22 May 2009 PTI
NEW DELHI: Concerned over rising cost hitting the revenue, Satyam Computer on Friday said it is looking at cutting down costs.
"The customer front is good, stable. But costs are high... the revenues would be less," company Chairman Kiran Karnik told reporters after a meeting with the board members and officials of Tech Mahindra, which is taking over Satyam Computer.
The company today discussed a host of cost-cutting measures that can be explored.
Tech Mahindra Chief Executive Vineet Nayyar said Satyam had 10,000 excess employees in its 40,000-strong headcount.
"The company has 10,000 excess staff. We are looking at least painful ways to take care of this," Nayyar said.
On the other hand, Karnik said the company is not looking at layoffs, it is exploring sabbatical and virtual bench strategy.
Karnik said today's meeting discussed the challenges to the bottomline, how to handle (excess) people, HR and real estate among others.
Satyam witnessed a flurry of client loss following its disgraced founder Ramalinga Raju's admission to multi-crore rupees accounting fraud in January.
Today Satyam shares surged by 11.54 per cent on the BSE.
Last month, Tech Mahindra had acquired 51 per cent in the Hyderabad-listed Satyam through an auction for Rs 2,099 crore.
Karnik said the new auditors Deloitte and KPMG made presentation today at the meeting and said it would take minimum six months for restatement of company's accounts.
On the protracted legal battle with UK-based mobile solution firm Upaid, Nayyar said an out-of-court settlement is favourable and the company would explore that option.
Meanwhile, in a filing to the Bombay Stock Exchange, Satyam said four nominee directors of Tech Mahindra, including its Chief Executive Vineet Nayyar, have been today appointed on the board of the company, with effect from June 1.
The other three nominee directors on behalf of Venturbay Consultants (an arm of Tech Mahindra), include C P Gurnani, Sanjay Kalra and Ulhas N Yargop, Satyam said.
Gurnani currently heads Tech Mahindra's global operations, Kalra is President Strategic Initiatives while Yargop is President for IT sector and a member of the Group Management Board of Mahindra & Mahindra.
"Following the effectiveness of the appointment of Venbturbay Directors, there will be a total of 10 directors on the board," Satyam said.
In January the government had appointed Kiran Karnik, Deepak Parekh, C Achuthan, Tarun Das, T N Manoharan and S Balakrishna Mainak on the board of Satyam Computer after its founder Ramalinga Raju disclosed of a multi-crore financial fraud in the company's books of accounts.
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Showing posts with label Music Live Streams. Show all posts
Sunday, May 24, 2009
Monday, April 20, 2009
Top 500 US firms' profits plunge 85% in 2008
20 Apr 2009
WASHINGTON: The top 500 US corporations saw their profits plunge 85 per cent in Top US firms' profits plunge 85% in 2008
2008, their worst showing in more than half a century, Fortune magazine reported on Sunday.
"The sumptuous profits America posted over the past few years weren't part of a new world order, but a bubble that, like the others, went out with a bang. And what a bang," the magazine reported in its latest issue.
"Last year was the worst economic performance in the 55-year history of the Fortune 500 list of America's biggest 500 companies," Fortune said.
"Earnings dropped 84.7 per cent from the previous year, from 645 billion dollars to 98.9 billion dollars, marking the largest one-year decline ever," it said.
"For every dollar in profits the 500 garnered in 2006, its members made 13 cents in 2008."
"The economy's fall was precipitous, leaving companies little time to adjust and pushing the 500 from the summit to something resembling an earnings depression," it said.
Unsurprisingly, the financial and automotive sectors were the worst hit, with the former reporting 214.3 billion dollars in losses, 99.3 billion of which came from one company - battered insurance group AIG.
In Fortune's latest annual listing of the top 500 US companies, energy and oil firms held three of the top four positions, led by ExxonMobil which snagged top spot from retail giant Wal-Mart. The retailer dropped to number two.
Chevron came in third followed by ConocoPhilipps and General Electric.
Automaker General Motors was sixth, despite being on the verge of bankruptcy, followed by Ford in seventh place.
AIG suffered the biggest drop in the standings, falling from 13th to 245th place.
Engineering firm URS was the biggest gainer, from 449th place last year to 264.
WASHINGTON: The top 500 US corporations saw their profits plunge 85 per cent in Top US firms' profits plunge 85% in 2008
2008, their worst showing in more than half a century, Fortune magazine reported on Sunday.
"The sumptuous profits America posted over the past few years weren't part of a new world order, but a bubble that, like the others, went out with a bang. And what a bang," the magazine reported in its latest issue.
"Last year was the worst economic performance in the 55-year history of the Fortune 500 list of America's biggest 500 companies," Fortune said.
"Earnings dropped 84.7 per cent from the previous year, from 645 billion dollars to 98.9 billion dollars, marking the largest one-year decline ever," it said.
"For every dollar in profits the 500 garnered in 2006, its members made 13 cents in 2008."
"The economy's fall was precipitous, leaving companies little time to adjust and pushing the 500 from the summit to something resembling an earnings depression," it said.
Unsurprisingly, the financial and automotive sectors were the worst hit, with the former reporting 214.3 billion dollars in losses, 99.3 billion of which came from one company - battered insurance group AIG.
In Fortune's latest annual listing of the top 500 US companies, energy and oil firms held three of the top four positions, led by ExxonMobil which snagged top spot from retail giant Wal-Mart. The retailer dropped to number two.
Chevron came in third followed by ConocoPhilipps and General Electric.
Automaker General Motors was sixth, despite being on the verge of bankruptcy, followed by Ford in seventh place.
AIG suffered the biggest drop in the standings, falling from 13th to 245th place.
Engineering firm URS was the biggest gainer, from 449th place last year to 264.
Friday, April 10, 2009
Satyam fiasco: LIC lost Rs 950 crore
10 Apr 2009,
HYDERABAD: If one were to put aside the magnitude of loss suffered by the investors in Satyam, the money with which the Raju brothers played in Satyam scam was to the tune of Rs 6,000 crore. Of this, the amount they cornered for themseleves and their family was Rs 2,580 crore. The whereabouts of this money and the properties they bought with it and the key persons that helped them in perpetrating this scam is yet to be known. This is the crux of the charge sheet filed by the CBI two days ago in the local CBI court in which nine persons including B Ramalinga Raju, B Rama Raju and B Suryanarayana Raju are the accused.
Interestingly, Life Insurance Corporation (LIC) has emerged as the single largest institutional investor which lost as much as Rs 950 crore. Others like Allahabad Bank, Union Bank of India, Punjab National Bank, Oriental Bank of Commerce, Corporation Bank etc have together lost only Rs 10 crore put together.
The core of the chargesheet, running into 75 pages, mentioned what the CBI understood so far about the scam. Some highlights: When the actual cash available with the company was only Rs 139 crore, the accused had shown an inflated figure of Rs 5,160 crore and also claimed an interest of Rs 375 crore on that while the actual interest accrued was only Rs 7 lakh. On this, the accused had claimed that they had paid a tax of Rs 30 crore whereas the tax that was deducted on this income was only Rs 1.5 lakh.
Amazingly the number of fake invoices they generated was 7,561 and Rs 5,117 crore in value. Sales of the company was also inflated by 18% from Rs 23,434 crore to Rs 27,691 crore and the figure under the debtors account was shown as Rs 481 crore.
The chargesheet said that the Raju brothers had first sold their shares for Rs 75 crore, which they gave as gifts to their wives and family members. Later, in 2002, they sold the Satyam shares held by their family members, earning Rs 707 crore and purchased several properties with that money. They cornered another Rs 115 crore as dividend.
Between 2006 and 2008, Raju brothers had mortgaged their shares and got Rs 1,744 crore as loans from several non banking financial institutions. The shares held by the Raju family in Satyam fell from 18 per cent in 1992 to 1.87 per cent by 2008 but was not noticed by anybody. The 327 frontal companies floated by Raju brothers as agro based companies did nothing related to agri industries but were busy rotating the money they swindled for purchasing real estate. Even the bench strength of the company is only 62 per cent and they inflated this to 75 per cent and though the growth of the company is only three per cent, the accused have shown 22 per cent as operating margin. They also suppressed a liability of Rs 1,230 crore they have to pay to various institutions.
The CBI also found fault with the auditors and held them as chief accomplices responsible for the largescale fraud. For nearly seven to eight years, these auditors were certifying all the fake FDRs and ignored their prime responsibility of verifying the realities, it said.
HYDERABAD: If one were to put aside the magnitude of loss suffered by the investors in Satyam, the money with which the Raju brothers played in Satyam scam was to the tune of Rs 6,000 crore. Of this, the amount they cornered for themseleves and their family was Rs 2,580 crore. The whereabouts of this money and the properties they bought with it and the key persons that helped them in perpetrating this scam is yet to be known. This is the crux of the charge sheet filed by the CBI two days ago in the local CBI court in which nine persons including B Ramalinga Raju, B Rama Raju and B Suryanarayana Raju are the accused.
Interestingly, Life Insurance Corporation (LIC) has emerged as the single largest institutional investor which lost as much as Rs 950 crore. Others like Allahabad Bank, Union Bank of India, Punjab National Bank, Oriental Bank of Commerce, Corporation Bank etc have together lost only Rs 10 crore put together.
The core of the chargesheet, running into 75 pages, mentioned what the CBI understood so far about the scam. Some highlights: When the actual cash available with the company was only Rs 139 crore, the accused had shown an inflated figure of Rs 5,160 crore and also claimed an interest of Rs 375 crore on that while the actual interest accrued was only Rs 7 lakh. On this, the accused had claimed that they had paid a tax of Rs 30 crore whereas the tax that was deducted on this income was only Rs 1.5 lakh.
Amazingly the number of fake invoices they generated was 7,561 and Rs 5,117 crore in value. Sales of the company was also inflated by 18% from Rs 23,434 crore to Rs 27,691 crore and the figure under the debtors account was shown as Rs 481 crore.
The chargesheet said that the Raju brothers had first sold their shares for Rs 75 crore, which they gave as gifts to their wives and family members. Later, in 2002, they sold the Satyam shares held by their family members, earning Rs 707 crore and purchased several properties with that money. They cornered another Rs 115 crore as dividend.
