9 January 2010
Exactly a year ago Ramalinga Raju went from owning the country's fourth largest IT company, the $2-billion Satyam Computers, to the Hyderabad jail.
His dramatic transit took the lid off a humungous financial fraud, obscured until then by a complex web of fictitious companies, clients, transactions, receipts and even fictitious income tax payment certificates. Corporate India, and very much everyone else, was left gaping in disbelief. The mask had come off an icon of India's celebrated new economy, baring him as a swindler, not just of Satyam's crores but also the trust of millions of shareholders whose wealth, worth Rs 14,162 crore, vanished in one fell swoop on January 7 last year - the day his cunning run came to an end.
So, a year down the line, where is Raju? At the Nizam's Institute of Medical Sciences (NIMS), the chosen sanctuary for VIPs in distress. It's the same hospital where K Chandrasekhar Rao was taken when he went on a fast that led to the Centre's hurried decision to bifurcate Andhra Pradesh and where India's richest MP Lagadapati Rajagopal rushed to when he too went on a fast to reverse the bifurcation decision. Raju is, of course, not fasting. He is apparently being treated for a minor heart ailment, but more worryingly, also for a damaged liver induced by the deadly hepatitis C virus.
Raju has been in jail without bail ever since January 9 last year. Apparently, he was not seriously interested in bail. The reason: Being out would bring him face to face with persons whom he owed money. Barely days before Y S Rajasekhara Reddy's sudden death a little over three months ago, Raju got admitted at NIMS. The Satyam scamster has been in hospital ever since, with a short break in jail. His brother Rama Raju, his finance honcho, Srinivas Vadlamani, and seven others - including the two Price Waterhouse Coopers (PwC) auditors who are accused of colluding with Raju - are still in jail.
Meanwhile, the Central Bureau of Investigation (CBI) has filed three chargesheets. They seek to establish not only Raju's confession of cooking the books of Satyam but also his devious modus operandi. What's more, the CBI claims the swindle is bigger than what Raju has confessed to - that he started siphoning money out of the company two years earlier than what he has claimed. The third chargesheet, filed earlier this week, says that the Rajus produced forged income tax payment certificates - worth Rs 329 crore - from the US and other foreign countries to seek income tax exemption in India. "If convicted, Raju will be put away for at least 10 years in jail," said a top criminal lawyer in Hyderabad. "But the complex scam will have to be established. The Rajus are lining up the best defence lawyers."
Already, Raju has lost control of Satyam and Maytas Infra, the company that he was building for the future. It's believed that it is only a matter of time before Maytas Properties, Raju's real estate firm, too will slip out of Raju's hands. The CBI probe is continuing and a fourth chargesheet would be filed at the end of the present round of investigations which are focusing on how (and if) Raju ferreted money overseas and the channels he used to bring it back into the country.
According to the CBI chargesheets, Raju's giant con began in 1999 - two years before 2001 (the year Raju is claiming he started fudging Satyam's accounts). The money was allegedly diverted to the front companies floated by Raju and his brothers. The accounts of Satyam were settled by writing off this amount as "doubtful advances" . It's hardly surprising that these front companies were involved in agri business, an euphemism for buying land - Raju's big passion to satisfy which hefty amounts were routinely pilfered from Satyam.
As per CBI investigations, the Rajus owned 6012 acres of land in Karnataka, Nagpur, Chennai and Andhra Pradesh, out of which as much 4817 acres of land was in Greater Hyderabad. However, there are many who believe Raju's land bank is even bigger. Given the complexity of his operations, the CBI has probably not been able to detect it all. The CBI chargesheet says Ramalinga Raju, his brothers Rama Raju and Suryanarayana Raju, and their family members "acquired several thousands of acres of land, several thousands of square yards of housing plots and several thousands of square feet of built up area."
What's interesting is that much of the land was owned by privately-held Raju companies in which his extended family members, country cousins and even cooks, drivers and gardeners were directors. These 132 'directors' (benamidars ) have all been booked by the Enforcement Directorate under the Prevention of Money Laundering Act. The benamidars claim they never had any control over the assets or any clue about the papers they were asked to sign. Following their written statements, the ED has attached 297 immovable properties, including a house built on a 4000-square yard plot in Hyderabad's tony Jubilee Hills where Raju's elder son Teja Raju lives. Of course, the attachment order can be challenged in a higher court.
Raju's lust for land had to be met with fistfuls of money. Much of it came illegally from Satyam. Raju borrowed a sum of Rs 1,221 crore from banks on the basis of fabricated board resolutions between 2000 and 2008 and, as per the chargesheet, "misappropriated these monies of Satyam detrimental to its interest." Curiously, the interest on these loans was paid by Satyam. How Satyam shelled out interest on loans that were never reflected in its books without attracting the attention of the audit committee or the board of directors is a matter of surprise. The Rajus also merged a part-owned Satyam subsidiary, the loss-making Nipuna, with Satyam, for which two companies - one incorporated in Mauritius and the other in Cayman Islands - were paid off handsomely for parting with their shares in Nipuna. The ownership of these two companies is still to be established.
There were a host of other tricks. One of them was to create fictitious companies that ostensibly contracted work to Satyam and brought in revenues to the company. To impart credibility in these fraudulent operations, some staffers were also assigned to these 'projects'. From the side of these fictitious customers, fictitious mails were also sent to the staffers from fictitious email accounts to create the impression that the project was being monitored by them. "The scope of the fraud was mind boggling . It required a very twisted, even if sophisticated , mind to conjure it all up," an official connected to the investigation told TOI. The CBI has established that in 2006, just to service seven fictitious customers, an amount of Rs 65.88 cores was actually spent as salaries and other overheads. In the process, Satyam raised 63 bills to demand Rs 431 crore. This sum never came into the company but was shown as received. The result: inflation of Satyam's revenues that helped push up its scrip.
Analysts tracking the case say that nemesis has caught up with Raju and he will be punished not only by the due process of law but also by the hepatitis C virus that doctors say is possibly as dangerous as the HIV virus. But the full story of the fudge will never be known unless Raju decides to bare it all. For now, he is mum: he has said nothing beyond his confessional statement to the police.
Courtesy;TOI
Showing posts with label Hyderabad. Show all posts
Showing posts with label Hyderabad. Show all posts
Sunday, January 10, 2010
Friday, November 27, 2009
Satyam scam is of over Rs.14,000 crore: CBI
Hyderabad: The accounting scam at Satyam Computer Services is to the tune of Rs.14,000 crore (Rs.140 billion/$2.8 billion) and not Rs.7,800 crore (Rs.78 billion) as the company's disgraced former chairman B. Ramalinga Raju stated earlier this year, the Central Bureau of Investigation (CBI) has said.
The federal agency Tuesday filed a 200-page charge sheet in the special court for CBI cases here that had details of properties acquired by Raju and other accused and their financial transactions abroad through fictitious firms.
'The quantum of scam and the loss suffered by investors has been quantified. The loss suffered by investors works out to over Rs.14,000 crore,' said CBI Deputy Inspector General Lakshminarayana.
The accounting fraud, which shocked India, came to light Jan 7 when Raju quit as Satyam chairman while confessing that he had cooked the company's accounts and inflated profits over several years.
The CBI official said with the filing of the additional charge sheet the agency had completed the probe into the accounting fraud.
The agency, however, is contemplating to file separate charge sheets pertaining to the diversion of funds and the fraud perpetrated by the accused with regard to filing of income tax returns of Satyam.
The additional charge sheet said Raju and the other accused had acquired assets worth Rs.350 crore.
'The huge assets acquired by the accused with the fraud amounts have been identified. A total of 1,065 properties whose documented value is Rs.350 crore have been identified which include around 6,000 acres, 40,000 square yards of housing plots and 90,000 square feet of built-up area,' said a CBI statement.
The accused had also raised loans of Rs.1,220 crore by forging the resolutions of the board of directors, apart from inflating profits by Rs.450 crore by showing fictitious customers, CBI said.
The
statement said the accused falsified the accounts in the matter pertaining to the acquisition of shares of a Hyderabad-based company.
The accused have also resorted to criminal breach of trust in the matter pertaining to declaration and disbursement of dividends. Further evidence collected revealed the role of two statutory auditors in the fraud.
'In the supplementary charge sheet, we have filed the charges under various sections of Indian Penal Code like 120 B (criminal conspiracy), 409 (criminal breach of trust), 419 (impersonation), 420 (cheating), 467, 468 and 471 (all pertaining to forgery),' the CBI official said.
The first charge sheet was filed April 7.
In addition to the nine accused, the investigating agency has also levelled charges against internal auditor V.S. Prabhakar Gupta.
Gupta, arrested two days ago, has been charged with breach of trust, forgery, cheating and fabrication of accounts.
'In the supplementary charge sheet, we have cited 301 additional witnesses and nine material objects. We have also filed 1,550 additional documents. With this the quantity of documents in this case has gone up to 55,000,' Lakshminarayana said.
The multi-disciplinary investigation team comprising officials of the CBI, the income tax department, enforcement directorate and the Reserve Bank of India, has also gathered details of Raju's bank transactions in Mauritius.
Raju and his brother and then managing director Rama Raju were arrested by the Andhra Pradesh police Jan 9. Former chief financial officer Vadlamani Srinivas was picked up the next day.
Two auditors were also arrested the same month.
The CBI, which began the investigations in February, arrested three executives of Satyam's finance wing in April.
All the accused are currently lodged in Chanchalguda central jail here.
The federal agency Tuesday filed a 200-page charge sheet in the special court for CBI cases here that had details of properties acquired by Raju and other accused and their financial transactions abroad through fictitious firms.
'The quantum of scam and the loss suffered by investors has been quantified. The loss suffered by investors works out to over Rs.14,000 crore,' said CBI Deputy Inspector General Lakshminarayana.
The accounting fraud, which shocked India, came to light Jan 7 when Raju quit as Satyam chairman while confessing that he had cooked the company's accounts and inflated profits over several years.
The CBI official said with the filing of the additional charge sheet the agency had completed the probe into the accounting fraud.
The agency, however, is contemplating to file separate charge sheets pertaining to the diversion of funds and the fraud perpetrated by the accused with regard to filing of income tax returns of Satyam.
The additional charge sheet said Raju and the other accused had acquired assets worth Rs.350 crore.
'The huge assets acquired by the accused with the fraud amounts have been identified. A total of 1,065 properties whose documented value is Rs.350 crore have been identified which include around 6,000 acres, 40,000 square yards of housing plots and 90,000 square feet of built-up area,' said a CBI statement.
The accused had also raised loans of Rs.1,220 crore by forging the resolutions of the board of directors, apart from inflating profits by Rs.450 crore by showing fictitious customers, CBI said.
The
statement said the accused falsified the accounts in the matter pertaining to the acquisition of shares of a Hyderabad-based company.
The accused have also resorted to criminal breach of trust in the matter pertaining to declaration and disbursement of dividends. Further evidence collected revealed the role of two statutory auditors in the fraud.
'In the supplementary charge sheet, we have filed the charges under various sections of Indian Penal Code like 120 B (criminal conspiracy), 409 (criminal breach of trust), 419 (impersonation), 420 (cheating), 467, 468 and 471 (all pertaining to forgery),' the CBI official said.
The first charge sheet was filed April 7.
In addition to the nine accused, the investigating agency has also levelled charges against internal auditor V.S. Prabhakar Gupta.
Gupta, arrested two days ago, has been charged with breach of trust, forgery, cheating and fabrication of accounts.
