL&FS last month raised its stake in Maytas Infra to 14.5% stake.
Friday, April 17, 2009
Ex-insider blew the lid off Satyam scam
17 Apr 2009, ET Bureau
NEW DELHI: The shocking disclosure of the Rs 7,000-crore plus scam that nearly brought down Satyam Computer Services may have been announced to the world by its disgraced founder, but it now transpires that B Ramalinga Raju’s confession was prompted by whistleblower action.
A person who used a pseudonym of Jose Abraham, and claimed himself to be a former senior executive in Satyam involved with its contract with the World Bank, acted as the whistleblower whose email to a Satyam board member triggered a chain of events that culminated in erstwhile chairman Mr Raju’s decision to confess to the financial crime.
These revelations form part of a 14,000-page report submitted by the Serious Fraud Investigation Office (SFIO) to the government earlier this week, which estimated the scale of the Satyam scandal to be Rs 7,333 crore as of end-September last year.
Mr Abraham, who is understood to have used a pseudonym is his e-mails, had first written to the company’s independent director Krishna G Palepu on December 18, 2008 that Satyam did not have any liquid assets, and this fact could be independently confirmed from its banks, an official, who is privy to the confidential SFIO report told ET.
The email was sent a day after Mr Raju was forced to abort Satyam’s plans to buy two companies linked to his family, Maytas Infra and Maytas Properties, after it ran into a storm of investor protest.
The email sent to Mr Palepu spread quickly among the Satyam’s former board members, with Mr Palepu first forwarding the email to M Rammohan Rao, another independent director in the company, the official said. Mr Rao thereafter forwarded the email to other board members VS Raju and TR Prasad, Satyam’s statutory auditor S Gopalakrishnan of Price Waterhouse.
A copy of the email was also sent to B Ramalinga Raju, who had started receving calls from members of the board’s audit committee, but did not respond to any of them. The SFIO report says Mr Raju held meetings with company’s CFO and vice-president for finance G Ramakrishna, between last December 25 and January 7 to work out a plan to hide the fraud.
Failing to find a way out and concerned that he might be caught by capital market regulator SEBI and the US Securities Exchange Commission (SEC), Mr Raju issued his sensational confession in which he admitted to have cooked Satyam’s books for years, bringing the company to the brink of collapse.
NEW DELHI: The shocking disclosure of the Rs 7,000-crore plus scam that nearly brought down Satyam Computer Services may have been announced to the world by its disgraced founder, but it now transpires that B Ramalinga Raju’s confession was prompted by whistleblower action.
A person who used a pseudonym of Jose Abraham, and claimed himself to be a former senior executive in Satyam involved with its contract with the World Bank, acted as the whistleblower whose email to a Satyam board member triggered a chain of events that culminated in erstwhile chairman Mr Raju’s decision to confess to the financial crime.
These revelations form part of a 14,000-page report submitted by the Serious Fraud Investigation Office (SFIO) to the government earlier this week, which estimated the scale of the Satyam scandal to be Rs 7,333 crore as of end-September last year.
Mr Abraham, who is understood to have used a pseudonym is his e-mails, had first written to the company’s independent director Krishna G Palepu on December 18, 2008 that Satyam did not have any liquid assets, and this fact could be independently confirmed from its banks, an official, who is privy to the confidential SFIO report told ET.
The email was sent a day after Mr Raju was forced to abort Satyam’s plans to buy two companies linked to his family, Maytas Infra and Maytas Properties, after it ran into a storm of investor protest.
The email sent to Mr Palepu spread quickly among the Satyam’s former board members, with Mr Palepu first forwarding the email to M Rammohan Rao, another independent director in the company, the official said. Mr Rao thereafter forwarded the email to other board members VS Raju and TR Prasad, Satyam’s statutory auditor S Gopalakrishnan of Price Waterhouse.
A copy of the email was also sent to B Ramalinga Raju, who had started receving calls from members of the board’s audit committee, but did not respond to any of them. The SFIO report says Mr Raju held meetings with company’s CFO and vice-president for finance G Ramakrishna, between last December 25 and January 7 to work out a plan to hide the fraud.
Failing to find a way out and concerned that he might be caught by capital market regulator SEBI and the US Securities Exchange Commission (SEC), Mr Raju issued his sensational confession in which he admitted to have cooked Satyam’s books for years, bringing the company to the brink of collapse.
Finance dept, not HRD, managed Satyam payroll
17 Apr 2009, ET Bureau
HYDERABAD: The payroll at tainted Satyam Computer Services was managed entirely by its finance department, while the IT firm's human resources department only maintained the data base of its associates on SAP human resources network (SHINE).
Payroll was not run on SHINE, according to evidences provided to key investigating agencies probing the scam. These evidences are set to form the basis for the next phase of the investigation by the Central Bureau of Investigation (CBI), that is probing the recruitment process.
The role of Satyam's erstwhile finance team has come in the spotlight after the firm’s disgraced founder confessed to perpetrating the Rs 7,000-crore financial fraud. The CBI reckons that Raju began an aggressive recruitment of employees to justify the inflated revenues. The finance department connived with Raju to inflate sales by generating fake invoices in the invoice management system to show non-existent sales of Rs 5,117 crore. The average inflated sales was around 18%, according to the chargesheet filed by the CBI.
The agency has begun scrutinising the expenditure of Satyam to assess the quantum of money that went into paying salaries on bloated workforce.
Satyam has around 48,000 employees and investigating agencies have found validated this count. The HR department apparently had access control rights to SHINE, while the finance and a few other departments were able to view the data. The finance department was provided with information on addition of new associates, resignation of existing ones and changes in the pay structure. But the payroll was processed on a system that the finance department had developed independently.
A new associate had to open a bank account in a designated bank and the account number was shared with both the HR and the payroll.
The payroll was made by a statutory compliance team. But, doubts are being raised, if the details of employees, who quit the firm, were deleted from the payroll.
HYDERABAD: The payroll at tainted Satyam Computer Services was managed entirely by its finance department, while the IT firm's human resources department only maintained the data base of its associates on SAP human resources network (SHINE).
Payroll was not run on SHINE, according to evidences provided to key investigating agencies probing the scam. These evidences are set to form the basis for the next phase of the investigation by the Central Bureau of Investigation (CBI), that is probing the recruitment process.
The role of Satyam's erstwhile finance team has come in the spotlight after the firm’s disgraced founder confessed to perpetrating the Rs 7,000-crore financial fraud. The CBI reckons that Raju began an aggressive recruitment of employees to justify the inflated revenues. The finance department connived with Raju to inflate sales by generating fake invoices in the invoice management system to show non-existent sales of Rs 5,117 crore. The average inflated sales was around 18%, according to the chargesheet filed by the CBI.
