21 May 2009,PTI
NEW YORK: Scam-hit Satyam seems to be losing its status as a noteworthy rival for the top Indian IT firms, as Wipro has become the second major player in this space after Infosys to drop its name from the list of competitors.
Satyam used to be a regular in the list of competitors mentioned by its larger peers like Infosys and Wipro in their annual report filings with the US market regulator Securities and Exchange Commission.
However, Satyam's name is conspicuously absent in Wipro's latest annual report filing for the financial year ended March 31, 2009. Prior to this, Infosys also dropped Satyam's name from its list of noteworthy rivals in its latest annual report filing, filed with SEC earlier this month.
All the three Indian IT firms, Infosys, Wipro and Satyam are listed in the US -- Infosys on Nasdaq and the rest two on the New York Stock Exchange.
Before it was hit by the country's biggest-ever fraud admitted to by its founder and then chairman Ramalinga Raju in January, Satyam was known as the fourth-biggest software exporter from the country after TCS, Infosys and Wipro.
Satyam Computer has already embarked upon a revival path after its government-appointed board finalised a deal to sell controlling stake of 51 per cent in the company to domestic conglomerate Mahindra Group.
The other names and factors about competition in Infosys' latest annual filing have remained broadly unchanged from the previous year.
Infosys has said that it competes with "consulting firms such as Accenture Limited, Atos Origin, BearingPoint Inc, Cap Gemini SA, and Deloitte Consulting LLP."
Besides, it also competes with divisions of large global technology firms such as HP and IBM, IT outsourcing firms such as Computer Sciences Corp, Keane, Logica and Perot Systems; offshore technology services firms such as Cognizant, Tata Consultancy Services and Wipro Technologies Limited.
Other companies named as its competitors include "software firms such as Oracle Corporation and SAP AG; business process outsourcing firms such as Genpact Limited and WNS Global Services; and in-house IT departments of large corporations."
However, Wipro and Infosys have not clarified the reasons for Satyam's omission from among their competitors.
About competition, Wipro said that its "competitors are located internationally as well as in India. We expect that competition will further increase and will potentially include companies from other countries that have lower personnel costs than those currently in India."
"We believe we compete favourably with respect to each of these factors and believe our success has been driven by quality leadership, our ability to create client loyalty and our expertise in targeted select markets," it added.
Showing posts with label Wipro. Show all posts
Showing posts with label Wipro. Show all posts
Sunday, May 24, 2009
Friday, May 1, 2009
Cash reserves help IT biggies stay in shape
2 May 2009 ET Bureau
MUMBAI: It is said what one does in the past matters the most when times are tough. And if this is true, then the country’s top three IT companies —
Tata Consultancy Services, Infosys Technologies and Wipro — have a reason to cheer. Their balance sheets for FY09 show that the IT biggies are sitting on healthy reserves and surplus, which can help them in times of crisis, said experts.
Reserves and surplus account of a company consists mainly of retained net profits over the years, apart from share issue premium. Unlike manufacturing companies where the reserves and surplus prominently reflect fixed manufacturing assets, for IT companies liquid assets such as cash and equivalents, sundry debtors, and loans and advances constitute as much as two-third of the reserves and surplus.
“The reserves and surplus account of an IT company mainly represents liquid assets, since the sector is not capital intensive unlike manufacturing companies. For IT companies, it means huge cash,” said investment advisor SP Tulsian.
The largest IT exporter TCS reported reserves and surplus of Rs 15,502 crore at the end of FY09, up 28% from last year. For Infosys, which trails TCS in revenues, it was up by 33% to Rs 17,968 crore. Wipro, which is third in line, recorded a rise of nearly 20% in its reserves and surplus at Rs 13,630 crore.
“Top IT companies have been running profitable operations, which have shored up the reserves and surplus accounts. This shows the strength of a company and since these are highly liquid in nature, it also reflects their ability to face challenging environment,” said Infosys CFO V Balakrishnan.