'In the supplementary charge sheet, we have cited 301 additional witnesses and nine material objects. We have also filed 1,550 additional documents. With this the quantity of documents in this case has gone up to 55,000,' Lakshminarayana said.
The multi-disciplinary investigation team comprising officials of the CBI, the income tax department, enforcement directorate and the Reserve Bank of India, has also gathered details of Raju's bank transactions in Mauritius.
Raju and his brother and then managing director Rama Raju were arrested by the Andhra Pradesh police Jan 9. Former chief financial officer Vadlamani Srinivas was picked up the next day.
Two auditors were also arrested the same month.
The CBI, which began the investigations in February, arrested three executives of Satyam's finance wing in April.
All the accused are currently lodged in Chanchalguda central jail here.
Sunday, July 26, 2009
Criminal cases against Maytas Properties promoters
The Hyderabad police has registered cheating and criminal breach of trust cases against the promoters of Maytas Properties, an unlisted company owned by the family of Satyam Computer Services Ltd founder B Ramalinga Raju, who is in jail after confessing to manipulating Satyam’s accounts.
Speaking to Business Standard, Deputy Commissioner of Police (Detective) R S Praveen Kumar said the police registered the cases yesterday following a complaint from a member who bought property at Hill County, Bachupally, a residential project promoted by Maytas Properties on the outskirts of the city.
The complainant told the police that he paid about Rs 77 lakh to buy the property and the company promised to deliver it in March 2008 but did not do so, citing the crash in the real estate market.
The police have registered cases under Section 406 (criminal breach of trust) and Section 420 (cheating). “We will investigate the case based on the complaint,” Kumar said, adding that that the cases were filed against B Rama Raju, Maytas Properties, vice-chairman and younger son of Ramalinga Raju.
People who bought flats at Hill County have been on the warpath for some weeks now since pressure from their monthly loan instalments was building up. They have held demonstrations at the construction site, at Rama Raju’s residence and also staged a hunger strike in protest against the delay.
Hill County is a Rs 1,100-crore project out of which the company has collected Rs 654 crore by selling residential property. It currently has Rs 100 crore as receivables and Rs 200 crore as vendor liabilities. The project envisaged construction of 840 apartments and 326 independent villas. The flats were priced between Rs 50 lakh and Rs 1.5 crore, while the price of villas ranged from Rs 1.5 crore to Rs 2.5 crore.
Last week, the company’s government-appointed director Ved Jain announced that it was looking at parting with a stake in the residential project.
Speaking to Business Standard, Deputy Commissioner of Police (Detective) R S Praveen Kumar said the police registered the cases yesterday following a complaint from a member who bought property at Hill County, Bachupally, a residential project promoted by Maytas Properties on the outskirts of the city.
The complainant told the police that he paid about Rs 77 lakh to buy the property and the company promised to deliver it in March 2008 but did not do so, citing the crash in the real estate market.
The police have registered cases under Section 406 (criminal breach of trust) and Section 420 (cheating). “We will investigate the case based on the complaint,” Kumar said, adding that that the cases were filed against B Rama Raju, Maytas Properties, vice-chairman and younger son of Ramalinga Raju.
People who bought flats at Hill County have been on the warpath for some weeks now since pressure from their monthly loan instalments was building up. They have held demonstrations at the construction site, at Rama Raju’s residence and also staged a hunger strike in protest against the delay.
Hill County is a Rs 1,100-crore project out of which the company has collected Rs 654 crore by selling residential property. It currently has Rs 100 crore as receivables and Rs 200 crore as vendor liabilities. The project envisaged construction of 840 apartments and 326 independent villas. The flats were priced between Rs 50 lakh and Rs 1.5 crore, while the price of villas ranged from Rs 1.5 crore to Rs 2.5 crore.
Last week, the company’s government-appointed director Ved Jain announced that it was looking at parting with a stake in the residential project.
US SEC reviews progress on restatement of Satyam a/cs
24 Jul 2009, ET Bureau
HYDERABAD: A high-level US Securities and Exchange Commission team reviewed the progress on the restatement of accounts of Satyam Computer Services on Thursday with audit firm KPMG, Mahindra Satyam CEO CP Gurnani told ET.
The US SEC team, accompanied by Sebi officials also met Tech Mahindra officials, the new owners of Satyam, to discuss a host of issues including re-statement of the manipulated accounts.
Global audit firms KPMG and Deloitte have been commissioned to conduct a forensic audit of Satyam’s accounts, after founder B Ramalinga Raju confessed to fudging the books for seven years.
The US SEC is probing the violation of US Securities law by former Satyam executives after a clutch of class action suits were filed by law firms representing shareholders of Satyam in the US. Shareholders alleged that the executives issued false and misleading statements.
A senior Mahindra Satyam official said the restatement exercise is on track and is likely to the completed by December this year. Sebi is probing the insider trading of shares by Raju and his family as investigating agencies including the CBI suspect that the promoters made windfall gains by rigging share prices and invested the money in realty deals.
In an interim report on the Satyam investigation, SEBI has recommended prohibiting Satyam’s esrtwhile auditors and the audit firm Price Waterhouse from auditing accounts of listed companies for a certain period.
HYDERABAD: A high-level US Securities and Exchange Commission team reviewed the progress on the restatement of accounts of Satyam Computer Services on Thursday with audit firm KPMG, Mahindra Satyam CEO CP Gurnani told ET.
The US SEC team, accompanied by Sebi officials also met Tech Mahindra officials, the new owners of Satyam, to discuss a host of issues including re-statement of the manipulated accounts.
Global audit firms KPMG and Deloitte have been commissioned to conduct a forensic audit of Satyam’s accounts, after founder B Ramalinga Raju confessed to fudging the books for seven years.
The US SEC is probing the violation of US Securities law by former Satyam executives after a clutch of class action suits were filed by law firms representing shareholders of Satyam in the US. Shareholders alleged that the executives issued false and misleading statements.
A senior Mahindra Satyam official said the restatement exercise is on track and is likely to the completed by December this year. Sebi is probing the insider trading of shares by Raju and his family as investigating agencies including the CBI suspect that the promoters made windfall gains by rigging share prices and invested the money in realty deals.
In an interim report on the Satyam investigation, SEBI has recommended prohibiting Satyam’s esrtwhile auditors and the audit firm Price Waterhouse from auditing accounts of listed companies for a certain period.
CBI chief calls on senior officials at Satyam
Hyderabad July 25, 2009
Central Bureau of Investigation (CBI) sleuths, led by its director Ashwini Kumar, met senior officials of fraud-hit Satyam Computer Services, now rebranded as Mahindra Satyam, at its headquarters here on Friday.
“The CBI team was here to get first-hand information on the possible acquaintance of some staff with the company’s (jailed) founder, Ramalinga Raju. We don’t know further details of the closed-door meeting, as about 30 CBI security personnel cordoned off the entire office area. Several officials of the company, along with some senior management members, were present in the meeting,” a company source said.
He indicated the CBI team was likely to visit the IT outsourcing major’s headquarters again in a day or two. The CBI chief arrived here on Thursday to review the progress made by the bureau on its investigation into the multi-crore accounting fraud at Satyam.
Meanwhile, a petition filed by legal counsel for Ramalinga Raju yesterday, asking for quashing of the July 9 order of a lower court which allowed the CBI to conduct a lie detector test (polygraph test) and brain mapping (F300 testing) on Raju and his brother and former managing director B Rama Raju, and former chief financial officer Srinivas Vadlamani, all accused in the multi-crore scam, came up for hearing today.
Raju’s counsel contended the tests violated fundamental rights of the accused and would subject them to pressure. The confessions, anyway, would not be admissible in court. The CBI counsel sought time till July 27 from the court to file a reply. He told the court it would not conduct the tests till July 30. The CBI feels crores of rupees were also misappropriated from Satyam, for which they have yet to get proof. The accused, on whom the forensic tests were to be conducted, did not reveal the information with regard to the alleged defalcation and therefore, these were necessary to aid in the investigation.
The lower court felt it was a fit case to agree to allow the lie detector test and brain mapping.
Central Bureau of Investigation (CBI) sleuths, led by its director Ashwini Kumar, met senior officials of fraud-hit Satyam Computer Services, now rebranded as Mahindra Satyam, at its headquarters here on Friday.
“The CBI team was here to get first-hand information on the possible acquaintance of some staff with the company’s (jailed) founder, Ramalinga Raju. We don’t know further details of the closed-door meeting, as about 30 CBI security personnel cordoned off the entire office area. Several officials of the company, along with some senior management members, were present in the meeting,” a company source said.
He indicated the CBI team was likely to visit the IT outsourcing major’s headquarters again in a day or two. The CBI chief arrived here on Thursday to review the progress made by the bureau on its investigation into the multi-crore accounting fraud at Satyam.
Meanwhile, a petition filed by legal counsel for Ramalinga Raju yesterday, asking for quashing of the July 9 order of a lower court which allowed the CBI to conduct a lie detector test (polygraph test) and brain mapping (F300 testing) on Raju and his brother and former managing director B Rama Raju, and former chief financial officer Srinivas Vadlamani, all accused in the multi-crore scam, came up for hearing today.
Raju’s counsel contended the tests violated fundamental rights of the accused and would subject them to pressure. The confessions, anyway, would not be admissible in court. The CBI counsel sought time till July 27 from the court to file a reply. He told the court it would not conduct the tests till July 30. The CBI feels crores of rupees were also misappropriated from Satyam, for which they have yet to get proof. The accused, on whom the forensic tests were to be conducted, did not reveal the information with regard to the alleged defalcation and therefore, these were necessary to aid in the investigation.
The lower court felt it was a fit case to agree to allow the lie detector test and brain mapping.
Satyam scam: SEC team meets CBI, SEBI, KPMG officials
Hyderabad, July 25 The United States’ Securities Exchange Commission (SEC) team has held discussions with Mr Ashwani Kumar, CBI Director, and the Securities and Exchange Board of India (SEBI), on the Rs 7,136-crore Satyam scam at the IT major’s Infocity campus at Madhapur here on Friday.
The three-member SEC team also quizzed auditors of KPMG, which is taking part in the restatement of the balance sheets of the company. KPMG is doing a forensic study on how the scam was perpetrated over the years.
The SEC team, which conducted a preliminary probe in February 2009 soon after the scam broke out, had sought the permission from the Union Government and the CBI to carry out its own investigation into the issue.
Mr Ashwani Kumar, who reviewed the CBI’s probe into the scam, went to the Satyam campus along with his colleagues in the Multi-Discliplinary Investigating Team on Friday. The SEC team reportedly enquired into the role played by PriceWaterhouse, the statutory auditors for Satyam for years during the scam period.
Case adjourned
Meanwhile, the Andhra Pradesh High Court has adjourned hearing on the appeal by the counsel of Mr B. Ramalinga Raju (the former Satyam Chairman), questioning a lower court’s decision to permit CBI to conduct a lie-detector test and brain-mapping on Mr Raju. “Hearing has been deferred to July 28. The CBI gave an undertaking that it would not conduct the tests before that date,” said Mr S. Bharatkumar, counsel for Mr Raju.
The three-member SEC team also quizzed auditors of KPMG, which is taking part in the restatement of the balance sheets of the company. KPMG is doing a forensic study on how the scam was perpetrated over the years.
The SEC team, which conducted a preliminary probe in February 2009 soon after the scam broke out, had sought the permission from the Union Government and the CBI to carry out its own investigation into the issue.
Mr Ashwani Kumar, who reviewed the CBI’s probe into the scam, went to the Satyam campus along with his colleagues in the Multi-Discliplinary Investigating Team on Friday. The SEC team reportedly enquired into the role played by PriceWaterhouse, the statutory auditors for Satyam for years during the scam period.