The agency has begun scrutinising the expenditure of Satyam to assess the quantum of money that went into paying salaries on bloated workforce.
Satyam has around 48,000 employees and investigating agencies have found validated this count. The HR department apparently had access control rights to SHINE, while the finance and a few other departments were able to view the data. The finance department was provided with information on addition of new associates, resignation of existing ones and changes in the pay structure. But the payroll was processed on a system that the finance department had developed independently.
A new associate had to open a bank account in a designated bank and the account number was shared with both the HR and the payroll.
The payroll was made by a statutory compliance team. But, doubts are being raised, if the details of employees, who quit the firm, were deleted from the payroll.
CBI corroborates Raju's version of Satyam fraud
17 Apr 2009, PTI
NEW DELHI: Satyam founder Ramalinga Raju was honest at least about his dishonest dealings, with CBI finding that balance sheets were inflated by Rs 5,020 crore - almost the same amount disclosed by the former IT posterboy.
CBI, in its chargesheet, said it found that books were first inflated in fiscal 2001-02. As against the projected cash and bank balances of Rs 5,160 crore by the end of second quarter of 2008 in the balance sheets of the company, the actual cash and bank balance was only Rs 139 crore, thereby reflecting a gap of Rs 5,020 crore.
Satyam had been maintaining deposit and current accounts with as many as 15 scheduled banks over the years and CBI, with the help of chartered accountants, had prepared a comparative picture of cash balances in current account, money parked in fixed deposits as shown in the balance sheet and the actual cash available in the current account and the money available in the FDRs.
"Thus, it is revealed that huge amounts of cash and bank balances were fraudulently and dishonestly reflected in the balance sheets of SCSL (Satyam) by the accused, where only very less amounts of cash and bank balances were actually available," the CBI said in the chargesheet filed earlier this month against Raju and eight others.
Raju, in a letter to Satyam's board on January 7, had mentioned that the balance sheet as of September 2008 carried non-existent cash and bank balances to the tune of Rs 5,040 crore.
"Thus, the investigation established that the balance sheets for the second quarter of 2008 had non-existent cash and bank balances to the tune of Rs 5,020 crore. Similarly, the non-existent cash and bank balances fraudulently and dishonestly reflected by the accused in the balance sheets during the previous years are also established," the CBI chargesheet said.
It alleged that the current account balances in Bank of Baroda, New York branch, alone reflected Rs 3,319 crore in Satyam Computer accounts raising the total cash and bank balances become to Rs 5,103 crore.
However, the actual cash and bank balances available at the end of second quarter of last fiscal were only Rs 61 crore, making the difference as Rs 5,042 crore, it alleged.
NEW DELHI: Satyam founder Ramalinga Raju was honest at least about his dishonest dealings, with CBI finding that balance sheets were inflated by Rs 5,020 crore - almost the same amount disclosed by the former IT posterboy.
CBI, in its chargesheet, said it found that books were first inflated in fiscal 2001-02. As against the projected cash and bank balances of Rs 5,160 crore by the end of second quarter of 2008 in the balance sheets of the company, the actual cash and bank balance was only Rs 139 crore, thereby reflecting a gap of Rs 5,020 crore.
Satyam had been maintaining deposit and current accounts with as many as 15 scheduled banks over the years and CBI, with the help of chartered accountants, had prepared a comparative picture of cash balances in current account, money parked in fixed deposits as shown in the balance sheet and the actual cash available in the current account and the money available in the FDRs.
"Thus, it is revealed that huge amounts of cash and bank balances were fraudulently and dishonestly reflected in the balance sheets of SCSL (Satyam) by the accused, where only very less amounts of cash and bank balances were actually available," the CBI said in the chargesheet filed earlier this month against Raju and eight others.
Raju, in a letter to Satyam's board on January 7, had mentioned that the balance sheet as of September 2008 carried non-existent cash and bank balances to the tune of Rs 5,040 crore.
"Thus, the investigation established that the balance sheets for the second quarter of 2008 had non-existent cash and bank balances to the tune of Rs 5,020 crore. Similarly, the non-existent cash and bank balances fraudulently and dishonestly reflected by the accused in the balance sheets during the previous years are also established," the CBI chargesheet said.
It alleged that the current account balances in Bank of Baroda, New York branch, alone reflected Rs 3,319 crore in Satyam Computer accounts raising the total cash and bank balances become to Rs 5,103 crore.
However, the actual cash and bank balances available at the end of second quarter of last fiscal were only Rs 61 crore, making the difference as Rs 5,042 crore, it alleged.
Thursday, April 16, 2009
Satyam 'weeping orphan' adopted by Tech Mahindra: CLB
Press Trust of India / New Delhi April 16, 2009
Calling Satyam a "weeping orphan", the Company Law Board (CLB) today said the Hyderabad-based company will now be adopted and nurtured by Venturbay, a subsidiary of Tech Mahindra.
Preferring to call its order as "Adoption of Orphan Satyam" or "Orphan Satyam Adopted", CLB Chairman S Balasubramanian said, having won various laurels, mostly in relation to corporate governance, Satyam "became a weeping orphan overnight when its promoter B Ramalinga Raju abandoned it after making a confessional statement."
Satyam's founder Raju abandoned the company after admitting accounting fraud to the tune of over Rs 7,000 crore on January 7, said the CLB order while clearing the decks for takeover of the company by Tech Mahindra.
Complementing the government-nominated board for selecting a technically and financial competent strategic investor, the CLB chief said, Venturbay will "adopt and nurture ailing Satyam."
Earlier, the order said, the government reconstituted the Satyam board "to wipe out its (Satyam's) tears and nurture the company which was necessary in the interest of all the stake holders".
The government-appointed board headed by Nasscom past president Kiran Karnik, the order said, "acted not only as directors but also like foster fathers to heal the wounds of the orphaned Satyam."
-----------------------------
Calling Satyam a "weeping orphan", the Company Law Board (CLB) today said the Hyderabad-based company will now be adopted and nurtured by Venturbay, a subsidiary of Tech Mahindra.
Preferring to call its order as "Adoption of Orphan Satyam" or "Orphan Satyam Adopted", CLB Chairman S Balasubramanian said, having won various laurels, mostly in relation to corporate governance, Satyam "became a weeping orphan overnight when its promoter B Ramalinga Raju abandoned it after making a confessional statement."
Satyam's founder Raju abandoned the company after admitting accounting fraud to the tune of over Rs 7,000 crore on January 7, said the CLB order while clearing the decks for takeover of the company by Tech Mahindra.