However, the large reserves of top Indian IT companies are in sharp contrast with the practices followed by their larger global peers. For instance, IBM and Microsoft have not retained their earnings. These companies distribute their excess profits among stakeholders. Earlier this week, IBM declared buyback of shares amounting to $3 billion. The company has also raised its dividend by 10% - the 14th consecutive year in which it is increasing its dividend.
However, the management of Indian IT companies and accounting professionals whom ET spoke to feel that large reserves help in tough times. “Conservation of cash is essential given the uncertain environment. Cash provides safety and also fuels inorganic growth by facilitating acquisitions,” said Aravind Viswanathan, senior manager (investor relations) at Wipro. The company reduced its dividend from Rs 6 per share in the previous year to Rs 4 per share in FY09, PR Ramesh partner at Deloitte agrees. “It’s a good strategy on the part of companies to preserve cash in uncertain times. That provides for a war chest,” he said.
MUMBAI: It is said what one does in the past matters the most when times are tough. And if this is true, then the country’s top three IT companies —
Tata Consultancy Services, Infosys Technologies and Wipro — have a reason to cheer. Their balance sheets for FY09 show that the IT biggies are sitting on healthy reserves and surplus, which can help them in times of crisis, said experts.
Reserves and surplus account of a company consists mainly of retained net profits over the years, apart from share issue premium. Unlike manufacturing companies where the reserves and surplus prominently reflect fixed manufacturing assets, for IT companies liquid assets such as cash and equivalents, sundry debtors, and loans and advances constitute as much as two-third of the reserves and surplus.
“The reserves and surplus account of an IT company mainly represents liquid assets, since the sector is not capital intensive unlike manufacturing companies. For IT companies, it means huge cash,” said investment advisor SP Tulsian.
The largest IT exporter TCS reported reserves and surplus of Rs 15,502 crore at the end of FY09, up 28% from last year. For Infosys, which trails TCS in revenues, it was up by 33% to Rs 17,968 crore. Wipro, which is third in line, recorded a rise of nearly 20% in its reserves and surplus at Rs 13,630 crore.
“Top IT companies have been running profitable operations, which have shored up the reserves and surplus accounts. This shows the strength of a company and since these are highly liquid in nature, it also reflects their ability to face challenging environment,” said Infosys CFO V Balakrishnan.
However, the large reserves of top Indian IT companies are in sharp contrast with the practices followed by their larger global peers. For instance, IBM and Microsoft have not retained their earnings. These companies distribute their excess profits among stakeholders. Earlier this week, IBM declared buyback of shares amounting to $3 billion. The company has also raised its dividend by 10% - the 14th consecutive year in which it is increasing its dividend.
However, the management of Indian IT companies and accounting professionals whom ET spoke to feel that large reserves help in tough times. “Conservation of cash is essential given the uncertain environment. Cash provides safety and also fuels inorganic growth by facilitating acquisitions,” said Aravind Viswanathan, senior manager (investor relations) at Wipro. The company reduced its dividend from Rs 6 per share in the previous year to Rs 4 per share in FY09, PR Ramesh partner at Deloitte agrees. “It’s a good strategy on the part of companies to preserve cash in uncertain times. That provides for a war chest,” he said.
Saturday, April 25, 2009
Infosys generates $250 mn free cash: Nilekani
24 Apr 2009, PTI
NEW DELHI: Software exporter Infosys on Friday said that the company generates 250 million dollar free cash every quarter and will use the slowdown to fine tune their business.
In an interview to CNN, Infosys Co-chairman Nandan Nilekani said, "Infosys has a very strong position. We have two billion dollar in cash. We produce 250 million dollar every quarter in free cash flow."
However, Nilekani added for the coming financial year, the company's growth would decline by 3-6 per cent in dollar terms because of the uncertainty in the global economy.
"We are waiting for this whole thing to get over," he said.
Talking about the clients reaction to the slowdown, he said "I think our customers are cautious. They are still waiting and watching, and seeing how and when the recovery will happen. I think they're very, very prudent about their IT spending. So we are seeing all that on our business. It's a very uncertain environment out there."