Case adjourned
Meanwhile, the Andhra Pradesh High Court has adjourned hearing on the appeal by the counsel of Mr B. Ramalinga Raju (the former Satyam Chairman), questioning a lower court’s decision to permit CBI to conduct a lie-detector test and brain-mapping on Mr Raju. “Hearing has been deferred to July 28. The CBI gave an undertaking that it would not conduct the tests before that date,” said Mr S. Bharatkumar, counsel for Mr Raju.
The Satyam Saga - As it Unfolds
22 September 2008: Satyam Computer Services won the Golden Peacock Global Award for excellence in corporate governance for 2008 given by the World Council for Corporate Governance. On that day, the Satyam stock ended down 4.69% at Rs 352.75.
16 December 2008: Satyam announced that it will acquire 100% in unlisted Maytas Properties for $1.3 billion and 51% of construction firm Maytas Infra for $300 million. Satyam founder and chairman B Ramalinga Raju and other insiders held 36% in Maytas Infra and 35% in Maytas Properties. Ramalinga Raju originally promoted the deal by saying it would de-risk Satyam's core business in IT services. The announcement was made after market shut on that day.
Satyam had planned to fund 75% of the acquisition with cash and the rest by selling debt. Satyam planned to acquire 31% in Maytas Infra from its promoters, or company insiders, at a price of Rs 475 a share. Satyam also planned to make an open offer for an additional 20% at a price of Rs 525 a share.
The acquisitions made little sense at a time when technology outsourcing companies are preserving cash to cope with slowing outsourcing business. Maytas Properties is into urban infrastructure development whereas Maytas Infra is into infrastructure construction and asset development.
Following the surprising announcement, Satyam's American depository receipt (ADR) plunged on 16 December 2008 as investors reacted negatively to its plan to buy two related companies. The ADR of Satyam Computer Services, which closed down $6.85, or 55%, at $5.70 on the New York Stock Exchange, jumped 50% in after-hours trading to $8.89. Even after the evening rally they were still down 28% from 15 December 2008's close of $12.30. On that day, the Satyam stock ended up 0.49% at Rs 226.50.
17 December 2008: Folowing a negative investor reaction, Satyam called off the deal which it had announced after trading hours in India on 16 December 2008. Satyam announced the decision to call off the deal before trading hours in India on 17 December 2008. However, the Satyam stock slumped 30.22% to end at Rs 158.05 on 17 December 2008 as investors judged Satyam's move as a total disregard for corporate governance and shareholders. On that day, the Satyam stock slumped 30.22% to end at Rs 158.05.
18 December 2008: Shares of Satyam spurted 7.15% to end at Rs 169.35 after the company said during trading hours on that day that its board will meet on 29 December 2008 to consider buyback of shares.
Satyam's decision to consider buyback was aimed at soothing investors nerves after the stock slumped 30.22% to Rs 158.05 on 17 December 2008, hitting a five-year low in intraday trade, with investors exiting the counter due to poor corporate governance. Satyam claimed of having a large cash pile of $1.1 billion, which marketmen hoped the company could use for buyback. On that day, the Satyam stock jumped 7.15% to end at Rs 169.35.
19 December 2009: UK-based online and mobile payment services player Upaid Systems filed a motion against Satyam in a state court, requesting testimony of Satyam's chairman B Ramalinga Raju, chief financial officer Srinivas Vadlamani and global head of corporate governance G Jayaram in connection with Satyam's failed attempt to strip all surplus cash from Satyam to to buy two closely held companies.
Upaid had urged the top Satyam officials to clarify as to why the company went through with the Maytas deal, in case they were looking at moving cash out of the books largely because they feared Satyam could loose the Upaid's earlier filed case.
Upaid and Satyam are locked in a two-pronged legal battle, one, a forgery case filed by Upaid against the Satyam management seeking damages of over $1 billion, and the other, a disparagement case levelled by Satyam against the little known UKbased company.
The forgery case dates back to early 2000, when Satyam was working on a contract job for U-paid . Upaid says that it ran into problems with Qualcomm and Verizon and had to settle the case with them under grossly unfavourable terms due to forgery by Satyam officials. On that day, the Satyam stock ended down 3.87% at Rs 162.80.
23 December 2008: The World Bank confirmed that it has barred Satyam Computer from doing business with it for eight years, starting September 2008, due to data theft and paying bribes to its staff. The World Bank, which had signed a $100-million billing per annum contract, had been an important client for Satyam. Since 2003, Satyam had been writing and maintaining all software for World Bank across all locations. This also included maintenance of software in back-end offices. On that day, the Satyam stock slipped 13.55% to end at Rs 140.40.
25 December 2008: Satyam Computer asked the World Bank to withdraw 'inappropriate' statements about the Indian outsourcer and to issue an apology for harm done to the company.
Earlier On 23 December 2008, the World Bank had issued a statement saying Satyam was debarred from getting direct contracts from it under its corporate procurement programme for eight years from September 2008. Media reports had suggested that data theft was one of the reasons why the World Bank had barred Satyam from doing business with it. Equity markets were shut on that day on account of Christmas holiday.
26 December 2008: Satyam said Mangalam Srinivasan, non-executive and independent director of Satyam resigned from the company effective 25 December 2008. On that day, the satyam stock ended 0.41% up at Rs 135.50.
29 December 2008: Satyam said Professor Krishna G Palepu, non-executive director and Vinod K Dham, non-executive and independent director of the company resigned from the company effective 28 December 2008. The outsourcer did not give any reason for the resignations.
Satyam, before trading hours on the same day had postponed the board meeting set on 29 December 2008 to 10 January 2009 to mull options beyond just a possible share buyback. The company said in a statement its board would consider moves to strengthen the firm's governance structure, including increasing the size and altering the composition of the board. It also said it had hired DSP Merrill Lynch to review the company's 'strategic options' to enhance shareholder value, but did not give further details. On that day, the satyam stock ended 9.41% up at Rs 148.25.
30 December 2008: Media reports suggested some institutional investors in the company had approached IT firms and private equity players for a stake sale. The report cited market participants as its sources. On that day, the satyam stock ended 8.33% up at Rs 160.60.
31 December 2008: Media reports suggested US-based computer firm Hewlett-Packard may buy a stake in Satyam. Hewlett-Packard (HP) was reported to be attracted by the Satyam's lucrative business software practice. Reports suggested that buying stake in Satyam could give HP an opportunity to challenge its rival IBM with bigger, low-cost offshore capabilities. On that day, the satyam stock ended 5.95% up at Rs 170.15.
3 January 2009 (Saturday): Founder-promoters stake declined from 8.64% to 5.13%t as financial institutions with whom the entire stake was pledged dumped the shares. Of the remaining 5.13% stake (around 3.45 crore shares) with the promoters, around 2.19 crore shares (or roughly 63% of the holdings) were still reported to be pledged with various lenders.
6 January 2009: Satyam denied media reports that suggested that Tech Mahindra had approached Satyam for an all-share merger. On the same day, Satyam had announced that the share of promoters' group in the company had further dwindled with lending agency IL&FS Trust Company selling off 1.03 crore shares afresh. On that day, the satyam stock ended 7.31% up at Rs 179.10.
7 January 2009: Satyam's chairman Ramalinga Raju resigned the company and admitted fraud of reporting inflated figures in the accounts of the firm. As per the announcement, Satyam's balance sheet as on 30 September 2008 had inflated cash and bank balances of Rs 5040 crore, inflated debtors of Rs 490 crore and non-existent accrued interest of Rs 376 crore. Against this the liability was understated by Rs 1230 crore.
Raju said the Q2 September 2008 results had overstated operating revenues by Rs 588 crore, thereby overstating the operating profits and cash to that extent.
The gap in the balance sheet has arisen purely on account of inflated profits over the period of last several years, Raju confessed adding that every attempt made to eliminate the gap failed. As the promoters held a small percentage of equity, the concern was the poor performance would result in a takeover, thereby exposing the gap, Raju said.
Raju said in the last 2 years a net amount of Rs 1230 crore was arranged to keep operations going. He said this was done by pledging all the promoter shares and raising funds from known sources by giving all kinds of assurances. Significant dividend payments, acquisitions, capital expenditure to provide for growth did not help matters. Every attempt was made to keep the wheel moving. The last straw was the selling of most of the pledged share by the lenders on account of margin triggers, Raju said.
The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones, Raju said. Maytas's investors were convinced that this is a good divestment opportunity and a strategic fit, he said.
Raju ended the statement with an apology to Satyam's staff and shareholders and said he was prepared to face the legal consequences.
On the same day, Satyam Computer announced of forming a new team to look into its day-to-day affairs, following the resignation of its chairman Ramalinga. The interim CEO of Satyam, Ram Mynampati, sent a letter to the management and staff, announcing the formation of a new team that consisted of persons who have spent 10 years in the company and twenty years in the industry. On that day, the satyam stock tumbled 77.69% up at Rs 39.95.
8 January 2009: Media reports suggested Satyam's banker Citibank froze more than 30 operational accounts of Satyam Computer. These are trade receivable accounts, and the aim may be to protect the bank's $70-million exposure to the troubled technology firm. Equity markets were shut on that day on account of Moharram.
11 January 2009 (Sunday): In a swift action to salvage the beleaguered Satyam Computer Services, the government, after market hours on Friday (9 January 2009), sacked the remaining three directors erstwhile board on Satyam, including the interim CEO Ram Mynampati. The government then set up a three-member board on 11 January 2009 in a bid to restore confidence in the outsourcing company rocked by India's biggest corporate scandal.
The new three-member board consists of Deepak Parekh, chairman of Housing Development Finance Corporation. Kiran Karnik, former president of the National Association of Software and Service Companies (Nasscom), a technology lobbying group, and C Achutan, a former official at the Securities and Exchange Board of India (Sebi). All the three members would act as independent directors. Corporate Affairs Minister Prem Chand Gupta expressed the hope that the new board would be able to provide the necessary vision, along with responsible and accountable leadership, to the company in this hour of crisis.
23 January 2009: Larsen & Toubro raised its holding in Satyam Computer Services to 12% from 4% earlier. L&T hiked stake in Satyam as the initial cost of investment in Satyam was at risk.
Following the additional share purchase, L&T's average acquisition price of around 12% stake in Satyam dipped to Rs 80 a share from the Rs 174, it paid earlier.
L&T had acquired 4% in Satyam at Rs 174 per share before Satyam's founder B Ramalinga Raju admitted on 7 January 2009 of a Rs 7,000-crore accounting fraud at the IT firm.
If the stake reaches 15%, L&T will then, as per the regulator's takeover guidelines, have to make an open offer for an additional 20% stake in Satyam.
27 January 2009: The government-appointed board of Satyam Computer Services appointed the Boston Consulting Group (BCG) as the management advisor to support the directors and the Satyam leadership team.
Goldman Sachs and Avendus were appointed investment bankers to advise the company on the way forward. A dedicated three-member BCG will work closely, free of charge, during this revival process, Deepak Parekh, board member, had said.
5 February 2009: The government-appointed board of fraud-scarred Satyam Computer Services on Thursday, 5 February 2009, appointed A S Murty, a Satyam executive for 15 years, as chief executive officer (CEO). Murty will be the chief executive with immediate effect, the company said in a statement. Murty was the Global Business Head of Satyam.
The board also said it has received bank lines of credit for Rs 600 crore toward working capital requirements. The money will help the company tide over its financial challenges, the board said.