Complementing the government-nominated board for selecting a technically and financial competent strategic investor, the CLB chief said, Venturbay will "adopt and nurture ailing Satyam."
Earlier, the order said, the government reconstituted the Satyam board "to wipe out its (Satyam's) tears and nurture the company which was necessary in the interest of all the stake holders".
The government-appointed board headed by Nasscom past president Kiran Karnik, the order said, "acted not only as directors but also like foster fathers to heal the wounds of the orphaned Satyam."
-----------------------------
CBI probes recruitment process at Satyam
16 Apr 2009, ET Bureau
HYDERABAD: The Central Bureau of Investigation (CBI) has started probing the recruitment process at Satyam Computer Services over the past seven years, even as it validated the software firm’s employee count in its charge-sheet filed in a local court.
Going by the chargesheet, the disgraced founder of Satyam B Ramalinga Raju, his brother B Rama Raju and their chief financial officer Srinivas Vadlamani falsified the loading factor of the employees.
The loading factor refers to the actual number of employees on the rolls of the company who are working on projects that generate revenue. In September 2008, Satyam had reported a loading factor of 75% as against the actual 62% for offshore employees. In technical parlance, it meant that 40% of the employees were on the bench, waiting to be assigned to projects. For onsite employees, the bench staff was around 5%, according to the chargesheet.
Satyam, which has found a new owner, has 48,000 employees on its rolls now.
“Raju was inflating revenues over the last several years. He began aggressive recruitment of employees to justify inflated revenues. The CBI will assess the money that went into paying salaries on over-bloated staff,” said a senior official, who did not wish to be named.
According to him, investors were cheated in the process, as they could have got higher dividends had Raju not carried the baggage. “We will verify each item of expenditure during this phase of investigation to see if money found its way out of Satyam,” the official said.
The chargesheet is based on Raju’s confession statement, besides 432 evidences. The CBI has proof that Raju inflated sales by generating false invoices between April 2003 and December 2008 to meet its guidance issued every quarter.
HYDERABAD: The Central Bureau of Investigation (CBI) has started probing the recruitment process at Satyam Computer Services over the past seven years, even as it validated the software firm’s employee count in its charge-sheet filed in a local court.
Going by the chargesheet, the disgraced founder of Satyam B Ramalinga Raju, his brother B Rama Raju and their chief financial officer Srinivas Vadlamani falsified the loading factor of the employees.
The loading factor refers to the actual number of employees on the rolls of the company who are working on projects that generate revenue. In September 2008, Satyam had reported a loading factor of 75% as against the actual 62% for offshore employees. In technical parlance, it meant that 40% of the employees were on the bench, waiting to be assigned to projects. For onsite employees, the bench staff was around 5%, according to the chargesheet.
Satyam, which has found a new owner, has 48,000 employees on its rolls now.
“Raju was inflating revenues over the last several years. He began aggressive recruitment of employees to justify inflated revenues. The CBI will assess the money that went into paying salaries on over-bloated staff,” said a senior official, who did not wish to be named.
According to him, investors were cheated in the process, as they could have got higher dividends had Raju not carried the baggage. “We will verify each item of expenditure during this phase of investigation to see if money found its way out of Satyam,” the official said.
The chargesheet is based on Raju’s confession statement, besides 432 evidences. The CBI has proof that Raju inflated sales by generating false invoices between April 2003 and December 2008 to meet its guidance issued every quarter.
Timeline of events surrounding Satyam Computer
Apr 2009
MUMBAI: The following is the timeline of events surrounding Satyam Computer Services since its founder B Ramalinga Raju made an abortive bid to make the company acquire two family enterprises, raising questions on corporate governance, followed by his admission to perpetrating India's biggest corporate fraud:
Dec 16, 2008 - Satyam announces plan to buy two realty firms part-owned by its founders for $1.6 billion, but does a U-turn after negative investor fallout
Dec 18 - Satyam board plans to meet Dec 29 to consider a share buyback to restore confidence.
Dec 23 - Satyam barred from business with the World Bank for eight years for providing bank staff with "improper benefits".
Dec 26 - Mangalam Srinivasan, an independent director, resigns.
Dec 29 - Three more directors quit.
Jan 7, 2009 - Raju resigns saying the company's profits had been inflated.
Jan 8 - Chief financial officer (CFO) Vadlamani Srinivas resigns.
Jan 9 - Andhra Pradesh police arrest Raju and his brother and former company managing director B Rama Raju on charges of cheating and forgery.
Jan 10 - Finance head Srinivas arrested.
Jan 11 - The central government reconstitutes Satyam board.
Jan 14 - Deloitte, KPMG named new joint auditors for Satyam.
Jan 14 - Satyam's former auditor, PricewaterhouseCoopers (PwC), says its opinion on the IT firm's financials may be rendered "inaccurate and unreliable".
Jan 19 - The government orders probe into possible "nexus" between the fraud-hit Satyam and Raju's two family-run firms Maytas Properties and Maytas Infrastructure.
Jan 21 - Ramalinga Raju confesses diverting Satyam funds to the Maytas firms.
Jan 23 - The Raju brothers, Srinivas sent to judicial custody till Jan 31.
Jan 23 - Court rejects SEBI plea to record statements of Raju brothers.
Jan 24 - Former Satyam auditor PWC's S. Gopalakrishnan and Srinivas Talluri arrested.
Jan 27 - The board appoints Goldman Sachs and Avendus, an Indian investment bank, to identify strategic investors.
Jan 31 - A Hyderabad court extends judicial custody of all accused to Feb 7.
Feb 3 - The Supreme Court allows SEBI to grill the Rajus.
Feb 5 - Satyam gets Rs.600 crore ($130 million) from banks to meet working capital requirements. A.S. Murty appointed new CEO.
Feb 6 - Former Nasscom chairman Kiran Karnik appointed Satyam chairman.
Feb 7 - Court extends the judicial custody of Ramalinga Raju and four other accused to Feb 21.
Feb 10 - Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy writes to Prime Minister Manmohan Singh, seeking a Central Bureau of Investigation (CBI) probe into the fraud.
Feb 13 - SEBI relaxes takeover norms for Satyam, giving their reconstituted boards the power to lower the target price for open offers.
Feb 14 - The Serious Fraud Investigation Office (SFIO) joins probe.
Feb 16 - The central government hands over investigations to the CBI.
Feb 21 - The government-appointed board, meeting for the seventh time, decides to invite strategic investors.
March 6 - Satyam gets permission from SEBI to sell 51 percent majority stake.
March 9 - The court allows CBI to take custody of Raju brothers, Srinivas and sacked PWC auditors Gopalakrishnan and Talluri Srinivas.