Between 2006 and 2008, Raju brothers had mortgaged their shares and got Rs 1,744 crore as loans from several non banking financial institutions. The shares held by the Raju family in Satyam fell from 18 per cent in 1992 to 1.87 per cent by 2008 but was not noticed by anybody. The 327 frontal companies floated by Raju brothers as agro based companies did nothing related to agri industries but were busy rotating the money they swindled for purchasing real estate. Even the bench strength of the company is only 62 per cent and they inflated this to 75 per cent and though the growth of the company is only three per cent, the accused have shown 22 per cent as operating margin. They also suppressed a liability of Rs 1,230 crore they have to pay to various institutions.
The CBI also found fault with the auditors and held them as chief accomplices responsible for the largescale fraud. For nearly seven to eight years, these auditors were certifying all the fake FDRs and ignored their prime responsibility of verifying the realities, it said.
K Ramalingam named Chairman of Maytas Infra board
9 Apr 2009 ET Bureau
HYDERABAD: K Ramalingam, former Chairman of the Airports Authority of India (AAI), and Maytas Infra’s newly inducted board member, has been named Chairman of the board.
Ramalingam and Anil K Agarwal, past president of Assocham were appointed in the first week of April as additional directors on board by the Company Law Board.
The government had last month appointed noted tax lawyer O P Vaish and past president of Institute of Chartered Accountants of India Ved Jain on the board of Maytas Infra following an order by the Company Law Board in this regard.
Maytas Infra is promoted by B Teja Raju, son of B Ramalinga Raju disgraced founder of Satyam Computers. The firm was starved of funds after Ramalinga Raju confessed to perpetrating a Rs, 7,000 crore financial fraud at Satyam.
The government wanted to supersede the Maytas board, but this was turned down by the Company Law Board. The CLB instead issued a directive to the government to appoint four nominee directors.
Maytas Infra is now undergoing a corporate debt restructuring (CDR) exercise. CDR is done to re-organise the outstanding obligations to financial institutions.
Banks have an exposure of around Rs 5000 crore in the firm.
It has an order book of about Rs 8,000 crore, apart from the prestigious Rs 12,000 crore Metro Rail Project, which is in a limbo.
HYDERABAD: K Ramalingam, former Chairman of the Airports Authority of India (AAI), and Maytas Infra’s newly inducted board member, has been named Chairman of the board.
Ramalingam and Anil K Agarwal, past president of Assocham were appointed in the first week of April as additional directors on board by the Company Law Board.
The government had last month appointed noted tax lawyer O P Vaish and past president of Institute of Chartered Accountants of India Ved Jain on the board of Maytas Infra following an order by the Company Law Board in this regard.
Maytas Infra is promoted by B Teja Raju, son of B Ramalinga Raju disgraced founder of Satyam Computers. The firm was starved of funds after Ramalinga Raju confessed to perpetrating a Rs, 7,000 crore financial fraud at Satyam.
The government wanted to supersede the Maytas board, but this was turned down by the Company Law Board. The CLB instead issued a directive to the government to appoint four nominee directors.
Maytas Infra is now undergoing a corporate debt restructuring (CDR) exercise. CDR is done to re-organise the outstanding obligations to financial institutions.
Banks have an exposure of around Rs 5000 crore in the firm.
It has an order book of about Rs 8,000 crore, apart from the prestigious Rs 12,000 crore Metro Rail Project, which is in a limbo.
Sunday, April 5, 2009
India Satyam may announce buyer on April 13
MUMBAI, April 5 (Reuters) - India's Satyam Computer Services Ltd (SATY.BO) could announce the buyer of the fraud-hit sofware company on April 13, the deadline for submitting financial bids, the Business Standard newspaper said on Sunday.
"The submission of bids will happen on April 13. The bids will be opened that day itself and we might be able to announce the winning bid as well," Satyam's chairman, Kiran Karnik, said.
"It is technically possible to manage all this in one day as a lot will depend on how many bids actually come in," he told the paper.
On Saturday, Satyam extended the deadline for submitting financial bids to April 13 from April 9 as bidders sought more data.
The outsourcer, reeling since its founder and chairman quit this year after unveiling an accounting fraud, is trying to find a buyer to take a 51 percent stake through a bidding process.
On Thursday, Satyam said it had tweaked the bidding process to introduce a second-round open auction to find a new owner if necessary.
Under the process, if there were bids that were at least 90 percent of the highest offer, then there would be an open auction among those bidders, with the highest bid set as the floor price. [nBOM394892].
Indian engineering conglomerate Larsen & Toubro (LART.BO) and mid-sized outsourcer Tech Mahindra (TEML.BO) are among the suitors, with local media reporting U.S. private equity investor W L Ross & Co was also in the rac
"The submission of bids will happen on April 13. The bids will be opened that day itself and we might be able to announce the winning bid as well," Satyam's chairman, Kiran Karnik, said.
"It is technically possible to manage all this in one day as a lot will depend on how many bids actually come in," he told the paper.
On Saturday, Satyam extended the deadline for submitting financial bids to April 13 from April 9 as bidders sought more data.
The outsourcer, reeling since its founder and chairman quit this year after unveiling an accounting fraud, is trying to find a buyer to take a 51 percent stake through a bidding process.
On Thursday, Satyam said it had tweaked the bidding process to introduce a second-round open auction to find a new owner if necessary.
Under the process, if there were bids that were at least 90 percent of the highest offer, then there would be an open auction among those bidders, with the highest bid set as the floor price. [nBOM394892].
Indian engineering conglomerate Larsen & Toubro (LART.BO) and mid-sized outsourcer Tech Mahindra (TEML.BO) are among the suitors, with local media reporting U.S. private equity investor W L Ross & Co was also in the rac
Monday, March 16, 2009
Satyam bidder will have to stay put in SPV for 3 years
16 Mar 2009, ET Bureau
HYDERABAD: The government-appointed board of Satyam Computer Services has attempted to ensure that an investor or a group that gains controlling stake in the IT firm will have the responsibilities of steering the firm out of the current crisis and stabilising its operations.
The ground rules for suitors, laid down by the board, make it clear that a bidder, who floats a special purpose vehicle (SPV) to buy into Satyam, cannot sell his stake in the entity (SPV) for three years. The extra caution has been taken to ensure that if an SPV acquires Satyam, it does not jump the ship mid-way.
The new owner, in any case, cannot sell shares of Satyam that he acquires through a preferential allotment for three years. The board has fixed a minimum lock in of three years to keep frivolous bidders away.
In addition to this stipulation, the board has also said there cannot be any change in the controlling interest in an SPV for three years from the date of the preferential allotment, if the bidder uses this route. A change, if any, in the shareholding pattern of the SPV, would require prior approval of the capital market regulator Sebi and the Company Law Board (CLB), said sources privy to the development.
An SPV is a separate legal entity created to handle a venture on behalf of a parent company, and has a structure that makes its obligations secure even if the parent goes bankrupt.
Bidders, that need to raise money to acquire Satyam, are likely to float SPVs. There could be different permutations and combinations, including tie-ups with private equity firms, for SPV. A clutch of private equity firms, including Texas Pacific Group and Kohlberg Kravis and Roberts (KKR), are in the race for Satyam, besides IBM and domestic firms L&T, Tech Mahindra and BK Modi-promoted Spice Group.
Satyam needs a capital infusion of Rs 1,000 crore, of which around Rs 700 crore will be used to repay loans. The bidder will have to show proof of availability of Rs 1,500 crore ($190 million) while submitting the detailed expression of interest (EOI). Bidders will have to submit their detailed EOI by March 20, and those shortlisted will then be given access to information on Satyam.
The board has, however, said it cannot, with certainty or accuracy, re-state Satyam’s accounts. But lack of clarity on the financials and legal liabilities of Satyam may make it tough for bidders to put a price tag on the firm.
The IT firm is struggling for survival after its defamed founder B Ramalinga Raju admitted to perpetrating a Rs 7,000-crore financial fraud. A successful bidder will have to deposit funds needed to buy the company ahead of the preferential allotment of shares in the troubled company, and could find its bid disqualified if it fails to put in place the required funds, people familiar with the matter said.
As reported by ET on Sunday last, qualified bidders will have to furnish a Rs 100-crore guarantee while putting in their final financial bids and suitors will not be allowed to change the bid p
HYDERABAD: The government-appointed board of Satyam Computer Services has attempted to ensure that an investor or a group that gains controlling stake in the IT firm will have the responsibilities of steering the firm out of the current crisis and stabilising its operations.
The ground rules for suitors, laid down by the board, make it clear that a bidder, who floats a special purpose vehicle (SPV) to buy into Satyam, cannot sell his stake in the entity (SPV) for three years. The extra caution has been taken to ensure that if an SPV acquires Satyam, it does not jump the ship mid-way.
The new owner, in any case, cannot sell shares of Satyam that he acquires through a preferential allotment for three years. The board has fixed a minimum lock in of three years to keep frivolous bidders away.
In addition to this stipulation, the board has also said there cannot be any change in the controlling interest in an SPV for three years from the date of the preferential allotment, if the bidder uses this route. A change, if any, in the shareholding pattern of the SPV, would require prior approval of the capital market regulator Sebi and the Company Law Board (CLB), said sources privy to the development.
An SPV is a separate legal entity created to handle a venture on behalf of a parent company, and has a structure that makes its obligations secure even if the parent goes bankrupt.
Bidders, that need to raise money to acquire Satyam, are likely to float SPVs. There could be different permutations and combinations, including tie-ups with private equity firms, for SPV. A clutch of private equity firms, including Texas Pacific Group and Kohlberg Kravis and Roberts (KKR), are in the race for Satyam, besides IBM and domestic firms L&T, Tech Mahindra and BK Modi-promoted Spice Group.
Satyam needs a capital infusion of Rs 1,000 crore, of which around Rs 700 crore will be used to repay loans. The bidder will have to show proof of availability of Rs 1,500 crore ($190 million) while submitting the detailed expression of interest (EOI). Bidders will have to submit their detailed EOI by March 20, and those shortlisted will then be given access to information on Satyam.
The board has, however, said it cannot, with certainty or accuracy, re-state Satyam’s accounts. But lack of clarity on the financials and legal liabilities of Satyam may make it tough for bidders to put a price tag on the firm.
The IT firm is struggling for survival after its defamed founder B Ramalinga Raju admitted to perpetrating a Rs 7,000-crore financial fraud. A successful bidder will have to deposit funds needed to buy the company ahead of the preferential allotment of shares in the troubled company, and could find its bid disqualified if it fails to put in place the required funds, people familiar with the matter said.