The board said it had brought on two additional advisers: Homi Khusrokhan, who has served as managing director of Tata Chemicals, Tata Tea, Glaxo Laboratories India and Wellcome India; and Partho Datta, a chartered accountant who will focus on restating the company's scrambled third-quarter results.
6 February 2009: The government announced the appointment of Nasscom past-president Kiran Karnik as chairman of its six-member board.
13 February 2009: The Securities & Exchange Board of India (Sebi) relaxed takeover regulations for companies whose boards have been superseded and replaced by the Government or other regulatory authority. This smoothened the way for a possible sale of Satyam Computer Service, the only company that currently fits this description.
19 February 2009: The Company Law Board (CLB) allowed the government-appointed board of Satyam to bring in a strategic investor through an open bidding process. For this purpose, the CLB also permitted the board to increase the authorised share capital and issue preferential shares.
Currently, the authorised capital of Satyam is 80 crore shares of Rs 2 each, of which 67.3 crore shares have already been issued. The CLB has authorised the Satyam board to pass a resolution to amend the capital clause of the Memorandum of Association to raise its authorised capital. Accordingly, the authorised capital of Satyam will increase from Rs 160 crore comprising 80 crore shares, to Rs 280 crore comprising 140 crore shares.
The Satyam board has been directed to devise a mechanism for transparent, open and competitive process without furthering the interest of any particular acquire. Besides, the board will also have to obtain requisite approvals from the Securities & Exchange Board of India. The process of selection of a strategic investor will be overseen by a retired judge of the Supreme Court or former Chief Justice of India.
6 March 2009: The Sebi approved selling 51% stake in Satyam through global bidding process.
As part of the two-phased bidding process, a chosen investor will acquire newly issued equity shares representing 31% of Satyam's share capital and then make a mandatory minimum public offer to buy a further 20% stake. The bidders are expected to have total net assets in excess of $150 million.
9 March 2009: Satyam commenced a competitive bidding process for selection of an investor to acquire 51% equity stake. Interested bidders were asked to submit a detailed expression of interest and the proof of availability of at least Rs 1500 crore by 20 March 2009.
4 April 2009: The government appointed board of Satyam extended the deadline for submitting financial bids for acquiring a controlling stake in the firm to 13 April 2009 from 9 April 2009 as bidders sought more information.
13 April 2009: Tech Mahindra was declared as the winning bidder for a majority stake in Satyam Computer with a winning bid of Rs 58 a share. Tech Mahindra to pay Rs 1750 crore for a preferential allotment of 30.28 crore shares, amounting to 31% of Satyam's equity. This will be followed by an open offer to acquire an additional 20% within 55 days. The acquisition is expected to cost the company around Rs 2,900 crore.
After evaluating each bidder's technical bid the government appointed board of Satyam Computer and Justice Barucha confirmed Tech Mahindra as the highest bidder as there was no bid within atleast 90% of the Tech Mahindra's bid. Larsen & Toubro (L&T), and Wilbur Ross were others who put in technical bid for Satyam Computer Services. L&T had bid at Rs 45.90 a share and Wilbur Ross at Rs 20.
20 April 2009:Tech Mahindra deposited the funds needed for taking the majority stake in fraud-hit Satyam Computer. Tech Mahindra was to pay Rs 1750 million for a 31% preferential allotment of new shares and would then make an open offer for a further 20% of Satyam.
Funds for the 31% stake as well as the open offer have been deposited by Tech Mahindra, Satyam's government-appointed chairman Kiran Karnik had told media at Satyam's headquarters in Hyderabad.
22 April 2009:Tech Mahindra said its open offer for an additional 20% stake in Satyam Computer at Rs 58 per share will begin on 12 June 2009 and close on 1 July 2009. The open offer to Satyam’s shareholders was made by Venturbay Consultants, an unlisted arm of Tech Mahindra.
The maximum consideration payable under the open offer is Rs 1154 crore. Pursuant to successful completion of the offer, Tech Mahindra's holding in Satyam would go up to 51%. Kotak Mahindra Capital Company is the manager to the offer.
21 June 2009: Satyam Computer Services has been renamed Mahindra Satyam, two months after being taken over by Bangalore-based Tech Mahindra. The new robust brand is envisaged to represent the core values of the Mahindra group and the inherent strength of the Satyam brand.
16 December 2008: Satyam announced that it will acquire 100% in unlisted Maytas Properties for $1.3 billion and 51% of construction firm Maytas Infra for $300 million. Satyam founder and chairman B Ramalinga Raju and other insiders held 36% in Maytas Infra and 35% in Maytas Properties. Ramalinga Raju originally promoted the deal by saying it would de-risk Satyam's core business in IT services. The announcement was made after market shut on that day.
Satyam had planned to fund 75% of the acquisition with cash and the rest by selling debt. Satyam planned to acquire 31% in Maytas Infra from its promoters, or company insiders, at a price of Rs 475 a share. Satyam also planned to make an open offer for an additional 20% at a price of Rs 525 a share.
The acquisitions made little sense at a time when technology outsourcing companies are preserving cash to cope with slowing outsourcing business. Maytas Properties is into urban infrastructure development whereas Maytas Infra is into infrastructure construction and asset development.
Following the surprising announcement, Satyam's American depository receipt (ADR) plunged on 16 December 2008 as investors reacted negatively to its plan to buy two related companies. The ADR of Satyam Computer Services, which closed down $6.85, or 55%, at $5.70 on the New York Stock Exchange, jumped 50% in after-hours trading to $8.89. Even after the evening rally they were still down 28% from 15 December 2008's close of $12.30. On that day, the Satyam stock ended up 0.49% at Rs 226.50.
17 December 2008: Folowing a negative investor reaction, Satyam called off the deal which it had announced after trading hours in India on 16 December 2008. Satyam announced the decision to call off the deal before trading hours in India on 17 December 2008. However, the Satyam stock slumped 30.22% to end at Rs 158.05 on 17 December 2008 as investors judged Satyam's move as a total disregard for corporate governance and shareholders. On that day, the Satyam stock slumped 30.22% to end at Rs 158.05.
18 December 2008: Shares of Satyam spurted 7.15% to end at Rs 169.35 after the company said during trading hours on that day that its board will meet on 29 December 2008 to consider buyback of shares.
Satyam's decision to consider buyback was aimed at soothing investors nerves after the stock slumped 30.22% to Rs 158.05 on 17 December 2008, hitting a five-year low in intraday trade, with investors exiting the counter due to poor corporate governance. Satyam claimed of having a large cash pile of $1.1 billion, which marketmen hoped the company could use for buyback. On that day, the Satyam stock jumped 7.15% to end at Rs 169.35.
19 December 2009: UK-based online and mobile payment services player Upaid Systems filed a motion against Satyam in a state court, requesting testimony of Satyam's chairman B Ramalinga Raju, chief financial officer Srinivas Vadlamani and global head of corporate governance G Jayaram in connection with Satyam's failed attempt to strip all surplus cash from Satyam to to buy two closely held companies.
Upaid had urged the top Satyam officials to clarify as to why the company went through with the Maytas deal, in case they were looking at moving cash out of the books largely because they feared Satyam could loose the Upaid's earlier filed case.
Upaid and Satyam are locked in a two-pronged legal battle, one, a forgery case filed by Upaid against the Satyam management seeking damages of over $1 billion, and the other, a disparagement case levelled by Satyam against the little known UKbased company.
The forgery case dates back to early 2000, when Satyam was working on a contract job for U-paid . Upaid says that it ran into problems with Qualcomm and Verizon and had to settle the case with them under grossly unfavourable terms due to forgery by Satyam officials. On that day, the Satyam stock ended down 3.87% at Rs 162.80.
23 December 2008: The World Bank confirmed that it has barred Satyam Computer from doing business with it for eight years, starting September 2008, due to data theft and paying bribes to its staff. The World Bank, which had signed a $100-million billing per annum contract, had been an important client for Satyam. Since 2003, Satyam had been writing and maintaining all software for World Bank across all locations. This also included maintenance of software in back-end offices. On that day, the Satyam stock slipped 13.55% to end at Rs 140.40.
25 December 2008: Satyam Computer asked the World Bank to withdraw 'inappropriate' statements about the Indian outsourcer and to issue an apology for harm done to the company.
Earlier On 23 December 2008, the World Bank had issued a statement saying Satyam was debarred from getting direct contracts from it under its corporate procurement programme for eight years from September 2008. Media reports had suggested that data theft was one of the reasons why the World Bank had barred Satyam from doing business with it. Equity markets were shut on that day on account of Christmas holiday.
26 December 2008: Satyam said Mangalam Srinivasan, non-executive and independent director of Satyam resigned from the company effective 25 December 2008. On that day, the satyam stock ended 0.41% up at Rs 135.50.
29 December 2008: Satyam said Professor Krishna G Palepu, non-executive director and Vinod K Dham, non-executive and independent director of the company resigned from the company effective 28 December 2008. The outsourcer did not give any reason for the resignations.
Satyam, before trading hours on the same day had postponed the board meeting set on 29 December 2008 to 10 January 2009 to mull options beyond just a possible share buyback. The company said in a statement its board would consider moves to strengthen the firm's governance structure, including increasing the size and altering the composition of the board. It also said it had hired DSP Merrill Lynch to review the company's 'strategic options' to enhance shareholder value, but did not give further details. On that day, the satyam stock ended 9.41% up at Rs 148.25.
30 December 2008: Media reports suggested some institutional investors in the company had approached IT firms and private equity players for a stake sale. The report cited market participants as its sources. On that day, the satyam stock ended 8.33% up at Rs 160.60.
31 December 2008: Media reports suggested US-based computer firm Hewlett-Packard may buy a stake in Satyam. Hewlett-Packard (HP) was reported to be attracted by the Satyam's lucrative business software practice. Reports suggested that buying stake in Satyam could give HP an opportunity to challenge its rival IBM with bigger, low-cost offshore capabilities. On that day, the satyam stock ended 5.95% up at Rs 170.15.
3 January 2009 (Saturday): Founder-promoters stake declined from 8.64% to 5.13%t as financial institutions with whom the entire stake was pledged dumped the shares. Of the remaining 5.13% stake (around 3.45 crore shares) with the promoters, around 2.19 crore shares (or roughly 63% of the holdings) were still reported to be pledged with various lenders.
6 January 2009: Satyam denied media reports that suggested that Tech Mahindra had approached Satyam for an all-share merger. On the same day, Satyam had announced that the share of promoters' group in the company had further dwindled with lending agency IL&FS Trust Company selling off 1.03 crore shares afresh. On that day, the satyam stock ended 7.31% up at Rs 179.10.
7 January 2009: Satyam's chairman Ramalinga Raju resigned the company and admitted fraud of reporting inflated figures in the accounts of the firm. As per the announcement, Satyam's balance sheet as on 30 September 2008 had inflated cash and bank balances of Rs 5040 crore, inflated debtors of Rs 490 crore and non-existent accrued interest of Rs 376 crore. Against this the liability was understated by Rs 1230 crore.
Raju said the Q2 September 2008 results had overstated operating revenues by Rs 588 crore, thereby overstating the operating profits and cash to that extent.
The gap in the balance sheet has arisen purely on account of inflated profits over the period of last several years, Raju confessed adding that every attempt made to eliminate the gap failed. As the promoters held a small percentage of equity, the concern was the poor performance would result in a takeover, thereby exposing the gap, Raju said.
Raju said in the last 2 years a net amount of Rs 1230 crore was arranged to keep operations going. He said this was done by pledging all the promoter shares and raising funds from known sources by giving all kinds of assurances. Significant dividend payments, acquisitions, capital expenditure to provide for growth did not help matters. Every attempt was made to keep the wheel moving. The last straw was the selling of most of the pledged share by the lenders on account of margin triggers, Raju said.