March 13 - L&T, Tech Mahindra, Spice Group and US outsourcer iGate Corp say they have registered as potential bidders.
March 13 - The company appoints former chief justice S.P. Bharucha to oversee the bidding, selection process.
March 20 - The board receives bids. iGate Corp says it will not bid.
March 27 - Spice Group says it will not proceed as it has not got the desired level of transparency.
April 7 - CBI files a 2,315 page chargesheet against the Raju brothers and seven other accused.
April 13 - Tech Mahindra selected as strategic investor.
MUMBAI: The following is the timeline of events surrounding Satyam Computer Services since its founder B Ramalinga Raju made an abortive bid to make the company acquire two family enterprises, raising questions on corporate governance, followed by his admission to perpetrating India's biggest corporate fraud:
Dec 16, 2008 - Satyam announces plan to buy two realty firms part-owned by its founders for $1.6 billion, but does a U-turn after negative investor fallout
Dec 18 - Satyam board plans to meet Dec 29 to consider a share buyback to restore confidence.
Dec 23 - Satyam barred from business with the World Bank for eight years for providing bank staff with "improper benefits".
Dec 26 - Mangalam Srinivasan, an independent director, resigns.
Dec 29 - Three more directors quit.
Jan 7, 2009 - Raju resigns saying the company's profits had been inflated.
Jan 8 - Chief financial officer (CFO) Vadlamani Srinivas resigns.
Jan 9 - Andhra Pradesh police arrest Raju and his brother and former company managing director B Rama Raju on charges of cheating and forgery.
Jan 10 - Finance head Srinivas arrested.
Jan 11 - The central government reconstitutes Satyam board.
Jan 14 - Deloitte, KPMG named new joint auditors for Satyam.
Jan 14 - Satyam's former auditor, PricewaterhouseCoopers (PwC), says its opinion on the IT firm's financials may be rendered "inaccurate and unreliable".
Jan 19 - The government orders probe into possible "nexus" between the fraud-hit Satyam and Raju's two family-run firms Maytas Properties and Maytas Infrastructure.
Jan 21 - Ramalinga Raju confesses diverting Satyam funds to the Maytas firms.
Jan 23 - The Raju brothers, Srinivas sent to judicial custody till Jan 31.
Jan 23 - Court rejects SEBI plea to record statements of Raju brothers.
Jan 24 - Former Satyam auditor PWC's S. Gopalakrishnan and Srinivas Talluri arrested.
Jan 27 - The board appoints Goldman Sachs and Avendus, an Indian investment bank, to identify strategic investors.
Jan 31 - A Hyderabad court extends judicial custody of all accused to Feb 7.
Feb 3 - The Supreme Court allows SEBI to grill the Rajus.
Feb 5 - Satyam gets Rs.600 crore ($130 million) from banks to meet working capital requirements. A.S. Murty appointed new CEO.
Feb 6 - Former Nasscom chairman Kiran Karnik appointed Satyam chairman.
Feb 7 - Court extends the judicial custody of Ramalinga Raju and four other accused to Feb 21.
Feb 10 - Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy writes to Prime Minister Manmohan Singh, seeking a Central Bureau of Investigation (CBI) probe into the fraud.
Feb 13 - SEBI relaxes takeover norms for Satyam, giving their reconstituted boards the power to lower the target price for open offers.
Feb 14 - The Serious Fraud Investigation Office (SFIO) joins probe.
Feb 16 - The central government hands over investigations to the CBI.
Feb 21 - The government-appointed board, meeting for the seventh time, decides to invite strategic investors.
March 6 - Satyam gets permission from SEBI to sell 51 percent majority stake.
March 9 - The court allows CBI to take custody of Raju brothers, Srinivas and sacked PWC auditors Gopalakrishnan and Talluri Srinivas.
March 13 - L&T, Tech Mahindra, Spice Group and US outsourcer iGate Corp say they have registered as potential bidders.
March 13 - The company appoints former chief justice S.P. Bharucha to oversee the bidding, selection process.
March 20 - The board receives bids. iGate Corp says it will not bid.
March 27 - Spice Group says it will not proceed as it has not got the desired level of transparency.
April 7 - CBI files a 2,315 page chargesheet against the Raju brothers and seven other accused.
April 13 - Tech Mahindra selected as strategic investor.
Raju was riding a toothless tiger
14 Apr 2009, ET Bureau
HYDERABAD: In the January 7 letter in which he confessed that Satyam Computer Services’ account books were a work of fiction, B Ramalinga Raju wrote that carrying on with the deceit was “like riding a tiger, not knowing how to get off without being eaten”.
Those who knew the Satyam founder well said he had mounted the beast when it was just a cub. In the early 1990s, a former close associate of Mr Raju was stunned by a tax demand for selling shares of Satyam that he purportedly held.
“I was flabbergasted because I didn’t own a single share in the company,” he said. A few casual inquiries later it became obvious to him that several of his acquaintances were in the same position—being asked to pay tax for shares they didn’t own or sell. “It became pretty clear to me then that Satyam shares were being bought and sold benami. Knowing Mr Raju as well as I did, I saw his fingerprints all over the operation,” he added.
Son of an affluent grape farmer, Mr Raju ran textile and construction firms before he converted his hobby, software, into a business. Satyam was established in 1987 and it went public in 1991. The same year, Satyam became the first Indian company to provide offshore services to a client through a satellite connection. In the mid-90s, Mr Raju saw a big opportunity in providing information through IT networks.
Satyam Infoway (later renamed Sify), was born in 1995. At the turn of the century, Mr Raju was riding a full-grown tiger. He was being lionised in his home state Andhra Pradesh and was even seated alongside Bill Clinton when the then US president visited Hyderabad.
The same year provided the first visible signs that he was slipping. Shareholders reacted with outrage after discovering that 8 lakh Satyam shares had been transferred to Ramalinga Raju’s brother-in-law Srini Raju at Rs 10 per share while the stock was quoting at over Rs 1,500. Mr Raju got the benefit of doubt and escaped almost unscathed. Two years later, he was booked by the government for a series of alleged financial irregularities but that probe too petered out.
Over the next few years, Satyam made a series of small acquisitions and showed outlandish growth, posting revenues of $2 billion at the end of March 2008. On December 16 that year, Mr Raju proposed that Satyam should buy Maytas construction and real estate firms run by his sons for $1.6 billion. A few days after furious investors had had their say, Mr Raju came up with the tiger metaphor.
After over three months in police and judicial custody, Mr Raju has not deviated from his confession and investigators have yet been unable to establish money was siphoned out of Satyam. Maytas Infra and Maytas Properties have been spared a full investigation and key members of Mr Raju’s family suspected of involvement in the fraud remain untouched.