As reported by ET on Sunday last, qualified bidders will have to furnish a Rs 100-crore guarantee while putting in their final financial bids and suitors will not be allowed to change the bid p
Tuesday, February 24, 2009
Maytas Infra diverted public money to group entities: Government
23 Feb 2009, PTI
NEW DELHI: The government has alleged that Maytas Infra has diverted money raised from public to the group companies owned by kin of disgraced The Great Fall of Satyam founder Chairman of scam-ridden Satyam B Ramalinga Raju.
"Substantial funds (raised through IPO by Maytas Infra) received in company's books of accounts have been diverted to group companies, associate concerns and subsidiaries. Most of the investments made are in the nature of interest-free loans and advances against the share application money," said the government in its petition before the Company Law Board (CLB).
The government's petition seeking dismissal of the existing board of Maytas Infra will come up for hearing on February 26.
The company had earlier raised Rs 327.45 crore through a public issue and charged a premium of Rs 360 on shares of face value of Rs 10 each.
The government also said that B Rama Raju, son of Ramalinga Raju, had admitted before the authorities that he had prior knowledge of the sale of Maytas Infra to Satyam, a deal which was aborted following pressure from Satyam shareholders.
The government further said in its petition that the "corporate veil" of the company should be lifted to see who are the persons in control of the affairs of Maytas Infra. "It will throw light on the present state of mismanagement, gross negligence and persistent financial irregularities into the running affairs of the company."
NEW DELHI: The government has alleged that Maytas Infra has diverted money raised from public to the group companies owned by kin of disgraced The Great Fall of Satyam founder Chairman of scam-ridden Satyam B Ramalinga Raju.
"Substantial funds (raised through IPO by Maytas Infra) received in company's books of accounts have been diverted to group companies, associate concerns and subsidiaries. Most of the investments made are in the nature of interest-free loans and advances against the share application money," said the government in its petition before the Company Law Board (CLB).
The government's petition seeking dismissal of the existing board of Maytas Infra will come up for hearing on February 26.
The company had earlier raised Rs 327.45 crore through a public issue and charged a premium of Rs 360 on shares of face value of Rs 10 each.
The government also said that B Rama Raju, son of Ramalinga Raju, had admitted before the authorities that he had prior knowledge of the sale of Maytas Infra to Satyam, a deal which was aborted following pressure from Satyam shareholders.
The government further said in its petition that the "corporate veil" of the company should be lifted to see who are the persons in control of the affairs of Maytas Infra. "It will throw light on the present state of mismanagement, gross negligence and persistent financial irregularities into the running affairs of the company."
Monday, February 23, 2009
Why the hurry to marry Satyam off?
SEBI and the Company Law Board have shown great alacrity in the last few days, rewriting rules and granting exemptions from legal requirements to help Satyam find a new owner. Yet, with the restatement of the balance sheet still on, how will bidders and the new Board assess the worth of the company, asks RAGHUVIR SRINIVASAN.
The government appointed Board of Directors of Satyam Computer Services has made all the right moves in the last one month in its effort to first save the company from collapse, and then, get it back on its feet. Operating in an adverse atmosphere rife with rumours of customers walking away and imminent collapse of the company, the new Board has done remarkably well to bring Satyam to a stage where it can now hope to sell the company in one piece to a responsible buyer for a good price.
Yet the Board now faces its biggest, and most crucial, test in finalising a strategic buyer for the stricken company.
Even as the drama unfolds, the question that begs an answer is: Is it time to hand over the company to a strategic buyer?
The answer is: no. Satyam now is akin to a seriously ill patient who’s just been moved out of ICU into the nursing ward. How can one consider the patient’s marriage when she’s still in a delicate stage of convalescence?
Indeed, it is curious that at least four different buyers are in the race for Satyam even before its correct balance-sheet is drawn up. The restatement of its accounts is still on and it could be a few more weeks before the true financial picture is revealed.
Given this, how will the prospective buyers assess Satyam’s worth? What will the new Board base its asking price on? Surely not the current market price, because it is as misleading as the price based on SEBI’s open offer formula (average of the last six months’ market price).
Stabilising slowly
The market regulator, SEBI, and the Company Law Board have shown great alacrity in the last few days, rewriting rules and granting exemptions from legal requirements to help Satyam find a new owner. Why this seemingly unholy hurry among all concerned to marry Satyam off?
The company is gradually stabilising and this is the time for the Board to fully back the new CEO at the helm. Waiting for the operations to get back to normal and the balance sheet to be restated before inviting suitors does not appear to be a bad strategy at this point in time. Unless, of course, if it is feared that the restated balance sheet will reveal an ugly picture of Satyam’s real financial state.
Current indicators do not appear to point that way. Satyam’s business appears largely unhurt, even if a couple of its customers may have moved out.
It has actually bagged work-extensions and new orders worth $250 million in the period since the scandal became public.
The company has been able to meet its commitments to employees and vendors in the troubled period of the last month and has also been successful in securing bank funding of Rs 600 crore.
As the new Board has stated ad nauseam, the company has unencumbered assets in land and buildings and its employee count is what was stated at the time of its last financial results announcement in October, give or take a few due to natural attrition.
Yes, Satyam is certainly considerably lighter on cash assets as revealed in its last results but that does not make it a basket case that has to be sold off in a hurry.
Indeed, the considerable interest shown by the four suitors — L&T, B. K. Modi, Hinduja Group and Tech Mahindra — confirms that the value in Satyam, despite the plunder by Mr Ramalinga Raju, remains intact.
The prospective buyers seem to have either correctly assessed this or — as the L&T CEO Mr A. M. Naik said and got into trouble with SEBI for it — are privy to information not available in the public domain about Satyam’s correct financial position.
The urgency shown by at least two of them to bag the prize probably gives the game away. They seem to want to push through a deal at the lowest possible price, which is feasible only it is finalised now. And those concerned, the government, SEBI, CLB and indeed, even the new Board, seem to be wittingly or unwittingly helping the cause.
True value
In all this din, the public shareholder seems to have been forgotten. Consider the plight of shareholders who bought the Satyam stock even four months back when it was ruling at over Rs 300.
A deal with a strategic buyer, in the prevailing circumstances, may fetch them only a fraction of the price that they paid. Of course, equity investment is risky but will the price that they now get reflect the inherent, true value of Satyam?
There is thus, considerable responsibility riding on the shoulders of Satyam’s government-appointed Board.
On it devolves the onerous task of striking a balance between ensuring that Satyam gets a strong buyer who can take the company forward, and getting the best possible price from him for the existing minority shareholders.
Will Deepak Parekh and Co. succumb to the pressures from the prospective suitors and marry Satyam off in a hurry or will they wait and choose the best groom who can give her a good life? As in any arranged marriage, the elders — government and CLB — may well hold the answer.
Raghuvir Srinivasan B.L
The government appointed Board of Directors of Satyam Computer Services has made all the right moves in the last one month in its effort to first save the company from collapse, and then, get it back on its feet. Operating in an adverse atmosphere rife with rumours of customers walking away and imminent collapse of the company, the new Board has done remarkably well to bring Satyam to a stage where it can now hope to sell the company in one piece to a responsible buyer for a good price.
Yet the Board now faces its biggest, and most crucial, test in finalising a strategic buyer for the stricken company.
Even as the drama unfolds, the question that begs an answer is: Is it time to hand over the company to a strategic buyer?
The answer is: no. Satyam now is akin to a seriously ill patient who’s just been moved out of ICU into the nursing ward. How can one consider the patient’s marriage when she’s still in a delicate stage of convalescence?
Indeed, it is curious that at least four different buyers are in the race for Satyam even before its correct balance-sheet is drawn up. The restatement of its accounts is still on and it could be a few more weeks before the true financial picture is revealed.
Given this, how will the prospective buyers assess Satyam’s worth? What will the new Board base its asking price on? Surely not the current market price, because it is as misleading as the price based on SEBI’s open offer formula (average of the last six months’ market price).
Stabilising slowly
The market regulator, SEBI, and the Company Law Board have shown great alacrity in the last few days, rewriting rules and granting exemptions from legal requirements to help Satyam find a new owner. Why this seemingly unholy hurry among all concerned to marry Satyam off?
The company is gradually stabilising and this is the time for the Board to fully back the new CEO at the helm. Waiting for the operations to get back to normal and the balance sheet to be restated before inviting suitors does not appear to be a bad strategy at this point in time. Unless, of course, if it is feared that the restated balance sheet will reveal an ugly picture of Satyam’s real financial state.
Current indicators do not appear to point that way. Satyam’s business appears largely unhurt, even if a couple of its customers may have moved out.
It has actually bagged work-extensions and new orders worth $250 million in the period since the scandal became public.
The company has been able to meet its commitments to employees and vendors in the troubled period of the last month and has also been successful in securing bank funding of Rs 600 crore.
As the new Board has stated ad nauseam, the company has unencumbered assets in land and buildings and its employee count is what was stated at the time of its last financial results announcement in October, give or take a few due to natural attrition.
Yes, Satyam is certainly considerably lighter on cash assets as revealed in its last results but that does not make it a basket case that has to be sold off in a hurry.
Indeed, the considerable interest shown by the four suitors — L&T, B. K. Modi, Hinduja Group and Tech Mahindra — confirms that the value in Satyam, despite the plunder by Mr Ramalinga Raju, remains intact.
The prospective buyers seem to have either correctly assessed this or — as the L&T CEO Mr A. M. Naik said and got into trouble with SEBI for it — are privy to information not available in the public domain about Satyam’s correct financial position.
The urgency shown by at least two of them to bag the prize probably gives the game away. They seem to want to push through a deal at the lowest possible price, which is feasible only it is finalised now. And those concerned, the government, SEBI, CLB and indeed, even the new Board, seem to be wittingly or unwittingly helping the cause.
True value
In all this din, the public shareholder seems to have been forgotten. Consider the plight of shareholders who bought the Satyam stock even four months back when it was ruling at over Rs 300.
A deal with a strategic buyer, in the prevailing circumstances, may fetch them only a fraction of the price that they paid. Of course, equity investment is risky but will the price that they now get reflect the inherent, true value of Satyam?
There is thus, considerable responsibility riding on the shoulders of Satyam’s government-appointed Board.
On it devolves the onerous task of striking a balance between ensuring that Satyam gets a strong buyer who can take the company forward, and getting the best possible price from him for the existing minority shareholders.