The aborted Maytas acquisition deal was the last attempt to fill the fictitious assets with real ones, Raju said. Maytas's investors were convinced that this is a good divestment opportunity and a strategic fit, he said.
Raju ended the statement with an apology to Satyam's staff and shareholders and said he was prepared to face the legal consequences.
On the same day, Satyam Computer announced of forming a new team to look into its day-to-day affairs, following the resignation of its chairman Ramalinga. The interim CEO of Satyam, Ram Mynampati, sent a letter to the management and staff, announcing the formation of a new team that consisted of persons who have spent 10 years in the company and twenty years in the industry. On that day, the satyam stock tumbled 77.69% up at Rs 39.95.
8 January 2009: Media reports suggested Satyam's banker Citibank froze more than 30 operational accounts of Satyam Computer. These are trade receivable accounts, and the aim may be to protect the bank's $70-million exposure to the troubled technology firm. Equity markets were shut on that day on account of Moharram.
11 January 2009 (Sunday): In a swift action to salvage the beleaguered Satyam Computer Services, the government, after market hours on Friday (9 January 2009), sacked the remaining three directors erstwhile board on Satyam, including the interim CEO Ram Mynampati. The government then set up a three-member board on 11 January 2009 in a bid to restore confidence in the outsourcing company rocked by India's biggest corporate scandal.
The new three-member board consists of Deepak Parekh, chairman of Housing Development Finance Corporation. Kiran Karnik, former president of the National Association of Software and Service Companies (Nasscom), a technology lobbying group, and C Achutan, a former official at the Securities and Exchange Board of India (Sebi). All the three members would act as independent directors. Corporate Affairs Minister Prem Chand Gupta expressed the hope that the new board would be able to provide the necessary vision, along with responsible and accountable leadership, to the company in this hour of crisis.
23 January 2009: Larsen & Toubro raised its holding in Satyam Computer Services to 12% from 4% earlier. L&T hiked stake in Satyam as the initial cost of investment in Satyam was at risk.
Following the additional share purchase, L&T's average acquisition price of around 12% stake in Satyam dipped to Rs 80 a share from the Rs 174, it paid earlier.
L&T had acquired 4% in Satyam at Rs 174 per share before Satyam's founder B Ramalinga Raju admitted on 7 January 2009 of a Rs 7,000-crore accounting fraud at the IT firm.
If the stake reaches 15%, L&T will then, as per the regulator's takeover guidelines, have to make an open offer for an additional 20% stake in Satyam.
27 January 2009: The government-appointed board of Satyam Computer Services appointed the Boston Consulting Group (BCG) as the management advisor to support the directors and the Satyam leadership team.
Goldman Sachs and Avendus were appointed investment bankers to advise the company on the way forward. A dedicated three-member BCG will work closely, free of charge, during this revival process, Deepak Parekh, board member, had said.
5 February 2009: The government-appointed board of fraud-scarred Satyam Computer Services on Thursday, 5 February 2009, appointed A S Murty, a Satyam executive for 15 years, as chief executive officer (CEO). Murty will be the chief executive with immediate effect, the company said in a statement. Murty was the Global Business Head of Satyam.
The board also said it has received bank lines of credit for Rs 600 crore toward working capital requirements. The money will help the company tide over its financial challenges, the board said.
The board said it had brought on two additional advisers: Homi Khusrokhan, who has served as managing director of Tata Chemicals, Tata Tea, Glaxo Laboratories India and Wellcome India; and Partho Datta, a chartered accountant who will focus on restating the company's scrambled third-quarter results.
6 February 2009: The government announced the appointment of Nasscom past-president Kiran Karnik as chairman of its six-member board.
13 February 2009: The Securities & Exchange Board of India (Sebi) relaxed takeover regulations for companies whose boards have been superseded and replaced by the Government or other regulatory authority. This smoothened the way for a possible sale of Satyam Computer Service, the only company that currently fits this description.
19 February 2009: The Company Law Board (CLB) allowed the government-appointed board of Satyam to bring in a strategic investor through an open bidding process. For this purpose, the CLB also permitted the board to increase the authorised share capital and issue preferential shares.
Currently, the authorised capital of Satyam is 80 crore shares of Rs 2 each, of which 67.3 crore shares have already been issued. The CLB has authorised the Satyam board to pass a resolution to amend the capital clause of the Memorandum of Association to raise its authorised capital. Accordingly, the authorised capital of Satyam will increase from Rs 160 crore comprising 80 crore shares, to Rs 280 crore comprising 140 crore shares.
The Satyam board has been directed to devise a mechanism for transparent, open and competitive process without furthering the interest of any particular acquire. Besides, the board will also have to obtain requisite approvals from the Securities & Exchange Board of India. The process of selection of a strategic investor will be overseen by a retired judge of the Supreme Court or former Chief Justice of India.
6 March 2009: The Sebi approved selling 51% stake in Satyam through global bidding process.
As part of the two-phased bidding process, a chosen investor will acquire newly issued equity shares representing 31% of Satyam's share capital and then make a mandatory minimum public offer to buy a further 20% stake. The bidders are expected to have total net assets in excess of $150 million.
9 March 2009: Satyam commenced a competitive bidding process for selection of an investor to acquire 51% equity stake. Interested bidders were asked to submit a detailed expression of interest and the proof of availability of at least Rs 1500 crore by 20 March 2009.
4 April 2009: The government appointed board of Satyam extended the deadline for submitting financial bids for acquiring a controlling stake in the firm to 13 April 2009 from 9 April 2009 as bidders sought more information.
13 April 2009: Tech Mahindra was declared as the winning bidder for a majority stake in Satyam Computer with a winning bid of Rs 58 a share. Tech Mahindra to pay Rs 1750 crore for a preferential allotment of 30.28 crore shares, amounting to 31% of Satyam's equity. This will be followed by an open offer to acquire an additional 20% within 55 days. The acquisition is expected to cost the company around Rs 2,900 crore.
After evaluating each bidder's technical bid the government appointed board of Satyam Computer and Justice Barucha confirmed Tech Mahindra as the highest bidder as there was no bid within atleast 90% of the Tech Mahindra's bid. Larsen & Toubro (L&T), and Wilbur Ross were others who put in technical bid for Satyam Computer Services. L&T had bid at Rs 45.90 a share and Wilbur Ross at Rs 20.
20 April 2009:Tech Mahindra deposited the funds needed for taking the majority stake in fraud-hit Satyam Computer. Tech Mahindra was to pay Rs 1750 million for a 31% preferential allotment of new shares and would then make an open offer for a further 20% of Satyam.
Funds for the 31% stake as well as the open offer have been deposited by Tech Mahindra, Satyam's government-appointed chairman Kiran Karnik had told media at Satyam's headquarters in Hyderabad.
22 April 2009:Tech Mahindra said its open offer for an additional 20% stake in Satyam Computer at Rs 58 per share will begin on 12 June 2009 and close on 1 July 2009. The open offer to Satyam’s shareholders was made by Venturbay Consultants, an unlisted arm of Tech Mahindra.
The maximum consideration payable under the open offer is Rs 1154 crore. Pursuant to successful completion of the offer, Tech Mahindra's holding in Satyam would go up to 51%. Kotak Mahindra Capital Company is the manager to the offer.
21 June 2009: Satyam Computer Services has been renamed Mahindra Satyam, two months after being taken over by Bangalore-based Tech Mahindra. The new robust brand is envisaged to represent the core values of the Mahindra group and the inherent strength of the Satyam brand.
Friday, July 3, 2009
Satyam bullish under 'umbrella of governance'
ZDNet Asia, July 03, 2009
SINGAPORE--It has had the dubious honor of being dubbed the "Enron of India", but the revamped Satyam is now "extremely bullish" about its Asia-Pacific market prospects and confident of its governance, say company executives.
The newly-minted Mahindra Satyam--after the successful bid by Indian services giant Tech Mahindra--has tweaked its model of governance, which had been a "perceivable flaw", said Vineet Nayyar, executive vice chairman of Tech Mahindra and Mahindra Satyam.
Former Satyam Chairman B. Ramalinga Raju admitted to fraud and resigned in January amid a scandal over inflated profit reporting.
Speaking at a media briefing in Singapore Friday, Nayyar noted that the company's governance model has since been reorganized to allow greater responsibility and accountability. He added that incentives between sales and delivery teams have also been realigned, and there is greater transparency in the reporting of costs and profitability in the various business units.
"What you see in Mahindra Satyam is the congruence of the capabilities, skills and depth of knowledge of Satyam...now under the umbrella of governance which will adhere to the highest ethical standards [that Mahindra is known for]," he said.
Region's business picking up
Nayyar acknowledged that Satyam lost out on a large Telstra request-for-proposal issued earlier this year, but said the company's customers in the region still have "fairly positive" sentiments toward the company.
"It's not as if we've been banned or barred... We did lose a very large order, but there's still life beyond that [Telstra] order," he said. "On the other hand, all other clients [that] have stayed with us are staying with us, and are giving us further orders."
Philip Carter, IDC's associate research director for services in the Asia-Pacific region, told ZDNet Asia that apart from Mahindra Satyam losing a couple of key clients such as Telstra and the National Australia Bank, the company has made at least one recent deal in the region. Singapore's Land Transport Authority, he said, had awarded Mahindra Satyam a contract several weeks ago.
Over in the United Kingdom and Ireland, Satyam's existing clientele had signed US$2.5 million worth of contracts with the company during the first quarter of financial year 2009, Satyam's U.K. and Ireland head for noted earlier this month.
Carter said Tech Mahindra's coming into the Satyam picture has had a positive touch, but there were also challenges moving forward. A number of Mahindra Satyam executives hailed from Tech Mahindra, essentially a second-tier player focused on one vertical--telecoms. That presents management credibility issues, as well as a danger of talent attrition given management changes.
In addition, while the backing of Tech Mahindra may offer credibility in terms of financial stability and corporate governance, there is a "long process" in terms of sustaining and that credibility in the regional market, said Carter.
"There's been positive energy in terms of credibility building up, but I won't go as far to say they'll make the shortlist for every single major services contract," he pointed out.
Expansion in the pipeline
According to Mahindra Satyam's Asia-Pacific managing director Rohit Ghandi, the company is "extremely bullish" about the way forward.
The new Satyam, he added, would "be gunning very strongly for new business", through a combination of selling additional services to existing clients and pushing for new customer wins. For instance, the company is planning to roll out infrastructure services as well as BPO (business process outsourcing) services in Australia and New Zealand (ANZ).
Ghandi said Mahindra Satyam would concentrate on growing market share in countries Satyam formerly was active in--ANZ, China, Japan, Malaysia, Singapore and Thailand--before making expansion moves. However, Indonesia is a likely target as Tech Mahindra has an existing strong presence in the market.
The Asia-Pacific region, he added, is targeted to contribute 10 percent to 15 percent to Mahindra Satyam's overall revenues. Singapore, with headcount in excess of 400, will remain the regional headquarters for the company. Mahindra Satyam has over 2,000 employees across the region.
Nayyar added that Tech Mahindra and Mahindra Satyam will "for the time being" be run as separate entities but will tap on each other's relevant expertise as well as cross-selling opportunities. The two companies, he noted, have synergies that may result the merging of operations, but that would not take place at least in the next one to two years.
SINGAPORE--It has had the dubious honor of being dubbed the "Enron of India", but the revamped Satyam is now "extremely bullish" about its Asia-Pacific market prospects and confident of its governance, say company executives.