Mr Raju, it seems, was only riding a toothless tiger.
HYDERABAD: In the January 7 letter in which he confessed that Satyam Computer Services’ account books were a work of fiction, B Ramalinga Raju wrote that carrying on with the deceit was “like riding a tiger, not knowing how to get off without being eaten”.
Those who knew the Satyam founder well said he had mounted the beast when it was just a cub. In the early 1990s, a former close associate of Mr Raju was stunned by a tax demand for selling shares of Satyam that he purportedly held.
“I was flabbergasted because I didn’t own a single share in the company,” he said. A few casual inquiries later it became obvious to him that several of his acquaintances were in the same position—being asked to pay tax for shares they didn’t own or sell. “It became pretty clear to me then that Satyam shares were being bought and sold benami. Knowing Mr Raju as well as I did, I saw his fingerprints all over the operation,” he added.
Son of an affluent grape farmer, Mr Raju ran textile and construction firms before he converted his hobby, software, into a business. Satyam was established in 1987 and it went public in 1991. The same year, Satyam became the first Indian company to provide offshore services to a client through a satellite connection. In the mid-90s, Mr Raju saw a big opportunity in providing information through IT networks.
Satyam Infoway (later renamed Sify), was born in 1995. At the turn of the century, Mr Raju was riding a full-grown tiger. He was being lionised in his home state Andhra Pradesh and was even seated alongside Bill Clinton when the then US president visited Hyderabad.
The same year provided the first visible signs that he was slipping. Shareholders reacted with outrage after discovering that 8 lakh Satyam shares had been transferred to Ramalinga Raju’s brother-in-law Srini Raju at Rs 10 per share while the stock was quoting at over Rs 1,500. Mr Raju got the benefit of doubt and escaped almost unscathed. Two years later, he was booked by the government for a series of alleged financial irregularities but that probe too petered out.
Over the next few years, Satyam made a series of small acquisitions and showed outlandish growth, posting revenues of $2 billion at the end of March 2008. On December 16 that year, Mr Raju proposed that Satyam should buy Maytas construction and real estate firms run by his sons for $1.6 billion. A few days after furious investors had had their say, Mr Raju came up with the tiger metaphor.
After over three months in police and judicial custody, Mr Raju has not deviated from his confession and investigators have yet been unable to establish money was siphoned out of Satyam. Maytas Infra and Maytas Properties have been spared a full investigation and key members of Mr Raju’s family suspected of involvement in the fraud remain untouched.
Mr Raju, it seems, was only riding a toothless tiger.
Wednesday, April 15, 2009
Satyam Sends Tech Mahindra Proposal to India Board
BANGALORE -- The board of Satyam Computer Services Ltd. Wednesday sent Tech Mahindra Ltd.'s proposal to buy a controlling stake in the beleaguered company to the Company Law Board, a person familiar with the development said.
"The proposal has been sent. Satyam expects an approval very soon," the person, who asked not to be named, told Dow Jones Newswires.
Earlier Monday, Satyam named a unit of Tech Mahindra the highest bidder for a controlling stake.
Venturbay Consultants Pvt. Ltd., a special purpose vehicle set up for the stake buy, will pay 17.56 billion ($354.7 million) for 302.76 million Satyam shares, or a 31% stake, at 58 rupees per share, Satyam said.
The deal needs to be approved by the Company Law Board, a semi-judicial authority.
Company Law Board Chairman S. Balasubramanian said Monday the agency will rule on the deal within 24 hours of receiving the recommendation from Satyam's board.
Satyam has been in turmoil since founder B. Ramalinga Raju revealed in January that he had overstated the company's profits over several years and created a fictitious cash balance of more than $1 billion
"The proposal has been sent. Satyam expects an approval very soon," the person, who asked not to be named, told Dow Jones Newswires.
Earlier Monday, Satyam named a unit of Tech Mahindra the highest bidder for a controlling stake.
Venturbay Consultants Pvt. Ltd., a special purpose vehicle set up for the stake buy, will pay 17.56 billion ($354.7 million) for 302.76 million Satyam shares, or a 31% stake, at 58 rupees per share, Satyam said.
The deal needs to be approved by the Company Law Board, a semi-judicial authority.
Company Law Board Chairman S. Balasubramanian said Monday the agency will rule on the deal within 24 hours of receiving the recommendation from Satyam's board.
Satyam has been in turmoil since founder B. Ramalinga Raju revealed in January that he had overstated the company's profits over several years and created a fictitious cash balance of more than $1 billion
Satyam @ Tech Mahindra: A bailout or sound acquisition?
15 Apr 2009,
Much has been written about the speed and effectiveness with which the government-appointed board restored systemic confidence by finding a suitor for Satyam. There is no doubt in this regard as also the fact that most constituencies (employees, IT industry, government, markets, overseas investors and politicians) will find this outcome laudable.
Even after a day, I am still unclear about the possible motivations behind the almost seemingly desperate attempt by Tech Mahindra to snap up Satyam. Its bidding price of Rs 58 was almost three times that of the bid of the only other “dispassionate” bidder, Wilbur Ross, at Rs 20 per share.
L&T’s bid at Rs 45.90 is not quite relevant as its interest in this deal arose primarily out of its need to salvage its reputation dented by its previous indiscretion in a poor market transaction. If Tech Mahindra’s sole intention was to diversify its revenue streams and buy scale, surely it could have considered many “untainted” companies which are available in the current depressed environment and are screaming buys on the valuation front, both in India and the rest of the world.
The primary interest of any acquirer in such transactions is predicated on the basis of three criteria: full clarity on the financial position, demonstrated continuing customer commitment and, consequently, a reasonable view of its revenue/ profitability projections in the medium term.
Satyam does not fulfill any of these criteria . Continuing customer commitment can only be gauged after existing IT projects are completed, and a post-scam time-frame of three months is too early to judge this factor. In fact, if reports are to be believed, roughly $200 million worth of customer commitments have reduced per month for the last four months!
The fact that TM does not have vertical expertise in non-telecom areas will surely not help matters on this front. Free cash flow and profitability do not exist at the moment for the company. Additionally, the issue of undetermined liabilities arising out of class action suits and Upaid litigation needs no reiteration.
The fourth component of any such transaction is the ability of the acquirer to manage the acquisition. In this case, this would imply additionally managing a ‘turnaround’ as well. Does TM have this capability? Though Vineet Nayyar and his team have a reputation for working as a close-knit team, they are more known for their deal making strengths rather than effecting complex turnarounds.