Will Deepak Parekh and Co. succumb to the pressures from the prospective suitors and marry Satyam off in a hurry or will they wait and choose the best groom who can give her a good life? As in any arranged marriage, the elders — government and CLB — may well hold the answer.
Raghuvir Srinivasan B.L
Wednesday, February 18, 2009
Lobbying begins for Maytas Infra board seats
19 Feb 2009,
HYDERABAD: Hectic lobbying for board seats in Maytas Infra has begun, a day after the government decided to move the Company Law Board (CLB) to oust the current board of Maytas Infra. IFCI, which holds 17% stake in Maytas Infra, on Wednesday pitched for a seat on the new board of Maytas Infra, whenever it is reconstituted. “The existing management faces a crisis of confidence, and we are keen on getting a representation in a non-partisan board not aligned with any interest,” said a senior IFCI official.
IFCI, along with IL&FS and Maharashtra government-run Sicom, hold close to a majority stake in the firm. The three financial institutions came to own the stake of the promoters, who pledged their shares and were unable to meet margin calls.
Last month, IL&FS too had sought a representation on the board citing concerns over the orderly running of Maytas Infra, a firm linked to the disgraced promoter of Satyam Computer Services B Ramalinga Raju. The proposal was backed by banks that have a huge exposure in Maytas Infra. But these institutional lenders will not be able to off-load their stakes till stability is restored in the company, said sources.
Maytas Infra is strapped of funds after Icra downgraded the ratings it had assigned to the debt programmes and bank facilities of the firm. Lenders are desperately looking at ways to protect their exposure to the company. A consortium of banks are on course to set up a supervisory committee to oversee the functioning of Maytas Infra, said a senior banker.
A consortium of 19 banks, which includes two of the country’s largest banks — State Bank of India and ICICI Bank — have lent over Rs 5,000 crore to the company. A senior official from a large bank said their primary focus was to ensure that the clients of Maytas do not cancel contracts midway. Secondly, they also want to ensure that Maytas Infra completes the projects on hand within the stipulated time.
Bankers to Maytas Infra are also considering the appointment of an independent auditor to re-assess the company’s balance sheet. “Maytas Infra does not have much of assets and liabilities on its books. They have spun off different special purpose vehicles (SPVs) for different projects.
There are over 50 SPVs, as they have won at least 62 contracts in various sectors. If we have to get back our money, we have to see to it the clients do not walk out of Maytas mid-way, and the existing contracts are completed. For this, we need a committee to oversee the operations of SPV,” said a senior banker in the consortium.
Last week, the Bombay High Court had dismissed a joint ICICI Bank-IDBI Bank appeal seeking an injunction on the various parties dealing with Maytas Infra. Bankers wanted a status quo, apprehending that clients of Maytas may terminate their contracts and guarantees given by banks would be invoked.
ET Bureau
HYDERABAD: Hectic lobbying for board seats in Maytas Infra has begun, a day after the government decided to move the Company Law Board (CLB) to oust the current board of Maytas Infra. IFCI, which holds 17% stake in Maytas Infra, on Wednesday pitched for a seat on the new board of Maytas Infra, whenever it is reconstituted. “The existing management faces a crisis of confidence, and we are keen on getting a representation in a non-partisan board not aligned with any interest,” said a senior IFCI official.
IFCI, along with IL&FS and Maharashtra government-run Sicom, hold close to a majority stake in the firm. The three financial institutions came to own the stake of the promoters, who pledged their shares and were unable to meet margin calls.
Last month, IL&FS too had sought a representation on the board citing concerns over the orderly running of Maytas Infra, a firm linked to the disgraced promoter of Satyam Computer Services B Ramalinga Raju. The proposal was backed by banks that have a huge exposure in Maytas Infra. But these institutional lenders will not be able to off-load their stakes till stability is restored in the company, said sources.
Maytas Infra is strapped of funds after Icra downgraded the ratings it had assigned to the debt programmes and bank facilities of the firm. Lenders are desperately looking at ways to protect their exposure to the company. A consortium of banks are on course to set up a supervisory committee to oversee the functioning of Maytas Infra, said a senior banker.
A consortium of 19 banks, which includes two of the country’s largest banks — State Bank of India and ICICI Bank — have lent over Rs 5,000 crore to the company. A senior official from a large bank said their primary focus was to ensure that the clients of Maytas do not cancel contracts midway. Secondly, they also want to ensure that Maytas Infra completes the projects on hand within the stipulated time.
Bankers to Maytas Infra are also considering the appointment of an independent auditor to re-assess the company’s balance sheet. “Maytas Infra does not have much of assets and liabilities on its books. They have spun off different special purpose vehicles (SPVs) for different projects.
There are over 50 SPVs, as they have won at least 62 contracts in various sectors. If we have to get back our money, we have to see to it the clients do not walk out of Maytas mid-way, and the existing contracts are completed. For this, we need a committee to oversee the operations of SPV,” said a senior banker in the consortium.
Last week, the Bombay High Court had dismissed a joint ICICI Bank-IDBI Bank appeal seeking an injunction on the various parties dealing with Maytas Infra. Bankers wanted a status quo, apprehending that clients of Maytas may terminate their contracts and guarantees given by banks would be invoked.
ET Bureau
Maytas Infra contests Centre’s move
HYDERABAD: Maytas Infra has decided to contest the move of the Union Government to supersede its board of directors and filed a caveat in the Company Law Board (CLB) seeking copies of the petition filed by the Centre on Wednesday.
The company, which is headed by B. Teja Raju, elder son of former chairman of Satyam Computer Services B. Ramalinga Raju ran into trouble after Satyam announced its proposal to acquire 51 per cent controlling stake in Maytas Infra on December 16, 2008.
A statement by the company said that the Ministry of Corporate Affairs (MCA) had approached the CLB and filed a petition on Tuesday seeking change in the board of directors of Maytas Infra.
The company, in turn, filed a caveat before the CLB, according to which the MCA would have to serve a copy of the petition before it was heard.
The bench of the CLB directed the counsel for the Government to serve a copy of the petition on Maytas Infra and listed the matter for hearing on February 24.
Maytas Infra has not yet received any copy of such petition till date. However, the company has decided to contest the said petition.
Maytas Infra had increased its turnover from Rs. 151 crore in 2004-05 to Rs. 1,764 crore in 2007-08. Following the fraud cast on Satyam Computer surfaced, most of the directors on the board of Maytas Infra resigned. Its CEO P. K. Madhav stepped down following his arrest in the Nagarjuna Finance case last month.
Sources said that even Maytas Properties, a privately-held company promoted by Mr. Raju’s younger son, Rama Raju Jr., is planning to challenge the move of the Centre.
The company, which is headed by B. Teja Raju, elder son of former chairman of Satyam Computer Services B. Ramalinga Raju ran into trouble after Satyam announced its proposal to acquire 51 per cent controlling stake in Maytas Infra on December 16, 2008.
A statement by the company said that the Ministry of Corporate Affairs (MCA) had approached the CLB and filed a petition on Tuesday seeking change in the board of directors of Maytas Infra.
The company, in turn, filed a caveat before the CLB, according to which the MCA would have to serve a copy of the petition before it was heard.
The bench of the CLB directed the counsel for the Government to serve a copy of the petition on Maytas Infra and listed the matter for hearing on February 24.
Maytas Infra has not yet received any copy of such petition till date. However, the company has decided to contest the said petition.
Maytas Infra had increased its turnover from Rs. 151 crore in 2004-05 to Rs. 1,764 crore in 2007-08. Following the fraud cast on Satyam Computer surfaced, most of the directors on the board of Maytas Infra resigned. Its CEO P. K. Madhav stepped down following his arrest in the Nagarjuna Finance case last month.
Sources said that even Maytas Properties, a privately-held company promoted by Mr. Raju’s younger son, Rama Raju Jr., is planning to challenge the move of the Centre.
Satyam probe: CBI to team up with ministries, institutions
CBI took over the case one day before the Lok Sabha is to discuss the scam, which has shaken investors and raised questions over India’s corporate governance standards
New Delhi: The Central Bureau of Investigation (CBI) will assemble a “multi-dimensional” team to probe the Rs7,136 crore fraud at software maker Satyam Computer Services Ltd.
CBI, India’s premier investigating agency, took over the investigation of the country’s biggest accounting fraud on Wednesday.
Jigsaw puzzle: A file photo of Satyam founder B. Ramalinga Raju (right) seen through a car windscreen as state criminal investigation department takes him in custody in Hyderabad on 18 January. Mahesh Kumar A / AP“A joint consultative and coordinating mechanism is being worked out with concerned ministries, departments and institutions for providing necessary assistance to CBI,” a spokesperson for the agency said.
CBI took over the case one day before the Lok Sabha is to discuss the scam, which has shaken investors and raised questions over India’s corporate governance standards. Minister for corporate affairs P.C. Gupta is likely to reply to the discussion.
The investigating team that CBI is forming will be based in Hyderabad, home to Satyam, whose founder and former chairman B. Ramalinga Raju, brother and former managing director B. Rama Raju and former chief financial officer Srinivas Vadlamani are in a jail in the city after being arrested in connection with the swindle.
With the case being transferred to it from the crime investigation department of the Andhra Pradesh police, CBI can gain custody of Raju for up to nine days to question him over the scam. CBI officials who didn’t want to be named said records and other material associated with the Satyam probe were being taken over by the agency, which would register a case soon.
Raju was arrested after confessing on 7 January that he had been cooking the company’s books over several years by inflating revenue and profit and creating fictitious profits.
The Andhra Pradesh Police, the Serious Fraud Investigation Office, market regulator Securities and Exchange Board of India (Sebi) and the Institute of Chartered Accountants of India, the country’s main accounting body, and the Income-tax (I-T) department are involved in probing various aspects of the Satyam fraud.
A local court in Hyderabad on Wednesday allowed the I-T department to interrogate Raju on 21 February. Sebi officials questioned and recorded the statement of Raju and his brother for three days from 4 February in Hyderabad’s Chanchalguda jail.
Bail petitions filed by the Raju brothers and Vadlamani were dismissed by the court, which also allowed Sebi to question the former chief financial officer and former Price Waterhouse partners S. Gopalakrishan and Talluri Srinivas, also arrested in connection with the scam.