The newly-minted Mahindra Satyam--after the successful bid by Indian services giant Tech Mahindra--has tweaked its model of governance, which had been a "perceivable flaw", said Vineet Nayyar, executive vice chairman of Tech Mahindra and Mahindra Satyam.
Former Satyam Chairman B. Ramalinga Raju admitted to fraud and resigned in January amid a scandal over inflated profit reporting.
Speaking at a media briefing in Singapore Friday, Nayyar noted that the company's governance model has since been reorganized to allow greater responsibility and accountability. He added that incentives between sales and delivery teams have also been realigned, and there is greater transparency in the reporting of costs and profitability in the various business units.
"What you see in Mahindra Satyam is the congruence of the capabilities, skills and depth of knowledge of Satyam...now under the umbrella of governance which will adhere to the highest ethical standards [that Mahindra is known for]," he said.
Region's business picking up
Nayyar acknowledged that Satyam lost out on a large Telstra request-for-proposal issued earlier this year, but said the company's customers in the region still have "fairly positive" sentiments toward the company.
"It's not as if we've been banned or barred... We did lose a very large order, but there's still life beyond that [Telstra] order," he said. "On the other hand, all other clients [that] have stayed with us are staying with us, and are giving us further orders."
Philip Carter, IDC's associate research director for services in the Asia-Pacific region, told ZDNet Asia that apart from Mahindra Satyam losing a couple of key clients such as Telstra and the National Australia Bank, the company has made at least one recent deal in the region. Singapore's Land Transport Authority, he said, had awarded Mahindra Satyam a contract several weeks ago.
Over in the United Kingdom and Ireland, Satyam's existing clientele had signed US$2.5 million worth of contracts with the company during the first quarter of financial year 2009, Satyam's U.K. and Ireland head for noted earlier this month.
Carter said Tech Mahindra's coming into the Satyam picture has had a positive touch, but there were also challenges moving forward. A number of Mahindra Satyam executives hailed from Tech Mahindra, essentially a second-tier player focused on one vertical--telecoms. That presents management credibility issues, as well as a danger of talent attrition given management changes.
In addition, while the backing of Tech Mahindra may offer credibility in terms of financial stability and corporate governance, there is a "long process" in terms of sustaining and that credibility in the regional market, said Carter.
"There's been positive energy in terms of credibility building up, but I won't go as far to say they'll make the shortlist for every single major services contract," he pointed out.
Expansion in the pipeline
According to Mahindra Satyam's Asia-Pacific managing director Rohit Ghandi, the company is "extremely bullish" about the way forward.
The new Satyam, he added, would "be gunning very strongly for new business", through a combination of selling additional services to existing clients and pushing for new customer wins. For instance, the company is planning to roll out infrastructure services as well as BPO (business process outsourcing) services in Australia and New Zealand (ANZ).
Ghandi said Mahindra Satyam would concentrate on growing market share in countries Satyam formerly was active in--ANZ, China, Japan, Malaysia, Singapore and Thailand--before making expansion moves. However, Indonesia is a likely target as Tech Mahindra has an existing strong presence in the market.
The Asia-Pacific region, he added, is targeted to contribute 10 percent to 15 percent to Mahindra Satyam's overall revenues. Singapore, with headcount in excess of 400, will remain the regional headquarters for the company. Mahindra Satyam has over 2,000 employees across the region.
Nayyar added that Tech Mahindra and Mahindra Satyam will "for the time being" be run as separate entities but will tap on each other's relevant expertise as well as cross-selling opportunities. The two companies, he noted, have synergies that may result the merging of operations, but that would not take place at least in the next one to two years.
Who's who in Mahindra Satyam
Executive New post Former post
Vineet Nayyar Executive vice chairman, Tech Mahindra and Mahindra Satyam Vice chairman and managing director, Tech Mahindra
C.P. Gurnani CEO Head of global operations, sales and marketing, Tech Mahindra
S. Durga Shankar CFO Senior vice president, mergers & acquisitions, Mahindra & Mahindra
A.S. Murthy CTO CEO, Satyam
Rakesh Soni COO; head of delivery for manufacturing, banking and financial services, emerging verticals and strategic accounts COO, Tech Mahindra
Keshab Panda Head, business development and operations for manufacturing, banking and financial services, emerging verticals and strategic accounts Chief of Continental Europe, energy and utilities and manufacturing operations, Satyam
Atul Kanwar Head, business development and operations for regional business groups Chief business development officer, Tech Mahindra
Manish Mehta Head, delivery for regional business groups Head, system, analysis and program (SAP) development, Satyam
T.R. Anand Head, business development and operations for telecoms, tech infrastructure, media & entertainment, and semiconductor (TIMES); head, channel business Director and senior vice president for TIMES, Satyam
Ravi Bommakanti Head, delivery for TIMES Director and senior vice president and global head of insurance, Satyam
Hari T Chief people officer and chief marketing officer Global marketing head, Satyam
Source: Mahindra Satyam and HT Media
As Reported by-:ZDNet Asia
Vineet Nayyar Executive vice chairman, Tech Mahindra and Mahindra Satyam Vice chairman and managing director, Tech Mahindra
C.P. Gurnani CEO Head of global operations, sales and marketing, Tech Mahindra
S. Durga Shankar CFO Senior vice president, mergers & acquisitions, Mahindra & Mahindra
A.S. Murthy CTO CEO, Satyam
Rakesh Soni COO; head of delivery for manufacturing, banking and financial services, emerging verticals and strategic accounts COO, Tech Mahindra
Keshab Panda Head, business development and operations for manufacturing, banking and financial services, emerging verticals and strategic accounts Chief of Continental Europe, energy and utilities and manufacturing operations, Satyam
Atul Kanwar Head, business development and operations for regional business groups Chief business development officer, Tech Mahindra
Manish Mehta Head, delivery for regional business groups Head, system, analysis and program (SAP) development, Satyam
T.R. Anand Head, business development and operations for telecoms, tech infrastructure, media & entertainment, and semiconductor (TIMES); head, channel business Director and senior vice president for TIMES, Satyam
Ravi Bommakanti Head, delivery for TIMES Director and senior vice president and global head of insurance, Satyam
Hari T Chief people officer and chief marketing officer Global marketing head, Satyam
Source: Mahindra Satyam and HT Media
As Reported by-:ZDNet Asia
Satyam: PwC CEO raises more questions
2 Jul 2009
HYDERABAD: Chairman and CEO of PricewaterhouseCoopers, India, Ramesh Rajan’s statement given to the Central Bureau of Investigation (CBI) last week has raised more questions. Even as Rajan admitted to the CBI that Satyam’s audit was not done by Price Waterhouse (PW) and that S Gopalakrishnan and Srinivas Talluri were in no way attached to the firm PW, chartered accountants are surprised as to how the CEO never issued such statements on earlier occasions, when balance sheets of several listed companies were signed under the name of PW, by partners of Lovelock & Lewes.
Apart from Gopalakrishnan and Talluri, this list includes the names of P Ramakrishna, Sharmila A Karve, Anuradha Tuli and Kaushik Dutta. Among the various companies whose books have been audited by these six people are, GMR, Lanco, Saint Gobain, Moser Baer India Limited, Rain Commodities Limited, Infoedge and Satyam.
The balance sheets of these companies for 2007 and 2008, some of which are in the possession of this newspaper, clearly states that the firm’s share holders had formally appointed PW as its statutory auditor. The books have, however, been signed by either of these auditors who are not partners with PW but Lovelock & Lewes.
“How is it that PW never made an issue of this then? The only explanation perhaps is that the firm was also receiving certain benefits from these auditors and, hence, chose to keep quiet,” alleges a city-based chartered accountant. But this is not the only trap PW is caught in.
Considering that the firm did not refute this partnership by estoppels (or presumption), as called in auditing parlance, with the six auditors, PW can at any point be pulled up under the Companies Act of 1956.
Section 11 of this Act clearly states that “no company, association or partnership consisting of more than 20 persons shall be formed for the purpose of carrying out any other business (apart from banking)...”. However, if these six auditors are added to the list of existing partners of PW the number exceeds this figure. Elaborating on this, another CA says, “There are two firms by the name PW in India. The one with head office in Kolkata has 20 partners and the other with head office in New Delhi has 18 partners (as per ICAI records, also available to TOI). Now, if we add these six auditors to any of these firms the number will be more than 20.”
“This in turn declares the two PW firms as unregistered companies according to the Act and, hence, under Section 226 of the same Act, does not authorise any of its partners to audit the books of any company,” said sources further adding, “In that case the audits conducted by these partners so far stand invalid.”
Questioning why PW has remained quiet about all this until now, CAs and other auditors in the country say that the firm is also punishable for this under various sections of the Companies Act.
HYDERABAD: Chairman and CEO of PricewaterhouseCoopers, India, Ramesh Rajan’s statement given to the Central Bureau of Investigation (CBI) last week has raised more questions. Even as Rajan admitted to the CBI that Satyam’s audit was not done by Price Waterhouse (PW) and that S Gopalakrishnan and Srinivas Talluri were in no way attached to the firm PW, chartered accountants are surprised as to how the CEO never issued such statements on earlier occasions, when balance sheets of several listed companies were signed under the name of PW, by partners of Lovelock & Lewes.
Apart from Gopalakrishnan and Talluri, this list includes the names of P Ramakrishna, Sharmila A Karve, Anuradha Tuli and Kaushik Dutta. Among the various companies whose books have been audited by these six people are, GMR, Lanco, Saint Gobain, Moser Baer India Limited, Rain Commodities Limited, Infoedge and Satyam.
The balance sheets of these companies for 2007 and 2008, some of which are in the possession of this newspaper, clearly states that the firm’s share holders had formally appointed PW as its statutory auditor. The books have, however, been signed by either of these auditors who are not partners with PW but Lovelock & Lewes.
“How is it that PW never made an issue of this then? The only explanation perhaps is that the firm was also receiving certain benefits from these auditors and, hence, chose to keep quiet,” alleges a city-based chartered accountant. But this is not the only trap PW is caught in.
Considering that the firm did not refute this partnership by estoppels (or presumption), as called in auditing parlance, with the six auditors, PW can at any point be pulled up under the Companies Act of 1956.
Section 11 of this Act clearly states that “no company, association or partnership consisting of more than 20 persons shall be formed for the purpose of carrying out any other business (apart from banking)...”. However, if these six auditors are added to the list of existing partners of PW the number exceeds this figure. Elaborating on this, another CA says, “There are two firms by the name PW in India. The one with head office in Kolkata has 20 partners and the other with head office in New Delhi has 18 partners (as per ICAI records, also available to TOI). Now, if we add these six auditors to any of these firms the number will be more than 20.”
“This in turn declares the two PW firms as unregistered companies according to the Act and, hence, under Section 226 of the same Act, does not authorise any of its partners to audit the books of any company,” said sources further adding, “In that case the audits conducted by these partners so far stand invalid.”
Questioning why PW has remained quiet about all this until now, CAs and other auditors in the country say that the firm is also punishable for this under various sections of the Companies Act.
Andhra Pradesh includes inflated Satyam figures in IT export revenues
2 Jul 2009
HYDERABAD: The Andhra Pradesh government on Thursday said the state has posted a 24.5 per cent growth in information technology export revenues during 2008-09, higher than the projected national growth of 20.65 per cent, but this includes the inflated figures submitted by the scam-tainted Satyam Computer Services.
The exports during the year were Rs 32,509 crore against Rs 26,122 crore during 2007-08. The growth rate, however, has come down to 24.5 percent from 41 percent in the previous year.