Though TM has grown under their guidance at a much faster rate that what MBT managed over the 18-odd years prior to that, it is a fact that the concentration of BT revenues is still about 60% and the companies’ success in growing the non-BT business has been limited. Satyam will test the turnaround capability of the management to its hilt in all its aspects.
A hands-off owner expecting to run the company with a very similar senior management team which ran Satyam with Raju will have serious, and unanticipated, consequences detrimental to the interests of customers and investors. From my understanding of the management bandwidth at TM, which runs as a very tightly run ship, there are not enough members of the top management team who would be able to spare time to directly oversee and manage operating challenges on a day-to-day basis at Satyam.
The fifth issue is of financing: despite the claimed operating cash flow of Rs 700 cr, the transaction would still require taking significant leverage on TM’s balance sheet to fund the Rs 3,000 cr needed for the acquisition . In this environment of constrained credit markets, the cost of raising this capital will be prohibitive either in terms of interest on debt or dilution in case of a private equity placement. Is this desirable?
Maybe it is desirable but only if available at firesale prices. And this is what I find most surprising: TM has valued Satyam at a revenue multiple of approximately 1x which is largely similar to, or in many cases, more than the market multiples of established global IT players in the current environment. Just as a data point, Accenture quotes at 0.6x and CSC at 0.35x trailing twelve months price to sales.
It is no surprise that despite all the media hype, no serious bidder emerged for Satyam in the last weeks. This includes the likes of IBM, CSC, Cognizant, Accenture and the prudently run, large Indian IT services providers like Infosys, Wipro and TCS.
And given that the timing of the deal coincides with the first phase of elections two days later in Andhra Pradesh, perhaps the desperation to conclude the deal makes sense only if viewed as a bailout provided to the UPA in general, and the Congress leadership in AP, in particular.
And what about TM? Given M&M’s ageold linkages with the political dispensation, the quid pro quo could emerge post-elections either in terms of defence contracts or telecom regulations to facilitate BT’s entry in telecom services. Or indeed, in an extreme scenario where future contracts and employees are slowly transferred to TM with Satyam being relegated to a shell company with all the attendant litigation risks.
Who knows? Only time will tell. Or the stock price movements and the non-promoter shareholding pattern of TM after the initial euphoria blows over.
(The author is a Sloan Fellow from the London Business School, CEO of Diptish Investments and Fund Advisors and the former Group CFO of Polaris Software)
Much has been written about the speed and effectiveness with which the government-appointed board restored systemic confidence by finding a suitor for Satyam. There is no doubt in this regard as also the fact that most constituencies (employees, IT industry, government, markets, overseas investors and politicians) will find this outcome laudable.
Even after a day, I am still unclear about the possible motivations behind the almost seemingly desperate attempt by Tech Mahindra to snap up Satyam. Its bidding price of Rs 58 was almost three times that of the bid of the only other “dispassionate” bidder, Wilbur Ross, at Rs 20 per share.
L&T’s bid at Rs 45.90 is not quite relevant as its interest in this deal arose primarily out of its need to salvage its reputation dented by its previous indiscretion in a poor market transaction. If Tech Mahindra’s sole intention was to diversify its revenue streams and buy scale, surely it could have considered many “untainted” companies which are available in the current depressed environment and are screaming buys on the valuation front, both in India and the rest of the world.
The primary interest of any acquirer in such transactions is predicated on the basis of three criteria: full clarity on the financial position, demonstrated continuing customer commitment and, consequently, a reasonable view of its revenue/ profitability projections in the medium term.
Satyam does not fulfill any of these criteria . Continuing customer commitment can only be gauged after existing IT projects are completed, and a post-scam time-frame of three months is too early to judge this factor. In fact, if reports are to be believed, roughly $200 million worth of customer commitments have reduced per month for the last four months!
The fact that TM does not have vertical expertise in non-telecom areas will surely not help matters on this front. Free cash flow and profitability do not exist at the moment for the company. Additionally, the issue of undetermined liabilities arising out of class action suits and Upaid litigation needs no reiteration.
The fourth component of any such transaction is the ability of the acquirer to manage the acquisition. In this case, this would imply additionally managing a ‘turnaround’ as well. Does TM have this capability? Though Vineet Nayyar and his team have a reputation for working as a close-knit team, they are more known for their deal making strengths rather than effecting complex turnarounds.
Though TM has grown under their guidance at a much faster rate that what MBT managed over the 18-odd years prior to that, it is a fact that the concentration of BT revenues is still about 60% and the companies’ success in growing the non-BT business has been limited. Satyam will test the turnaround capability of the management to its hilt in all its aspects.
A hands-off owner expecting to run the company with a very similar senior management team which ran Satyam with Raju will have serious, and unanticipated, consequences detrimental to the interests of customers and investors. From my understanding of the management bandwidth at TM, which runs as a very tightly run ship, there are not enough members of the top management team who would be able to spare time to directly oversee and manage operating challenges on a day-to-day basis at Satyam.
The fifth issue is of financing: despite the claimed operating cash flow of Rs 700 cr, the transaction would still require taking significant leverage on TM’s balance sheet to fund the Rs 3,000 cr needed for the acquisition . In this environment of constrained credit markets, the cost of raising this capital will be prohibitive either in terms of interest on debt or dilution in case of a private equity placement. Is this desirable?
Maybe it is desirable but only if available at firesale prices. And this is what I find most surprising: TM has valued Satyam at a revenue multiple of approximately 1x which is largely similar to, or in many cases, more than the market multiples of established global IT players in the current environment. Just as a data point, Accenture quotes at 0.6x and CSC at 0.35x trailing twelve months price to sales.
It is no surprise that despite all the media hype, no serious bidder emerged for Satyam in the last weeks. This includes the likes of IBM, CSC, Cognizant, Accenture and the prudently run, large Indian IT services providers like Infosys, Wipro and TCS.
And given that the timing of the deal coincides with the first phase of elections two days later in Andhra Pradesh, perhaps the desperation to conclude the deal makes sense only if viewed as a bailout provided to the UPA in general, and the Congress leadership in AP, in particular.
And what about TM? Given M&M’s ageold linkages with the political dispensation, the quid pro quo could emerge post-elections either in terms of defence contracts or telecom regulations to facilitate BT’s entry in telecom services. Or indeed, in an extreme scenario where future contracts and employees are slowly transferred to TM with Satyam being relegated to a shell company with all the attendant litigation risks.
Who knows? Only time will tell. Or the stock price movements and the non-promoter shareholding pattern of TM after the initial euphoria blows over.