Satyam’s accounts are being examined by the audit firms Deloitte Touche Tohmatsu and KPMG, whose India chief operating officer Richard Rekhy said the restatement of accounts could take as long as six months. “It is not a one-year account, you have to go back three-four years...,” Rekhy said.
The Central government dissolved Satyam’s board and appointed directors led by Kiran Karnik, former president of the industry body National Association of Software and Service Companies, after the scandal broke. On Tuesday, the government decided to supersede the boards of Maytas Infra Ltd and Maytas Properties Ltd, firms promoted by members of the Raju family.
Maytas Infra shares rose Rs2.70, or 5%, to Rs56.70 on Wednesday as investors cheered the news. Maytas Infra said in a statement that it will contest the government’s move to remove the construction firm’s directors before the Company Law Board.
The Andhra Pradesh government said it will not act in haste against Maytas Infra. “The government will not cancel the projects awarded to Maytas just because the management is changing. The agreement has been signed with the company and it would be responsible for carrying the projects forward,” state finance minister K. Rosaiah said.
Among the main projects awarded to Maytas Infra and its joint venture partners is the Rs12,200-crore Hyderabad Metro Rail, for which financial closure is supposed to be achieved by March-end.
In a separate development, Union labour minister Oscar Fernandes said Satyam has 43,622 workers, citing the records of the government’s pension fund authority.
On Tuesday, corporate affairs minister Gupta told lawmakers that Satyam has 53,000 workers, adding that the government had no knowledge of bogus workers.
The Hyderabad-based company padded employee numbers to siphon off cash, a prosecutor alleged at a hearing last month.
Satyam employees earning more than Rs6,500 a month can opt not to join the government-run pension fund, according to the Employees’ Provident Fund Organization’s rules. Overseas employees of Satyam also aren’t required to join the pension plan.
New Delhi: The Central Bureau of Investigation (CBI) will assemble a “multi-dimensional” team to probe the Rs7,136 crore fraud at software maker Satyam Computer Services Ltd.
CBI, India’s premier investigating agency, took over the investigation of the country’s biggest accounting fraud on Wednesday.
Jigsaw puzzle: A file photo of Satyam founder B. Ramalinga Raju (right) seen through a car windscreen as state criminal investigation department takes him in custody in Hyderabad on 18 January. Mahesh Kumar A / AP“A joint consultative and coordinating mechanism is being worked out with concerned ministries, departments and institutions for providing necessary assistance to CBI,” a spokesperson for the agency said.
CBI took over the case one day before the Lok Sabha is to discuss the scam, which has shaken investors and raised questions over India’s corporate governance standards. Minister for corporate affairs P.C. Gupta is likely to reply to the discussion.
The investigating team that CBI is forming will be based in Hyderabad, home to Satyam, whose founder and former chairman B. Ramalinga Raju, brother and former managing director B. Rama Raju and former chief financial officer Srinivas Vadlamani are in a jail in the city after being arrested in connection with the swindle.
With the case being transferred to it from the crime investigation department of the Andhra Pradesh police, CBI can gain custody of Raju for up to nine days to question him over the scam. CBI officials who didn’t want to be named said records and other material associated with the Satyam probe were being taken over by the agency, which would register a case soon.
Raju was arrested after confessing on 7 January that he had been cooking the company’s books over several years by inflating revenue and profit and creating fictitious profits.
The Andhra Pradesh Police, the Serious Fraud Investigation Office, market regulator Securities and Exchange Board of India (Sebi) and the Institute of Chartered Accountants of India, the country’s main accounting body, and the Income-tax (I-T) department are involved in probing various aspects of the Satyam fraud.
A local court in Hyderabad on Wednesday allowed the I-T department to interrogate Raju on 21 February. Sebi officials questioned and recorded the statement of Raju and his brother for three days from 4 February in Hyderabad’s Chanchalguda jail.
Bail petitions filed by the Raju brothers and Vadlamani were dismissed by the court, which also allowed Sebi to question the former chief financial officer and former Price Waterhouse partners S. Gopalakrishan and Talluri Srinivas, also arrested in connection with the scam.
Satyam’s accounts are being examined by the audit firms Deloitte Touche Tohmatsu and KPMG, whose India chief operating officer Richard Rekhy said the restatement of accounts could take as long as six months. “It is not a one-year account, you have to go back three-four years...,” Rekhy said.
The Central government dissolved Satyam’s board and appointed directors led by Kiran Karnik, former president of the industry body National Association of Software and Service Companies, after the scandal broke. On Tuesday, the government decided to supersede the boards of Maytas Infra Ltd and Maytas Properties Ltd, firms promoted by members of the Raju family.
Maytas Infra shares rose Rs2.70, or 5%, to Rs56.70 on Wednesday as investors cheered the news. Maytas Infra said in a statement that it will contest the government’s move to remove the construction firm’s directors before the Company Law Board.
The Andhra Pradesh government said it will not act in haste against Maytas Infra. “The government will not cancel the projects awarded to Maytas just because the management is changing. The agreement has been signed with the company and it would be responsible for carrying the projects forward,” state finance minister K. Rosaiah said.
Among the main projects awarded to Maytas Infra and its joint venture partners is the Rs12,200-crore Hyderabad Metro Rail, for which financial closure is supposed to be achieved by March-end.
In a separate development, Union labour minister Oscar Fernandes said Satyam has 43,622 workers, citing the records of the government’s pension fund authority.
On Tuesday, corporate affairs minister Gupta told lawmakers that Satyam has 53,000 workers, adding that the government had no knowledge of bogus workers.
The Hyderabad-based company padded employee numbers to siphon off cash, a prosecutor alleged at a hearing last month.
Satyam employees earning more than Rs6,500 a month can opt not to join the government-run pension fund, according to the Employees’ Provident Fund Organization’s rules. Overseas employees of Satyam also aren’t required to join the pension plan.
Satyam buyer may emerge by Feb end: Parekh
17 Feb 2009, REUTERS
NEW DELHI: Buyers for fraud-hit Satyam Computer Services are likely to emerge by the end of February, a senior board member said on Tuesday.
Asked whether he saw any buyer coming forward for Satyam, Deepak Parekh said: "Yes. By the end of this month."
Last week Satyam said it would accelerate plans to find a suitor after India's market regulator amended takeover rules.
Satyam is looking to trim the number of its senior managers, a company spokeswoman said as the cash-starved outsourcer plans to find a suitor.
"Two managers have gone. We do not have a number but it is likely more will go," Archana Muthappa, head of media relations in India said over telephone. "It is part of a rationalisation of the organisation structure."
She declined to put a time frame for the process but said the government appointed board was discussing it.
The two officials who have quit are Subu D Subramanian, global head of manufacturing and automotives division and Anil Kumar, a senior vice-president at Satyam's financial services division, she said.
Satyam, India's fourth-largest outsourcer, is battling for survival since Jan. 7 when its founder Ramalinga Raju quit as chairman revealing profits have been falsified for years and $1 billion of cash and bank balances did not exist in the country's biggest corporate scandal.
The government dissolved Satyam's board and appointed six directors to save Satyam and its 50,000 employees. The new board has appointed Goldman Sachs and Avendus, an Indian investment bank, to help find potential investors.
NEW DELHI: Buyers for fraud-hit Satyam Computer Services are likely to emerge by the end of February, a senior board member said on Tuesday.
Asked whether he saw any buyer coming forward for Satyam, Deepak Parekh said: "Yes. By the end of this month."
Last week Satyam said it would accelerate plans to find a suitor after India's market regulator amended takeover rules.
Satyam is looking to trim the number of its senior managers, a company spokeswoman said as the cash-starved outsourcer plans to find a suitor.
"Two managers have gone. We do not have a number but it is likely more will go," Archana Muthappa, head of media relations in India said over telephone. "It is part of a rationalisation of the organisation structure."
She declined to put a time frame for the process but said the government appointed board was discussing it.
The two officials who have quit are Subu D Subramanian, global head of manufacturing and automotives division and Anil Kumar, a senior vice-president at Satyam's financial services division, she said.
Satyam, India's fourth-largest outsourcer, is battling for survival since Jan. 7 when its founder Ramalinga Raju quit as chairman revealing profits have been falsified for years and $1 billion of cash and bank balances did not exist in the country's biggest corporate scandal.
The government dissolved Satyam's board and appointed six directors to save Satyam and its 50,000 employees. The new board has appointed Goldman Sachs and Avendus, an Indian investment bank, to help find potential investors.
Monday, February 16, 2009
Satyam climbs 6% as Sebi amends takeover norms
16 Feb 2009, ET Bureau
MUMBAI: Shares of the fraud-hit Satyam Computer Services were in the limelight on Monday after the market regulator SEBI eased takeover norms for
companies whose board has been superseded by the government, under which suitors such as those for Satyam Computer need not make an open offer.
The amended rules also disallows open offers from rival bidders if an acquirer has already made an open offer. The regulator said the amendment to the Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, provides for "relaxation from the strict compliance of provisions of Chapter-III in certain cases."
Chapter-III deals with mandatory open offer if an entity acquires 15 per cent stake in a company, as also for acquisition or change of control of the company, among others.
At 3 pm, shares of Satyam Computer climbed 5.83 per cent to Rs 49 on the BSE.
MUMBAI: Shares of the fraud-hit Satyam Computer Services were in the limelight on Monday after the market regulator SEBI eased takeover norms for
companies whose board has been superseded by the government, under which suitors such as those for Satyam Computer need not make an open offer.
The amended rules also disallows open offers from rival bidders if an acquirer has already made an open offer. The regulator said the amendment to the Sebi (Substantial Acquisition of Shares and Takeovers) Regulations, 1997, provides for "relaxation from the strict compliance of provisions of Chapter-III in certain cases."
Chapter-III deals with mandatory open offer if an entity acquires 15 per cent stake in a company, as also for acquisition or change of control of the company, among others.
At 3 pm, shares of Satyam Computer climbed 5.83 per cent to Rs 49 on the BSE.
Satyam to restate its books by the end of March
February 16, 2009,
Satyam Computer Services Ltd is looking to restate its financial results for the third quarter-ended December 31, 2008 sometime in March this year. “We are looking at restating accounts for the quarter-ending December 31 by the end of March this year. Our auditors are working towards this end,” a Satyam spokesperson said at the weekend.
The only caveat to this possibility would be if the auditors decide to restate results of the company over the past several years, which could further delay a clearer picture of the Hyderabad-based IT company’s actual financial position.