The IT/ITES export figures for the last financial year include Rs 4,231.93 crore of Satyam, making it the top most exporter. The fraud-hit IT major had claimed exports of Rs 3,331.30 crore during 2007-08.
Officials of Software Technology Parks of India (STPI) here said they had to go by the figures submitted by the previous management of Satyam.
"We have included the figures after due certification process," STPI Hyderabad director P Venugopal told a news conference Thursday.
He, however, hastened to add that validation of the same would be done only in September.
Satyam founder and former chairman B. Ramalinga Raju shocked corporate India in January this by admitting to committing a Rs 7,800-crore accounting fraud by inflating the company's profits over several years.
Tech Mahindra bought Satyam in an open auction in April and last month re-named it as Mahindra Satyam.
STPI director general N. Krishnan said there could be 5 to 10 percent variation in the export figures submitted by the company and the actual exports. The audited figures will be available in August or September, he said.
Krishnan said the exports from STPI units were estimated at Rs 204,662 crore against Rs 180,155 crore 2007-08.
"The national growth rate has been lower than that of Andhra Pradesh," he said
HYDERABAD: The Andhra Pradesh government on Thursday said the state has posted a 24.5 per cent growth in information technology export revenues during 2008-09, higher than the projected national growth of 20.65 per cent, but this includes the inflated figures submitted by the scam-tainted Satyam Computer Services.
The exports during the year were Rs 32,509 crore against Rs 26,122 crore during 2007-08. The growth rate, however, has come down to 24.5 percent from 41 percent in the previous year.
The IT/ITES export figures for the last financial year include Rs 4,231.93 crore of Satyam, making it the top most exporter. The fraud-hit IT major had claimed exports of Rs 3,331.30 crore during 2007-08.
Officials of Software Technology Parks of India (STPI) here said they had to go by the figures submitted by the previous management of Satyam.
"We have included the figures after due certification process," STPI Hyderabad director P Venugopal told a news conference Thursday.
He, however, hastened to add that validation of the same would be done only in September.
Satyam founder and former chairman B. Ramalinga Raju shocked corporate India in January this by admitting to committing a Rs 7,800-crore accounting fraud by inflating the company's profits over several years.
Tech Mahindra bought Satyam in an open auction in April and last month re-named it as Mahindra Satyam.
STPI director general N. Krishnan said there could be 5 to 10 percent variation in the export figures submitted by the company and the actual exports. The audited figures will be available in August or September, he said.
Krishnan said the exports from STPI units were estimated at Rs 204,662 crore against Rs 180,155 crore 2007-08.
"The national growth rate has been lower than that of Andhra Pradesh," he said
Friday, June 26, 2009
Gurnani wants Mahindra Satyam known for transparency
25 Jun 2009, PTI
MUMBAI: New Mahindra Satyam CEO C P Gurnani has said that he would strive for making the company known for its transparency and governance standards.
In a communication to associates in the company, Gurnani, who was heading the global operations of Tech Mahindra before his new assignment said, "We have redesigned the organisation structure to make it more customer-centric and agile and decision making in the company is being accelerated."
He further said that the access to customers and geographic penetration is enhanced.
"My priority is to get the company re-energised and leverage these strengths (delivery excellence, domain experiences) effectively, to gain traction for accelerated growth," Gurnani said in a letter written to -----
Tech Mahindra named Gurnani to succeed A S Murthy on Tuesday.
"I am interested in future when we are recognised for our governance standards, transparency and values. I am interested in future when our associates are fearless and can match up to business challenge that comes their way," he said.
"... Unfortunate events following January have taken thier toll on the company and have seriously dented out image, business and morale. Ever since April, when Tech Mahindra emerged as an investor, I have had the opportunity to travel and meet some of our customers... one thing common was whatever be the past, they are interested in the future.
MUMBAI: New Mahindra Satyam CEO C P Gurnani has said that he would strive for making the company known for its transparency and governance standards.
In a communication to associates in the company, Gurnani, who was heading the global operations of Tech Mahindra before his new assignment said, "We have redesigned the organisation structure to make it more customer-centric and agile and decision making in the company is being accelerated."
He further said that the access to customers and geographic penetration is enhanced.
"My priority is to get the company re-energised and leverage these strengths (delivery excellence, domain experiences) effectively, to gain traction for accelerated growth," Gurnani said in a letter written to -----
Tech Mahindra named Gurnani to succeed A S Murthy on Tuesday.
"I am interested in future when we are recognised for our governance standards, transparency and values. I am interested in future when our associates are fearless and can match up to business challenge that comes their way," he said.
"... Unfortunate events following January have taken thier toll on the company and have seriously dented out image, business and morale. Ever since April, when Tech Mahindra emerged as an investor, I have had the opportunity to travel and meet some of our customers... one thing common was whatever be the past, they are interested in the future.
India's Satyam Computer announces new brand name
MUMBAI (AFP) — Indian outsourcing firm Satyam Computer announced Monday it was re-branding itself as it tries to recover from the country's worst-ever corporate scandal.
In a statement to the Mumbai stock exchange, the firm said it will now trade under the name "Mahindra Satyam", reflecting the purchase of the company two months ago by mid-sized outsourcer Tech Mahindra.
The company will also adopt a new logo from the Mahindra group.
In April, Tech Mahindra paid nearly 600 million dollars for a majority share of Satyam, which has been struggling since its founder confessed in January to falsifying accounts in India's biggest accounting fraud.
"The re-branding symbolises an amalgamation of the Mahindra group's values with Satyam's fabled expertise," said Anand Mahindra, vice chairman of the Mahindra group.
A statement said the firm would maintain Satyam in its name because it signifies "commitment, purpose and proficiency."
Satyam, ranked as India's fourth-largest outsourcer by revenues when the scandal broke, acts as a back office for some of the world's biggest companies including Nestle, General Electric and General Motors.
Earlier this month, the Hyderabad-based firm reported modest but better-than-expected quarterly profits, raising hopes it could recover.
In a statement to the Mumbai stock exchange, the firm said it will now trade under the name "Mahindra Satyam", reflecting the purchase of the company two months ago by mid-sized outsourcer Tech Mahindra.
The company will also adopt a new logo from the Mahindra group.
In April, Tech Mahindra paid nearly 600 million dollars for a majority share of Satyam, which has been struggling since its founder confessed in January to falsifying accounts in India's biggest accounting fraud.
"The re-branding symbolises an amalgamation of the Mahindra group's values with Satyam's fabled expertise," said Anand Mahindra, vice chairman of the Mahindra group.
A statement said the firm would maintain Satyam in its name because it signifies "commitment, purpose and proficiency."
Satyam, ranked as India's fourth-largest outsourcer by revenues when the scandal broke, acts as a back office for some of the world's biggest companies including Nestle, General Electric and General Motors.
Earlier this month, the Hyderabad-based firm reported modest but better-than-expected quarterly profits, raising hopes it could recover.
Satyam: Second round of top-level appointments on Thursday
24 Jun 2009, PTI
New Delhi: Mahindra Satyam will see another round of reshuffling of top executives tomorrow that will see outgoing CEO AS Murthy getting a new designation and US-based head of commercial division Ram Mynampati being replaced.
Mynampati, who was the President of the Commercial and Healthcare Divisions, has been replaced by Keshav Panda, sources close to the development said.
Panda, who was the head of the Europe business would be replaced by someone from within the Tech Mahindra Group.
Mynampati, also a former board member, had taken over as the interim Chief Executive in January after founder B Ramalinga Raju admitted to have cooked the books of the company for years.
Mynampati was subsequently removed after the government stepped in and disbanded the board and appointed new directors.
Besides this, Tech Mahindra is likely to be make further announcements on top level rejig tomorrow in Hyderabad, the source added.
Yesterday, Tech Mahindra appointed C P Gurnani CEO of Mahindra Satyam and S Durgashankar as the new Chief Financial Officer with immediate effect.
Gurnani succeeded A S Murthy, who was appointed as CEO by the government board after the multi-crore rupee scam broke out in the then Satyam Computer Services. Gurnani has been heading the global operations of Tech Mahindra.
New Delhi: Mahindra Satyam will see another round of reshuffling of top executives tomorrow that will see outgoing CEO AS Murthy getting a new designation and US-based head of commercial division Ram Mynampati being replaced.
Mynampati, who was the President of the Commercial and Healthcare Divisions, has been replaced by Keshav Panda, sources close to the development said.
Panda, who was the head of the Europe business would be replaced by someone from within the Tech Mahindra Group.
Mynampati, also a former board member, had taken over as the interim Chief Executive in January after founder B Ramalinga Raju admitted to have cooked the books of the company for years.
Mynampati was subsequently removed after the government stepped in and disbanded the board and appointed new directors.
Besides this, Tech Mahindra is likely to be make further announcements on top level rejig tomorrow in Hyderabad, the source added.
Yesterday, Tech Mahindra appointed C P Gurnani CEO of Mahindra Satyam and S Durgashankar as the new Chief Financial Officer with immediate effect.
Gurnani succeeded A S Murthy, who was appointed as CEO by the government board after the multi-crore rupee scam broke out in the then Satyam Computer Services. Gurnani has been heading the global operations of Tech Mahindra.
Satyam case: US accounts under lens
25 Jun, 2009
HYDERABAD: The CBI now investigating diversion of Satyam funds abroad have identified three "suspicious" foreign bank accounts in the US which are held in the name of three different individuals.
About Rs 60 crore belonging to Satyam were channelised into the accounts that stand in the name of these three non Indian persons.
When CBI sleuths questioned Ramalinga Raju and Rama Raju on these accounts they claimed that three foreign nationals were officially connected to Satyam and the money was deposited for business reasons.
But the CBI did not find these transactions reflected in Satyam's books and with the help of Interpol is now seeking to crack the details about these individuals. CBI sources also told that the agency has discovered several transactions made through Indian banks but has not been able to track details of end users of these funds.
What is proving difficult is that the movements took place on foreign soil where CBI has no presence. "We have to depend on Interpol and other international agencies. Its a long drawn out process but we have set it into motion," CBI sources said.
CBI also suspects that what has been discovered is only the tip of an iceberg and there might be many more such foreign accounts yet to be traced. Meanwhile, the local CBI court posted the matter pertaining to conducting of lie detector tests on Raju brothers to June 30 following request of counsel for Rajus who sought some more time to present their arguments in this case.
HYDERABAD: The CBI now investigating diversion of Satyam funds abroad have identified three "suspicious" foreign bank accounts in the US which are held in the name of three different individuals.
About Rs 60 crore belonging to Satyam were channelised into the accounts that stand in the name of these three non Indian persons.
When CBI sleuths questioned Ramalinga Raju and Rama Raju on these accounts they claimed that three foreign nationals were officially connected to Satyam and the money was deposited for business reasons.
But the CBI did not find these transactions reflected in Satyam's books and with the help of Interpol is now seeking to crack the details about these individuals. CBI sources also told that the agency has discovered several transactions made through Indian banks but has not been able to track details of end users of these funds.
What is proving difficult is that the movements took place on foreign soil where CBI has no presence. "We have to depend on Interpol and other international agencies. Its a long drawn out process but we have set it into motion," CBI sources said.
CBI also suspects that what has been discovered is only the tip of an iceberg and there might be many more such foreign accounts yet to be traced. Meanwhile, the local CBI court posted the matter pertaining to conducting of lie detector tests on Raju brothers to June 30 following request of counsel for Rajus who sought some more time to present their arguments in this case.