(The author is a Sloan Fellow from the London Business School, CEO of Diptish Investments and Fund Advisors and the former Group CFO of Polaris Software)
Tech Mahindra raises $175 mn of debt: Sources
15 Apr 2009, REUTERS
MUMBAI: Indian software services group Tech Mahindra, which is awaiting regulatory approval to buy Satyam Computer Services, has raised $175 million through bonds and commercial paper, sources said on Wednesday.
It sold Rs 600 crore ($120 million) of four- and five-year bonds carrying a coupon rate of 10.25 percent at face value and Rs 275 crore of one-year commercial paper with a coupon rate of 8.50 percent, the sources told reporters.
Kotak Mahindra Bank was the sole arranger to the issues, Tech Mahindra's first for 2009.
The funds raised are equivalent to nearly one third of the total potential cost of a controlling stake in fraud-hit Satyam.
Top-rated five-year corporate bond yields were quoting around 7.89-7.97 percent, according to a note from broker Derivium Capital. Analysts said the pricing was adequate given they presumed the proceeds would be used to fund the Satyam deal and needed to be raised quickly.
Tech Mahindra will pay $351 million for a 31 percent preferential allotment of new shares in Satyam and will make an open offer for a further 20 percent of the fraud-hit company at a cost of up to around $225 million.
A Tech Mahindra spokesman declined comment when asked if the company planned to sell more debt, although last month it got ratings for planned bonds and short-term debt worth Rs 950 crore and bank facilities worth Rs 535 crore.
CASH, DEBT
Bharat Doshi, chief financial officer at parent Mahindra and Mahindra, said on Monday the firm had more than Rs 700 crore of cash and the potential to raise debt, for which it had already received firm underwritten commitments, to fund the Satyam deal.
Based on cash holdings and the deal value, Tech Mahindra may have to raise debt of about Rs 2,100 crore.
Indian rating agency CARE last month assigned its top 'AAA' and 'PR1-plus' ratings to Tech Mahindra's planned issues.
But Fitch Ratings withdrew its ratings on Tech Mahindra last month, citing uncertainties of the financing of the Satyam deal.
D.R. Dogra, deputy managing director of CARE, said its ratings factored in all issues relating to the Satyam deal, and said developments were being closely watched.
"Certainly we are keeping our eyes and ears open because this is a very high rating. But so far there is nothing in our eyes that can change the kind of rating that we have given the company at this stage," Dogra said.
Tech Mahindra posted net profit of Rs 223 core on net sales of Rs 1,132 crore for the quarter ended Dec. 31.
MUMBAI: Indian software services group Tech Mahindra, which is awaiting regulatory approval to buy Satyam Computer Services, has raised $175 million through bonds and commercial paper, sources said on Wednesday.
It sold Rs 600 crore ($120 million) of four- and five-year bonds carrying a coupon rate of 10.25 percent at face value and Rs 275 crore of one-year commercial paper with a coupon rate of 8.50 percent, the sources told reporters.
Kotak Mahindra Bank was the sole arranger to the issues, Tech Mahindra's first for 2009.
The funds raised are equivalent to nearly one third of the total potential cost of a controlling stake in fraud-hit Satyam.
Top-rated five-year corporate bond yields were quoting around 7.89-7.97 percent, according to a note from broker Derivium Capital. Analysts said the pricing was adequate given they presumed the proceeds would be used to fund the Satyam deal and needed to be raised quickly.
Tech Mahindra will pay $351 million for a 31 percent preferential allotment of new shares in Satyam and will make an open offer for a further 20 percent of the fraud-hit company at a cost of up to around $225 million.
A Tech Mahindra spokesman declined comment when asked if the company planned to sell more debt, although last month it got ratings for planned bonds and short-term debt worth Rs 950 crore and bank facilities worth Rs 535 crore.
CASH, DEBT
Bharat Doshi, chief financial officer at parent Mahindra and Mahindra, said on Monday the firm had more than Rs 700 crore of cash and the potential to raise debt, for which it had already received firm underwritten commitments, to fund the Satyam deal.
Based on cash holdings and the deal value, Tech Mahindra may have to raise debt of about Rs 2,100 crore.
Indian rating agency CARE last month assigned its top 'AAA' and 'PR1-plus' ratings to Tech Mahindra's planned issues.
But Fitch Ratings withdrew its ratings on Tech Mahindra last month, citing uncertainties of the financing of the Satyam deal.
D.R. Dogra, deputy managing director of CARE, said its ratings factored in all issues relating to the Satyam deal, and said developments were being closely watched.
"Certainly we are keeping our eyes and ears open because this is a very high rating. But so far there is nothing in our eyes that can change the kind of rating that we have given the company at this stage," Dogra said.
Tech Mahindra posted net profit of Rs 223 core on net sales of Rs 1,132 crore for the quarter ended Dec. 31.
Satyam seeks appointment of more directors on board
15 Apr 2009, PTI
NEW DELHI: Satyam Computer Services today sought Company Law Board (CLB) nod to appoint four new directors on its board.
The Hyderabad-based company has approached CLB for appointment of Vineet Nayyar, Ulhas N Yargop, C P Gurunani and Sanjay Kalra, all senior functionaries of Tech Mahindra, on the board of Satyam.
This follows Tech Mahindra emerging as the highest bidder for acquiring Satyam Computer Services on Monday.
CLB is likely to give its decision on the plea of Satyam tomorrow.
NEW DELHI: Satyam Computer Services today sought Company Law Board (CLB) nod to appoint four new directors on its board.
The Hyderabad-based company has approached CLB for appointment of Vineet Nayyar, Ulhas N Yargop, C P Gurunani and Sanjay Kalra, all senior functionaries of Tech Mahindra, on the board of Satyam.
This follows Tech Mahindra emerging as the highest bidder for acquiring Satyam Computer Services on Monday.
CLB is likely to give its decision on the plea of Satyam tomorrow.
Satyam to delist from Euronext Amsterdam
15 Apr 2009, ET Bureau
NEW DELHI: Satyam Computer Services has decided to delist its American Depositary Shares from NYSE Euronext in Amsterdam.
The government-nominated board took the decision on delisting after concluding that the financial and legal burdens of a listing was no longer viable for the company.
Satyam was the first NYSE-listed company after the merger between NYSE Group and Euronext to seek a cross-market listing on NYSE Euronext in Europe in January last year.
The application for delisting is subject to the approval of Euronext Amsterdam. Upon delisting from Euronext Amsterdam, the Company's equity shares are expected to remain listed and traded on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited , and its ADSs are expected to remain listed and traded on the New York Stock Exchange in New York ("NYSE").
On Monday, Tech Mahindra said it would pay more than $550 million for a controlling stake in Satyam, throwing a lifeline to the fraud-hit firm.