Satyam chairman Kiran Karnik had earlier stated that a restatement of accounts of the scam-ridden company would take time, though the good receivables position of the company at Rs 1,700 crore were a positive indicator as far as its financial stability is concerned.
Karnik has also said that a restatement of accounts should ideally have no bearing on the sale of the company. KPMG and Deloitte were entrusted the task of restating Satyam’s account by the company’s board, following founder chairman Ramalinga Raju’s confession on January 7 that $1 billion on the company’s balancesheet was faked.
On the total shortfall of Rs 15 crore in staff provident fund remissions to the Employees Provident Fund Organisation (EPFO) for the month of December from Satyam’s end, the spokesperson said, “We have been co-operating with the EPF office on this and made the appropriate clarifications to their complaint. The 43,000-odd employee numbers with the EPFO are accurate, if you exclude trainees and non-Indian employees. Going ahead, the accounting restatement will also tally with the employee audit.”
To a query if remissions for December and January had been carried out, the spokesperson said, “As of January, we have fully complied with all the statutory requirements on the PF front.”
The process of finding a strategic investor in the company is currently on even as offers for management control in the company have poured in from companies like engineering and construction firm Larsen & Toubro Ltd (L&T), the Hinduja Group, the Spice Group and Tech Mahindra. L&T, which presently has 12 per cent stakeholding in Satyam, is said to be holding on to plans to further increase its stake via the open market till a clearer picture of Satyam’s financial status emerges post-restatement of accounts.
Satyam chairman Kiran Karnik had said after the board meeting on Thursday last that the company is financially stable and a final roadmap for the company would be decided in the next seven to 10 days. The company has secured Rs 600 crore in bank loans as a buffer to tide over cash shortfalls in the medium term.
The company has reiterated that its customers have stood by it and ruled out losing contracts to competitors. Visiting Cisco chairman and chief executive officer John Chambers on Thursday said his company would continue to repose faith in its “long-term relationship” with Satyam.
Satyam Computer Services Ltd is looking to restate its financial results for the third quarter-ended December 31, 2008 sometime in March this year. “We are looking at restating accounts for the quarter-ending December 31 by the end of March this year. Our auditors are working towards this end,” a Satyam spokesperson said at the weekend.
The only caveat to this possibility would be if the auditors decide to restate results of the company over the past several years, which could further delay a clearer picture of the Hyderabad-based IT company’s actual financial position.
Satyam chairman Kiran Karnik had earlier stated that a restatement of accounts of the scam-ridden company would take time, though the good receivables position of the company at Rs 1,700 crore were a positive indicator as far as its financial stability is concerned.
Karnik has also said that a restatement of accounts should ideally have no bearing on the sale of the company. KPMG and Deloitte were entrusted the task of restating Satyam’s account by the company’s board, following founder chairman Ramalinga Raju’s confession on January 7 that $1 billion on the company’s balancesheet was faked.
On the total shortfall of Rs 15 crore in staff provident fund remissions to the Employees Provident Fund Organisation (EPFO) for the month of December from Satyam’s end, the spokesperson said, “We have been co-operating with the EPF office on this and made the appropriate clarifications to their complaint. The 43,000-odd employee numbers with the EPFO are accurate, if you exclude trainees and non-Indian employees. Going ahead, the accounting restatement will also tally with the employee audit.”
To a query if remissions for December and January had been carried out, the spokesperson said, “As of January, we have fully complied with all the statutory requirements on the PF front.”
The process of finding a strategic investor in the company is currently on even as offers for management control in the company have poured in from companies like engineering and construction firm Larsen & Toubro Ltd (L&T), the Hinduja Group, the Spice Group and Tech Mahindra. L&T, which presently has 12 per cent stakeholding in Satyam, is said to be holding on to plans to further increase its stake via the open market till a clearer picture of Satyam’s financial status emerges post-restatement of accounts.
Satyam chairman Kiran Karnik had said after the board meeting on Thursday last that the company is financially stable and a final roadmap for the company would be decided in the next seven to 10 days. The company has secured Rs 600 crore in bank loans as a buffer to tide over cash shortfalls in the medium term.
The company has reiterated that its customers have stood by it and ruled out losing contracts to competitors. Visiting Cisco chairman and chief executive officer John Chambers on Thursday said his company would continue to repose faith in its “long-term relationship” with Satyam.
Saturday, February 14, 2009
Satyam scam: Anti-fraud cell officials interrogate Rajus
14 Feb 2009,
HYDERABAD: A 12-member team of the Serious Fraud Investigation Office (SFIO) saturday quizzed Satyam Computers founder B. Ramalinga Raju, his brother B. Rama Raju and former chief financial officer Vadlamani Srinivas in Chanchalguda jail here.
The SFIO officials grilled the accused throughout the day in the presence of their lawyers. The officials divided themselves into three teams and questioned the accused separately from 10 a.m. to 5 p.m.
The interrogators recorded the statements of the accused with regard to various aspects of Rs.70-bn (Rs.7,000-crore/$1.43-bn) fraud admitted by Ramalinga Raju Jan 7.
The SFIO team is believed to have questioned Ramalinga Raju about the fudging of accounts, insider trading, diversion of Satyam funds to over 300 companies floated by him and his family and the role played by other company officials in the fraud.
A city court had Friday allowed SFIO to question all the five accused in jail over two days. The team will question on Sunday two former auditors of Pricewaterhouse - S. Gopalakrishnan and Srinivas Talluri.
SFIO, a multidisciplinary organisation that investigates serious financial frauds, had sought 10 days to record the statements of the accused.
The interrogation by SFIO has come close on the heels of market regulator Securities and Exchange Board of India (SEBI) questioning the Raju brothers for three days in jail.
The SEBI officials grilled them Feb 4-6 following an interim order from the Supreme Court.
SEBI has also filed a petition, seeking permission to interrogate Vadlamani Srinivas and two former auditors.
Sixth Additional Chief Metropolitan Magistrate D. Ramakrishna has reserved his orders on SEBI petition and will give his order Feb 17.
HYDERABAD: A 12-member team of the Serious Fraud Investigation Office (SFIO) saturday quizzed Satyam Computers founder B. Ramalinga Raju, his brother B. Rama Raju and former chief financial officer Vadlamani Srinivas in Chanchalguda jail here.
The SFIO officials grilled the accused throughout the day in the presence of their lawyers. The officials divided themselves into three teams and questioned the accused separately from 10 a.m. to 5 p.m.
The interrogators recorded the statements of the accused with regard to various aspects of Rs.70-bn (Rs.7,000-crore/$1.43-bn) fraud admitted by Ramalinga Raju Jan 7.
The SFIO team is believed to have questioned Ramalinga Raju about the fudging of accounts, insider trading, diversion of Satyam funds to over 300 companies floated by him and his family and the role played by other company officials in the fraud.
A city court had Friday allowed SFIO to question all the five accused in jail over two days. The team will question on Sunday two former auditors of Pricewaterhouse - S. Gopalakrishnan and Srinivas Talluri.
SFIO, a multidisciplinary organisation that investigates serious financial frauds, had sought 10 days to record the statements of the accused.
The interrogation by SFIO has come close on the heels of market regulator Securities and Exchange Board of India (SEBI) questioning the Raju brothers for three days in jail.
The SEBI officials grilled them Feb 4-6 following an interim order from the Supreme Court.
SEBI has also filed a petition, seeking permission to interrogate Vadlamani Srinivas and two former auditors.
Sixth Additional Chief Metropolitan Magistrate D. Ramakrishna has reserved his orders on SEBI petition and will give his order Feb 17.
Thursday, February 12, 2009
Two Hyderabad players to take over Maytas Infra
13 Feb 2009, ET Bureau
BANGALORE/HYDERABAD: Two little-known Hyderabad-based investors have emerged as surprisingly strong contenders for taking control of Maytas
Infrastructure, the beleaguered firm whose association with B Ramalinga Raju of Satyam Computer caused its business to implode in the past few weeks.
People close to the development said that the two investors are now doing due diligence of Maytas’ books and its various projects. A final decision is likely to be taken as early as next week. Infrastructure Leasing & Financial Services, the Mumbai-based lender, is helping investors in the process.
Rithwik Projects, one of the investors doing due diligence, already has experience of building irrigation projects, roads, bridges and flyovers across Andhra Pradesh, and other parts of the country. It is headed by CM Ramesh, the chairman and managing director. The other investor is believed to be one of the founders of SEW Infrastructure, another Hyderabad-based company. At this stage, it is not known if the investment in Maytas will be made by SEW or by its founder.
The development is intriguing and surprising for several reasons. For one, the two investors are relatively unknown players nationally and their sudden appearance on the scene has surprised people involved in the process. The promoter of one of the firms is believed to be close to a well-known Andhra Pradesh-based political party, and this is causing speculation over a backroom deal involving politicians.
Secondly, the takeover of Maytas by the two investors will take place through infusion of funds into the company.
The amount is estimated to be about Rs 200 crore. As of Thursday, Maytas has a market cap of about Rs 336 crore. For this price, the investors are likely to get a large company involved in prestigious projects such as the Hyderabad Metro.
This fund infusion is expected to dilute the holding of IL&FS and other investors, who now own more than 25% in Maytas. The Maharashtra government institution, Sicom, has already indicated that it will sell its stake.
The Raju family, which had pledged most of its holding in Maytas to IL&FS, is not expected to get anything. A person close to the talks said that IL&FS could maintain a reasonable stake in the company. Its executive chairman, Ravi Parthasarathy, is expected to also participate in the running of Maytas, along with representatives of the two investors. Mr Parthasarathy, who is in Singapore, did not reply to an e-mail questionnaire sent by ET on this issue.
IL&FS and other lenders got to own shares of Maytas after the promoters, who had pledged the shares, failed to pay margin calls after a steep drop in the company share price. IL&FS and other lenders have also provided about Rs 6,000 crore to Maytas for implementing its various projects. A few days ago, most of the lenders, including IL&FS, had approached the government seeking a representation on the board of Maytas.
In the proposed scheme of things, the new investors are asking the lenders to soften some of the loan conditions and waive some of the interest to be paid on the loans. The lenders are expected to take a hit, but the exact amount could not be ascertained.