Council to decide on draft report
22 Jun 2009
MANGALORE: The central council of The Institute of Chartered Accountants of India (ICAI) will meet within the next fortnight to take a final call on the draft report submitted by the high powered committee set up by it to go into la affaire Satyam. The council, which met in Mumbai two-days ago has had preliminary discussions on the draft report submitted by the committee and the ICAI will go public with its findings after the meeting.
ICAI president Uttam Prakash Agarwal told reporters here on Monday that the high powered committee headed by him had quizzed the Satyam higher ups indicted for their alleged role in the IT firm violating laid down procedures of corporate governance. The report has taken note of the various procedural lapses that have occurred in Satyam under Ramalinga Raju and will suggest steps to avoid its recurrence in Indian corporate set up.
Agarwal clarified that ICAI does not have powers to take disciplinary action against Price Waterhouse Coopers (PWC), auditors of Satyam, who allegedly fudged the balance sheet of the IT firm. But the disciplinary committee of ICAI will certainly take necessary action against the partners of PWC for any of their professional misconduct if proved as per findings of the committee and could lead to cancellation of their licenses, he said.
MANGALORE: The central council of The Institute of Chartered Accountants of India (ICAI) will meet within the next fortnight to take a final call on the draft report submitted by the high powered committee set up by it to go into la affaire Satyam. The council, which met in Mumbai two-days ago has had preliminary discussions on the draft report submitted by the committee and the ICAI will go public with its findings after the meeting.
ICAI president Uttam Prakash Agarwal told reporters here on Monday that the high powered committee headed by him had quizzed the Satyam higher ups indicted for their alleged role in the IT firm violating laid down procedures of corporate governance. The report has taken note of the various procedural lapses that have occurred in Satyam under Ramalinga Raju and will suggest steps to avoid its recurrence in Indian corporate set up.
Agarwal clarified that ICAI does not have powers to take disciplinary action against Price Waterhouse Coopers (PWC), auditors of Satyam, who allegedly fudged the balance sheet of the IT firm. But the disciplinary committee of ICAI will certainly take necessary action against the partners of PWC for any of their professional misconduct if proved as per findings of the committee and could lead to cancellation of their licenses, he said.
Saturday, June 13, 2009
Rajus challenge ED order
10 Jun 2009
HYDERABAD: B Ramalinga Raju, his brother B Rama Raju and Satyam Computers former chief finance officer Vadlamani Srinivas on Tuesday approached the AP High Court challenging the orders of a lower court which permitted the Enforcement Directorate to question them in the Satyam scandal.
It can be recalled the fourteenth additional chief metropolitan magistrate court, Nampally, permitted the ED to question Rajus, V Srinivas and former auditors of Price Waterhouse.
The ED booked a case against them under the provisions of Money Laundering Act. The petitioners contended that the order of the lower court was illegal as the alleged offence against them does not fall under the purview of this Act. The High Court will hear the petition on Wednesday.
HYDERABAD: B Ramalinga Raju, his brother B Rama Raju and Satyam Computers former chief finance officer Vadlamani Srinivas on Tuesday approached the AP High Court challenging the orders of a lower court which permitted the Enforcement Directorate to question them in the Satyam scandal.
It can be recalled the fourteenth additional chief metropolitan magistrate court, Nampally, permitted the ED to question Rajus, V Srinivas and former auditors of Price Waterhouse.
The ED booked a case against them under the provisions of Money Laundering Act. The petitioners contended that the order of the lower court was illegal as the alleged offence against them does not fall under the purview of this Act. The High Court will hear the petition on Wednesday.
Thursday, June 11, 2009
Tech Mahindra says will not hike Satyam offer price
11 Jun 2009, 2028 PTI
HYDERABAD: In the face of surge in stock prices of Satyam to about Rs 81 a share on the eve of the open offer for beleaguered company, its new owner Tech Mahindra on Thursday said it will not hike the offer price.
"Our agreement with the market regulator SEBI is for Rs 58 a share (the price at which it acquired 31 per cent stake in the open bidding)," Vineet Nayyar, Chief Executive of Tech Mahindra, told media after the Satyam board meeting.
Asked about options in case the open offer was not fully subscribed, Nayyar said "in case we do not get adequate response, we will go for preferential issue to take our holdings in the company to 42 per cent."
Satyam shares prices have been rising for the past three straight sessions after the company reported better than expected financial results on Tuesday. It posted a stand-alone profit of Rs 181 crore for the October-December 2008 quarter. However, the government-appointed board has decided against endorsing the open offer saying it would be construed as a "negative statement" about fundamentals.
Chairman of Satyam Board Kiran Karnik in a regulatory filling with the US market regulator SEC said, "that supporting the public open offer would tantamount to recommending the share holders to sell their holdings in Satyam."
Karnik further said some of the government-appointed members of the board may be disengaged from the firm within the next week. "Some of the (nominee) board members may leave Satyam within next week," Karnik said.
Following disclosure of accounting fraud by the founder Ramanlinga Raju on January 7, the goevrnemnt supeseded the board of the IT firm and appointed its own nominees to run the firm.
The goevrnment nominees include Kiran Karnik, CII chief mentor Tarun Das, HDFC Chairman Deepak Parerk and former ICAI President T M Manoharan.
HYDERABAD: In the face of surge in stock prices of Satyam to about Rs 81 a share on the eve of the open offer for beleaguered company, its new owner Tech Mahindra on Thursday said it will not hike the offer price.
"Our agreement with the market regulator SEBI is for Rs 58 a share (the price at which it acquired 31 per cent stake in the open bidding)," Vineet Nayyar, Chief Executive of Tech Mahindra, told media after the Satyam board meeting.
Asked about options in case the open offer was not fully subscribed, Nayyar said "in case we do not get adequate response, we will go for preferential issue to take our holdings in the company to 42 per cent."
Satyam shares prices have been rising for the past three straight sessions after the company reported better than expected financial results on Tuesday. It posted a stand-alone profit of Rs 181 crore for the October-December 2008 quarter. However, the government-appointed board has decided against endorsing the open offer saying it would be construed as a "negative statement" about fundamentals.
Chairman of Satyam Board Kiran Karnik in a regulatory filling with the US market regulator SEC said, "that supporting the public open offer would tantamount to recommending the share holders to sell their holdings in Satyam."
Karnik further said some of the government-appointed members of the board may be disengaged from the firm within the next week. "Some of the (nominee) board members may leave Satyam within next week," Karnik said.
Following disclosure of accounting fraud by the founder Ramanlinga Raju on January 7, the goevrnemnt supeseded the board of the IT firm and appointed its own nominees to run the firm.
The goevrnment nominees include Kiran Karnik, CII chief mentor Tarun Das, HDFC Chairman Deepak Parerk and former ICAI President T M Manoharan.
Tuesday, June 9, 2009
Satyam buy: Tech Mahindra raises Rs 550 cr from Tata Capital, IDFC
9 Jun 2009, PTI
NEW YORK: To fund its takeover of scam-hit Satyam Computer, Tech Mahindra has raised Rs 550 crore from Tata Capital and IDFC by issuing debentures convertible into shares of its acquisition vehicle Venturbay Consultants.
Besides, Tech Mahindra has also borrowed Rs 1,450 crore from various banks, mutual funds, institutions and NBFCs at an interest rate of 10 per cent, part of which has been used for funding the acquisition of Satyam.
Disclosing Tech Mahindra's source of funds for the deal, a regulatory filing by the beleaguered IT firm here said the funding was from "internal resources, optionally convertible domestic debt, equity by Tech Mahindra in Venturbay and debt extended by Tech Mahindra to Venturbay."
In the first phase of acquisition, Tech Mahindra had paid about Rs 1,756 crore for 31 per cent equity through preferential allotment of shares in Satyam which is also listed at NYSE besides Indian bourses.
The filing with the US market regulator SEC said here that "Tech Mahindra has infused funds in Venturebay by using cash on hand" in connection with the initial 31 per cent stake purchase and the subsequent Rs 1,129 crore open offer for further 20 per cent equity.
NEW YORK: To fund its takeover of scam-hit Satyam Computer, Tech Mahindra has raised Rs 550 crore from Tata Capital and IDFC by issuing debentures convertible into shares of its acquisition vehicle Venturbay Consultants.
Besides, Tech Mahindra has also borrowed Rs 1,450 crore from various banks, mutual funds, institutions and NBFCs at an interest rate of 10 per cent, part of which has been used for funding the acquisition of Satyam.
Disclosing Tech Mahindra's source of funds for the deal, a regulatory filing by the beleaguered IT firm here said the funding was from "internal resources, optionally convertible domestic debt, equity by Tech Mahindra in Venturbay and debt extended by Tech Mahindra to Venturbay."
In the first phase of acquisition, Tech Mahindra had paid about Rs 1,756 crore for 31 per cent equity through preferential allotment of shares in Satyam which is also listed at NYSE besides Indian bourses.
The filing with the US market regulator SEC said here that "Tech Mahindra has infused funds in Venturebay by using cash on hand" in connection with the initial 31 per cent stake purchase and the subsequent Rs 1,129 crore open offer for further 20 per cent equity.
Satyam spends over Rs 1,000 cr on salaries in Jan-March 2009
9 Jun 2009, PTI
MUMBAI: Scam-hit Satyam Computer on Tuesday said that it has spent over Rs 1,000 crore on paying salaries to its employees in the first three months of this year.
According to the cash outlays information of the company for the first three months of this year, Satyam spent a total of Rs 1,026 crore on paying salaries and another Rs 342.72 crore in other employee-related segments.
The company made a cash outlay of Rs 91.17 crore on medical insurance for employees and Rs 251.55 crore on statutory compliance, the company said in the filing to the stock exchanges.
Overall, the company's total operating cash outlays stood at Rs 1,836 crore at the end of March this year.
The other expenditures of the company include - sub contractors, rent and utilities, travel and forex and other operating expenses.
At the end of March this year, the company's total headcount stood at 41,622, while its key subsidiaries, including Satyam BPO, had an employee strength of 3,828 associates.
Further, the non-operating cash outlays by the company in the three months period include - capital expenditures (Rs 52.54 crore), marked to market losses on account of foreign exchange contracts (Rs 147.81 crore) and repayment of loans (Rs 103.86 crore).
It also includes - deposits and margin money for bank guarantees and other non operative expenses, it added.
For the quarter ended December 2008, Satyam reported a consolidated net profit of Rs 160.50 crore and the total income stood at Rs 2,327.21 crore.
MUMBAI: Scam-hit Satyam Computer on Tuesday said that it has spent over Rs 1,000 crore on paying salaries to its employees in the first three months of this year.
According to the cash outlays information of the company for the first three months of this year, Satyam spent a total of Rs 1,026 crore on paying salaries and another Rs 342.72 crore in other employee-related segments.
The company made a cash outlay of Rs 91.17 crore on medical insurance for employees and Rs 251.55 crore on statutory compliance, the company said in the filing to the stock exchanges.
Overall, the company's total operating cash outlays stood at Rs 1,836 crore at the end of March this year.
The other expenditures of the company include - sub contractors, rent and utilities, travel and forex and other operating expenses.
At the end of March this year, the company's total headcount stood at 41,622, while its key subsidiaries, including Satyam BPO, had an employee strength of 3,828 associates.
Further, the non-operating cash outlays by the company in the three months period include - capital expenditures (Rs 52.54 crore), marked to market losses on account of foreign exchange contracts (Rs 147.81 crore) and repayment of loans (Rs 103.86 crore).
It also includes - deposits and margin money for bank guarantees and other non operative expenses, it added.
For the quarter ended December 2008, Satyam reported a consolidated net profit of Rs 160.50 crore and the total income stood at Rs 2,327.21 crore.
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