Last year, Satyam launched a secondary listing on Euronext Amsterdam under NYSE Euronext's new "fast path" process for cross-listings in New York and Europe.
NEW DELHI: Satyam Computer Services has decided to delist its American Depositary Shares from NYSE Euronext in Amsterdam.
The government-nominated board took the decision on delisting after concluding that the financial and legal burdens of a listing was no longer viable for the company.
Satyam was the first NYSE-listed company after the merger between NYSE Group and Euronext to seek a cross-market listing on NYSE Euronext in Europe in January last year.
The application for delisting is subject to the approval of Euronext Amsterdam. Upon delisting from Euronext Amsterdam, the Company's equity shares are expected to remain listed and traded on the Bombay Stock Exchange Limited and the National Stock Exchange of India Limited , and its ADSs are expected to remain listed and traded on the New York Stock Exchange in New York ("NYSE").
On Monday, Tech Mahindra said it would pay more than $550 million for a controlling stake in Satyam, throwing a lifeline to the fraud-hit firm.
Last year, Satyam launched a secondary listing on Euronext Amsterdam under NYSE Euronext's new "fast path" process for cross-listings in New York and Europe.
Infosys' cash, equivalents cross $2 bn mark
15 Apr 2009, PTI
NEW DELHI: Software services major Infosys Technologies today said its cash and cash equivalents stood at over $2 billion at the end of last fiscal in spite of credit crisis worldwide.
"The cash and cash equivalents, including investments in liquid mutual funds and certificate of deposits, as on March 31, 2009 were Rs 10,993 crore," a company statement said.
Commenting on the liquidity and capital expenditure plans of the company, Infosys Technologies Chief Financial Officer V Balakrishnan said: "We improved our operating margins during fiscal 2009 despite a very difficult global economic environment combined with highly volatile currency markets."
"We have a strong balance sheet with cash and cash equivalents of over $2 billion," Balakrishnan added.
Besides, the software firm is comfortably placed in terms of current assets for the financial year ended March 31, 2009, at Rs 12,288 crore, a major source of fund for companies to meet their day to day expenses.
At the end of the fourth quarter of the last fiscal, the company's current assets stood at Rs 12,288 crore, a rise of 44.63 per cent from the previous period a year ago.
In the March quarter of 2007-08, the current assets of the company stood at Rs 8,496 crore.
An analysis of the balance sheet data of the last five financial years shows that the net current assets of the company are on an uptrend since FY'04.
In FY'04, they were at Rs 1,220.12 crore, which increased to Rs 2,384.58 crore in FY'05. In 2005-06 and FY'07 they rose further to Rs 3,832 crore and Rs 7,137 crore, respectively.
Current assets are used to fund day-to-day operations and pay ongoing expenses. Current assets represents the sum of cash and cash equivalents, inventory and other assets that could be converted to cash in a short span of time.
Infosys Technologies today reported a 29 per cent increase in its fourth quarter net profit on improved operating margins, but forecast a decline in its revenue and earnings during the current fiscal as many of its clients have been hit by the global financial crisis.
The country's second largest IT exporter's net profit after tax stood at Rs 1,613 crore in the quarter ended March 31. The revenue rose 24.1 per cent to Rs 5,635 crore on year-on-year basis.
NEW DELHI: Software services major Infosys Technologies today said its cash and cash equivalents stood at over $2 billion at the end of last fiscal in spite of credit crisis worldwide.
"The cash and cash equivalents, including investments in liquid mutual funds and certificate of deposits, as on March 31, 2009 were Rs 10,993 crore," a company statement said.
Commenting on the liquidity and capital expenditure plans of the company, Infosys Technologies Chief Financial Officer V Balakrishnan said: "We improved our operating margins during fiscal 2009 despite a very difficult global economic environment combined with highly volatile currency markets."
"We have a strong balance sheet with cash and cash equivalents of over $2 billion," Balakrishnan added.
Besides, the software firm is comfortably placed in terms of current assets for the financial year ended March 31, 2009, at Rs 12,288 crore, a major source of fund for companies to meet their day to day expenses.
At the end of the fourth quarter of the last fiscal, the company's current assets stood at Rs 12,288 crore, a rise of 44.63 per cent from the previous period a year ago.
In the March quarter of 2007-08, the current assets of the company stood at Rs 8,496 crore.
An analysis of the balance sheet data of the last five financial years shows that the net current assets of the company are on an uptrend since FY'04.
In FY'04, they were at Rs 1,220.12 crore, which increased to Rs 2,384.58 crore in FY'05. In 2005-06 and FY'07 they rose further to Rs 3,832 crore and Rs 7,137 crore, respectively.
Current assets are used to fund day-to-day operations and pay ongoing expenses. Current assets represents the sum of cash and cash equivalents, inventory and other assets that could be converted to cash in a short span of time.
Infosys Technologies today reported a 29 per cent increase in its fourth quarter net profit on improved operating margins, but forecast a decline in its revenue and earnings during the current fiscal as many of its clients have been hit by the global financial crisis.
The country's second largest IT exporter's net profit after tax stood at Rs 1,613 crore in the quarter ended March 31. The revenue rose 24.1 per cent to Rs 5,635 crore on year-on-year basis.
Monday, April 13, 2009
Satym fraud: Raju and four others withdraw bail petitions
13 Apr 2009 ET Bureau
HYDERABAD: B Ramalinga Raju, the disgraced founder of Satyam Computer Services, and four other accused in the fraud at the IT firm, withdrew their bail petitions from a lower court on Monday, fearing a denial here.
Apart from Ramalinga Raju bail applications were withdrawn by his brother B Rama Raju,former CFO Srinivas Vadhlamani and PW auditors S Gopalakrishnan and Srinivas Talluri.
The five accused are now likely to apply fresh petitions in the higher court.
The bail applications of PW auditors were denied by the lower court last week.Raju had confessed to perpetrating the Rs 7000 crore financial fraud at the IT company on January 7 this year.
HYDERABAD: B Ramalinga Raju, the disgraced founder of Satyam Computer Services, and four other accused in the fraud at the IT firm, withdrew their bail petitions from a lower court on Monday, fearing a denial here.
Apart from Ramalinga Raju bail applications were withdrawn by his brother B Rama Raju,former CFO Srinivas Vadhlamani and PW auditors S Gopalakrishnan and Srinivas Talluri.
The five accused are now likely to apply fresh petitions in the higher court.
The bail applications of PW auditors were denied by the lower court last week.Raju had confessed to perpetrating the Rs 7000 crore financial fraud at the IT company on January 7 this year.
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