Last month, rating agency Icra suspended the ratings it had assigned to the debt programmes and bank facilities of Maytas citing the financial scandal at Satyam. Banks have been concerned about the fate of the projects. Their woes have been compounded as a few clients (of Maytas Infra) have also invoked bank guarantees. “A change in management control appears imminent and prospective suitors are likely to look at their order book position which is good,” said an analyst with a global audit firm who did not wished not to be named.
BANGALORE/HYDERABAD: Two little-known Hyderabad-based investors have emerged as surprisingly strong contenders for taking control of Maytas
Infrastructure, the beleaguered firm whose association with B Ramalinga Raju of Satyam Computer caused its business to implode in the past few weeks.
People close to the development said that the two investors are now doing due diligence of Maytas’ books and its various projects. A final decision is likely to be taken as early as next week. Infrastructure Leasing & Financial Services, the Mumbai-based lender, is helping investors in the process.
Rithwik Projects, one of the investors doing due diligence, already has experience of building irrigation projects, roads, bridges and flyovers across Andhra Pradesh, and other parts of the country. It is headed by CM Ramesh, the chairman and managing director. The other investor is believed to be one of the founders of SEW Infrastructure, another Hyderabad-based company. At this stage, it is not known if the investment in Maytas will be made by SEW or by its founder.
The development is intriguing and surprising for several reasons. For one, the two investors are relatively unknown players nationally and their sudden appearance on the scene has surprised people involved in the process. The promoter of one of the firms is believed to be close to a well-known Andhra Pradesh-based political party, and this is causing speculation over a backroom deal involving politicians.
Secondly, the takeover of Maytas by the two investors will take place through infusion of funds into the company.
The amount is estimated to be about Rs 200 crore. As of Thursday, Maytas has a market cap of about Rs 336 crore. For this price, the investors are likely to get a large company involved in prestigious projects such as the Hyderabad Metro.
This fund infusion is expected to dilute the holding of IL&FS and other investors, who now own more than 25% in Maytas. The Maharashtra government institution, Sicom, has already indicated that it will sell its stake.
The Raju family, which had pledged most of its holding in Maytas to IL&FS, is not expected to get anything. A person close to the talks said that IL&FS could maintain a reasonable stake in the company. Its executive chairman, Ravi Parthasarathy, is expected to also participate in the running of Maytas, along with representatives of the two investors. Mr Parthasarathy, who is in Singapore, did not reply to an e-mail questionnaire sent by ET on this issue.
IL&FS and other lenders got to own shares of Maytas after the promoters, who had pledged the shares, failed to pay margin calls after a steep drop in the company share price. IL&FS and other lenders have also provided about Rs 6,000 crore to Maytas for implementing its various projects. A few days ago, most of the lenders, including IL&FS, had approached the government seeking a representation on the board of Maytas.
In the proposed scheme of things, the new investors are asking the lenders to soften some of the loan conditions and waive some of the interest to be paid on the loans. The lenders are expected to take a hit, but the exact amount could not be ascertained.
Last month, rating agency Icra suspended the ratings it had assigned to the debt programmes and bank facilities of Maytas citing the financial scandal at Satyam. Banks have been concerned about the fate of the projects. Their woes have been compounded as a few clients (of Maytas Infra) have also invoked bank guarantees. “A change in management control appears imminent and prospective suitors are likely to look at their order book position which is good,” said an analyst with a global audit firm who did not wished not to be named.
‘We’ve put out the fire, ensured financial stability’
Our job now is to find a home for Satyam, says Karnik.
Mr Kiran Karnik, Chairman of Satyam Computer Services, addressing the press in Mumbai on Thursday.
Mumbai/ New Delhi, Feb. 12 The cash-strapped Satyam Computer Services board may pledge its land holding to raise funds. The company is reported to be holding lands worth Rs 1,500-1,700 crore in Hyderabad.
“For a bank loan you may have to do so,” said the Satyam Chairman, Mr Kiran Karnik, who came out in the midst of the board meeting held in the headquarters of HDFC on Thursday, to brief reporters.
Sale process in 10 days
Asked if the company was looking forward to more funding, apart from the Rs 600 crore being extended by Bank of Baroda and IDBI Bank, he said the position was comfortable as of now. Employee salaries for February would be paid on time and the January salaries, including some vendor payments had been disbursed from receivables.
“We have put out the fire and are now looking at financial stability,” he said, while expressing confidence that the process for sale of the scam-hit company would be defined in next 7-10 days.
“We are discussing with a number of experts — lawyers, bankers and everybody in the game. Our job is to find an appropriate home for the company, which would nurture it so that it grows well. We have ensured financial stability – which is the first step, a very necessary step, but not a sufficient step. Now, what we need to do is to stabilise the company on an on-going basis.”
He conceded that he was aware recasting of accounts would take a long time and the board could not hold up the sale process on this count. The Satyam board was in talks with the market regulator SEBI on various issues, including the open offer. The CEO of the company, Mr A.S. Murty, was part of all discussions of the board, a large part of which was to do with customer retention and employee satisfaction.
Asked whether the forthcoming Lok Sabha elections would hamper the process, he said: “I do not think the model code of conduct will have an impact. And, any new government that takes over is also a democratically elected one.”
It is learnt that investment bankers Goldman Sachs and Avendus had made a presentation to the board.
Crisis over: Minister
While stating that the crisis situation of Satyam was over, the Minister for Corporate Affairs, Mr Prem Chand Gupta, said that a process is being worked out for bringing in a strategic investor for the company.
He disclosed this at a Managing Committee Meeting of Assocham here on Thursday. “Situation of crisis is over. The board (Government appointed) has total command now. The next step is to find a suitable strategic investor who can take over operations of Satyam,” he said.
The Minister, without specifying any particular time frame for selecting the strategic investor, said that the selection would be done in the highest possible transparent and fair manner to satisfy the requirement of post-Satyam corporate crisis.
On a query raised by the Assocham President, Mr Sajjan Jindal, on the issue of independent directors after Satyam episode, Mr Gupta said that the new Company Bill adequately makes independent directors equally responsible proportionate to roles assigned to them at the time of their appointment by the company concerned.
Mr Kiran Karnik, Chairman of Satyam Computer Services, addressing the press in Mumbai on Thursday.
Mumbai/ New Delhi, Feb. 12 The cash-strapped Satyam Computer Services board may pledge its land holding to raise funds. The company is reported to be holding lands worth Rs 1,500-1,700 crore in Hyderabad.
“For a bank loan you may have to do so,” said the Satyam Chairman, Mr Kiran Karnik, who came out in the midst of the board meeting held in the headquarters of HDFC on Thursday, to brief reporters.
Sale process in 10 days
Asked if the company was looking forward to more funding, apart from the Rs 600 crore being extended by Bank of Baroda and IDBI Bank, he said the position was comfortable as of now. Employee salaries for February would be paid on time and the January salaries, including some vendor payments had been disbursed from receivables.
“We have put out the fire and are now looking at financial stability,” he said, while expressing confidence that the process for sale of the scam-hit company would be defined in next 7-10 days.
“We are discussing with a number of experts — lawyers, bankers and everybody in the game. Our job is to find an appropriate home for the company, which would nurture it so that it grows well. We have ensured financial stability – which is the first step, a very necessary step, but not a sufficient step. Now, what we need to do is to stabilise the company on an on-going basis.”
He conceded that he was aware recasting of accounts would take a long time and the board could not hold up the sale process on this count. The Satyam board was in talks with the market regulator SEBI on various issues, including the open offer. The CEO of the company, Mr A.S. Murty, was part of all discussions of the board, a large part of which was to do with customer retention and employee satisfaction.
Asked whether the forthcoming Lok Sabha elections would hamper the process, he said: “I do not think the model code of conduct will have an impact. And, any new government that takes over is also a democratically elected one.”
It is learnt that investment bankers Goldman Sachs and Avendus had made a presentation to the board.
Crisis over: Minister
While stating that the crisis situation of Satyam was over, the Minister for Corporate Affairs, Mr Prem Chand Gupta, said that a process is being worked out for bringing in a strategic investor for the company.
He disclosed this at a Managing Committee Meeting of Assocham here on Thursday. “Situation of crisis is over. The board (Government appointed) has total command now. The next step is to find a suitable strategic investor who can take over operations of Satyam,” he said.
The Minister, without specifying any particular time frame for selecting the strategic investor, said that the selection would be done in the highest possible transparent and fair manner to satisfy the requirement of post-Satyam corporate crisis.
On a query raised by the Assocham President, Mr Sajjan Jindal, on the issue of independent directors after Satyam episode, Mr Gupta said that the new Company Bill adequately makes independent directors equally responsible proportionate to roles assigned to them at the time of their appointment by the company concerned.
Tuesday, February 10, 2009
Politics over Satyam hots up
HYDERABAD, 10 Feb: Chief minister Dr YS Rajashekar Reddy today told the AP Assembly that the Satyam fraud has been replicated in TDP president Mr N Chandrababu Naidu’s family owned Heritage Foods and the management of the latter is certain to go to prison.
Earlier in a significant development Mr Naidu admitted that his family managed NTR Trust received Rs 1 cr from former Satyam chairman Mr B Ramalinga Raju’s companies but not from Satyam or Maytas Infra.
Dr Reddy was replying to the two day debate on the Satyam fraud. Mr Naidu said he was ready for a probe by a sitting Judge into Heritage and that the probe should also cover the 14 companies to which Dr Reddy is allegedly linked.
There were raucous scenes in the House when Government Chief Whip Mr Kiran Kumar Reddy pointedly asked if he got Rs 1 cr from the Rajus, whether it is not a fact that Satyam spent Rs 80 cr towards making TDP membership cards and if it’s not true that Satyam sponsored his son Mr N Lokesh’s education in USA. Meanwhile, 30 legislators from the TDP, TRS, CPM and CPI, were suspended for the day in the evening session, when they tried to reopen the debate on Satyam
Earlier in a significant development Mr Naidu admitted that his family managed NTR Trust received Rs 1 cr from former Satyam chairman Mr B Ramalinga Raju’s companies but not from Satyam or Maytas Infra.
Dr Reddy was replying to the two day debate on the Satyam fraud. Mr Naidu said he was ready for a probe by a sitting Judge into Heritage and that the probe should also cover the 14 companies to which Dr Reddy is allegedly linked.
There were raucous scenes in the House when Government Chief Whip Mr Kiran Kumar Reddy pointedly asked if he got Rs 1 cr from the Rajus, whether it is not a fact that Satyam spent Rs 80 cr towards making TDP membership cards and if it’s not true that Satyam sponsored his son Mr N Lokesh’s education in USA. Meanwhile, 30 legislators from the TDP, TRS, CPM and CPI, were suspended for the day in the evening session, when they tried to reopen the debate on Satyam
Saturday, February 7, 2009
FIs seek to dissolve Maytas Infra board; Karnik Satyam chief
The institutions have approached the ministry of corporate affairs requesting it to invoke powers under the Companies Act to supersede the board of Maytas Infra and allow the institutions to claim ownership of the company
Hyderabad: Financial institutions (FIs) that have lent funds to promoters of Maytas Infra Ltd, promoted by family members of jailed Satyam Computer Services Ltd founder B. Ramalinga Raju, have approached the government to dissolve the board of the infrastructure company, according to people familiar with the development, who declined to be identified.
Meanwhile, the government announced that the former president of software lobby group Nasscom, Kiran Karnik, had been appointed chairman of the new board of Satyam.
Satyam’s woes began in the middle of December with a failed attempt to acquire Maytas Infra and Maytas Properties. On 7 January, Raju disclosed that, over the years, he had fudged the company’s accounts to the tune of at least Rs7,136 crore.
Since then, Maytas, too, has come under the scanner of regulators and government departments investigating the fraud, some of its board members have resigned, and at least a few contracts awarded to it previously have been cancelled by awarding companies and local governments.
Infrastructure Leasing and Financial Services Ltd (IL&FS), Sicom Ltd and IFCI Ltd loaned money to the promoters of Maytas Infra against shares pledged, but it was not immediately clear as to how much of the company’s holding has been pledged or how much money has been raised thus.
Sicom, an investment and industrial development body of the Maharashtra government and development finance institution IFCI informed Maytas Infra on 21 January that they had together acquired 24.39% of the firm’s equity through invocation of shares pledged by some shareholders of the company. The company, in turn, informed the stock exchanges about this development on the same day. Maytas Infra did not respond to queries on the subject.
A senior executive at Maytas Infra, who declined to be identified, claimed that the promoters held shares in the non-promoter quota and had not disclosed shares pledged despite a generic instruction to this effect by the country’s stock market regulator Securities and Exchange of India.
A senior executive of one of the lending institutions, who also did not want to be named, said: “The institutions have approached the ministry of corporate affairs requesting it to invoke powers under the Companies Act to supersede the board of Maytas Infra and allow the institutions to claim ownership of the company.”
Mint could not independently verify this. IL&FS managing director, Hari Shankaran, said he was not “in the loop on this subject”.
However, a senior IL&FS official, who declined to be identified, confirmed that the institution did “approach the ministry of corporate affairs asking it to appoint additional directors on the board of Maytas Infra under section 408 of Companies Act to handle the affairs of the company”.
The promoters of Maytas Infra hold 36.64% of the company’s paid-up equity of Rs58.85 crore under the promoters’ category. While institutions have 13.56%, other shareholders hold 49.79% stake, according to data as on 31 December. On Friday, according to Dow Jones, Maytas Infra told the Bombay Stock Exchange that the promoters had pledged 15.15% stake and that B Ramalinga Raju had pledged his entire stake as part of this.
Maytas Infra ended the year to March 2008 with Rs1,660.15 crore in revenue and a net profit of Rs99.99 crore.
325 firms; new chairman
Meanwhile, minister for corporate affairs Prem Chand Gupta said on Friday that as many as 325 companies and 25 individuals are part of the investigation by its Serious Fraud Investigating Office.
“Some of them listed, some of them, private,” he added.
Meanwhile citing un-named persons, PTI reported that Satyam’s new management had pledged land to secure a Rs600 crore term working capital loan, which was granted by IDBI Bank LtdBank of Baroda and Life Insurance Corp. of India.
On Friday, on the heels of National Australia Bank Ltd suspending future contracts to Satyam, the World Health Organization (WHO) said that it was watching the developments at the technology vendor, but is yet to find any evidence of fraudulent practices by the company as a vendor.
“WHO is reviewing carefully its current contractual agreements with Satyam and possible contingency arrangements for completion of (current) project work, in the event that Satyam were no longer able to perform,” a WHO spokesperson told PTI.
Hyderabad: Financial institutions (FIs) that have lent funds to promoters of Maytas Infra Ltd, promoted by family members of jailed Satyam Computer Services Ltd founder B. Ramalinga Raju, have approached the government to dissolve the board of the infrastructure company, according to people familiar with the development, who declined to be identified.
Meanwhile, the government announced that the former president of software lobby group Nasscom, Kiran Karnik, had been appointed chairman of the new board of Satyam.
Satyam’s woes began in the middle of December with a failed attempt to acquire Maytas Infra and Maytas Properties. On 7 January, Raju disclosed that, over the years, he had fudged the company’s accounts to the tune of at least Rs7,136 crore.
Since then, Maytas, too, has come under the scanner of regulators and government departments investigating the fraud, some of its board members have resigned, and at least a few contracts awarded to it previously have been cancelled by awarding companies and local governments.
Infrastructure Leasing and Financial Services Ltd (IL&FS), Sicom Ltd and IFCI Ltd loaned money to the promoters of Maytas Infra against shares pledged, but it was not immediately clear as to how much of the company’s holding has been pledged or how much money has been raised thus.
Sicom, an investment and industrial development body of the Maharashtra government and development finance institution IFCI informed Maytas Infra on 21 January that they had together acquired 24.39% of the firm’s equity through invocation of shares pledged by some shareholders of the company. The company, in turn, informed the stock exchanges about this development on the same day. Maytas Infra did not respond to queries on the subject.
A senior executive at Maytas Infra, who declined to be identified, claimed that the promoters held shares in the non-promoter quota and had not disclosed shares pledged despite a generic instruction to this effect by the country’s stock market regulator Securities and Exchange of India.
A senior executive of one of the lending institutions, who also did not want to be named, said: “The institutions have approached the ministry of corporate affairs requesting it to invoke powers under the Companies Act to supersede the board of Maytas Infra and allow the institutions to claim ownership of the company.”
Mint could not independently verify this. IL&FS managing director, Hari Shankaran, said he was not “in the loop on this subject”.
However, a senior IL&FS official, who declined to be identified, confirmed that the institution did “approach the ministry of corporate affairs asking it to appoint additional directors on the board of Maytas Infra under section 408 of Companies Act to handle the affairs of the company”.
The promoters of Maytas Infra hold 36.64% of the company’s paid-up equity of Rs58.85 crore under the promoters’ category. While institutions have 13.56%, other shareholders hold 49.79% stake, according to data as on 31 December. On Friday, according to Dow Jones, Maytas Infra told the Bombay Stock Exchange that the promoters had pledged 15.15% stake and that B Ramalinga Raju had pledged his entire stake as part of this.
Maytas Infra ended the year to March 2008 with Rs1,660.15 crore in revenue and a net profit of Rs99.99 crore.
325 firms; new chairman
Meanwhile, minister for corporate affairs Prem Chand Gupta said on Friday that as many as 325 companies and 25 individuals are part of the investigation by its Serious Fraud Investigating Office.
“Some of them listed, some of them, private,” he added.
Meanwhile citing un-named persons, PTI reported that Satyam’s new management had pledged land to secure a Rs600 crore term working capital loan, which was granted by IDBI Bank LtdBank of Baroda and Life Insurance Corp. of India.
On Friday, on the heels of National Australia Bank Ltd suspending future contracts to Satyam, the World Health Organization (WHO) said that it was watching the developments at the technology vendor, but is yet to find any evidence of fraudulent practices by the company as a vendor.
“WHO is reviewing carefully its current contractual agreements with Satyam and possible contingency arrangements for completion of (current) project work, in the event that Satyam were no longer able to perform,” a WHO spokesperson told PTI.
Friday, February 6, 2009
Satyam's Murty sold 40,000 shares before Maytas fiasco
MUMBAI: Mr A S Murty, the newly appointed Chief Executive Officer of beleaguered Satyam Computer, had sold 40,000 shares at an estimated Rs 90 lakh just before the IT firm's failed bid for the two Maytas companies in December.
As per regulatory disclosures made by Satyam to the stock exchanges, Mr Murty has sold 21,000 shares between December 12 and 15 and 19,000 more on December 16, the day Satyam made a failed $1.6 billion (Rs 8,000 crore) bid for the two firms promoted by t he kin of Satyam founder Mr Ramalinga Raju.
Calculated on the basis of average BSE closing share prices of Satyam between December 12 and 16, the sell value comes to over Rs 89.68 lakh. Satyam shares closed at Rs 220.75 on December 12, Rs 225.40 on December 15 and Rs 226.50 on December 16 on the BSE.
On December 17, Satyam withdrew the bid for the Maytas firms after facing strong investor dissent, which saw its ADRs listed on the NYSE plunging 80 per cent in a single day. The share sale assumes importance as Satyam scrips took a 30 per cent hamm ering on the bourses on December 17 and plunged to Rs 158.05.
Since then the scrip has been volatile on the bourses and is currently hovering around Rs 47 on the BSE. Based on yesterday's closing price of Satyam on the BSE the sell value of Mr Murty's shares comes to Rs 18.50 lakh, nearly a fifth of the valuation h e got in December. - PTI
As per regulatory disclosures made by Satyam to the stock exchanges, Mr Murty has sold 21,000 shares between December 12 and 15 and 19,000 more on December 16, the day Satyam made a failed $1.6 billion (Rs 8,000 crore) bid for the two firms promoted by t he kin of Satyam founder Mr Ramalinga Raju.
Calculated on the basis of average BSE closing share prices of Satyam between December 12 and 16, the sell value comes to over Rs 89.68 lakh. Satyam shares closed at Rs 220.75 on December 12, Rs 225.40 on December 15 and Rs 226.50 on December 16 on the BSE.
On December 17, Satyam withdrew the bid for the Maytas firms after facing strong investor dissent, which saw its ADRs listed on the NYSE plunging 80 per cent in a single day. The share sale assumes importance as Satyam scrips took a 30 per cent hamm ering on the bourses on December 17 and plunged to Rs 158.05.
Since then the scrip has been volatile on the bourses and is currently hovering around Rs 47 on the BSE. Based on yesterday's closing price of Satyam on the BSE the sell value of Mr Murty's shares comes to Rs 18.50 lakh, nearly a fifth of the valuation h e got in December. - PTI
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