The clients are waiting and watching, because they don't really know how long this crisis will last. They're waiting for growth to come back. They're waiting for liquidity to improve, he added.
Further the company co-chairman said, "We actually use this occasion to really even fine-tune your business even further, and be ready for the next upturn whenever it comes."
The company announced its fourth quarter results this month and reported first ever sequential fall in its revenue in a decade for the March 2009 quarter.
NEW DELHI: Software exporter Infosys on Friday said that the company generates 250 million dollar free cash every quarter and will use the slowdown to fine tune their business.
In an interview to CNN, Infosys Co-chairman Nandan Nilekani said, "Infosys has a very strong position. We have two billion dollar in cash. We produce 250 million dollar every quarter in free cash flow."
However, Nilekani added for the coming financial year, the company's growth would decline by 3-6 per cent in dollar terms because of the uncertainty in the global economy.
"We are waiting for this whole thing to get over," he said.
Talking about the clients reaction to the slowdown, he said "I think our customers are cautious. They are still waiting and watching, and seeing how and when the recovery will happen. I think they're very, very prudent about their IT spending. So we are seeing all that on our business. It's a very uncertain environment out there."
The clients are waiting and watching, because they don't really know how long this crisis will last. They're waiting for growth to come back. They're waiting for liquidity to improve, he added.
Further the company co-chairman said, "We actually use this occasion to really even fine-tune your business even further, and be ready for the next upturn whenever it comes."
The company announced its fourth quarter results this month and reported first ever sequential fall in its revenue in a decade for the March 2009 quarter.
Wednesday, April 15, 2009
Infosys' cash, equivalents cross $2 bn mark
15 Apr 2009, PTI
NEW DELHI: Software services major Infosys Technologies today said its cash and cash equivalents stood at over $2 billion at the end of last fiscal in spite of credit crisis worldwide.
"The cash and cash equivalents, including investments in liquid mutual funds and certificate of deposits, as on March 31, 2009 were Rs 10,993 crore," a company statement said.
Commenting on the liquidity and capital expenditure plans of the company, Infosys Technologies Chief Financial Officer V Balakrishnan said: "We improved our operating margins during fiscal 2009 despite a very difficult global economic environment combined with highly volatile currency markets."
"We have a strong balance sheet with cash and cash equivalents of over $2 billion," Balakrishnan added.
Besides, the software firm is comfortably placed in terms of current assets for the financial year ended March 31, 2009, at Rs 12,288 crore, a major source of fund for companies to meet their day to day expenses.
At the end of the fourth quarter of the last fiscal, the company's current assets stood at Rs 12,288 crore, a rise of 44.63 per cent from the previous period a year ago.
In the March quarter of 2007-08, the current assets of the company stood at Rs 8,496 crore.
An analysis of the balance sheet data of the last five financial years shows that the net current assets of the company are on an uptrend since FY'04.
In FY'04, they were at Rs 1,220.12 crore, which increased to Rs 2,384.58 crore in FY'05. In 2005-06 and FY'07 they rose further to Rs 3,832 crore and Rs 7,137 crore, respectively.
Current assets are used to fund day-to-day operations and pay ongoing expenses. Current assets represents the sum of cash and cash equivalents, inventory and other assets that could be converted to cash in a short span of time.
Infosys Technologies today reported a 29 per cent increase in its fourth quarter net profit on improved operating margins, but forecast a decline in its revenue and earnings during the current fiscal as many of its clients have been hit by the global financial crisis.
The country's second largest IT exporter's net profit after tax stood at Rs 1,613 crore in the quarter ended March 31. The revenue rose 24.1 per cent to Rs 5,635 crore on year-on-year basis.
NEW DELHI: Software services major Infosys Technologies today said its cash and cash equivalents stood at over $2 billion at the end of last fiscal in spite of credit crisis worldwide.
"The cash and cash equivalents, including investments in liquid mutual funds and certificate of deposits, as on March 31, 2009 were Rs 10,993 crore," a company statement said.
Commenting on the liquidity and capital expenditure plans of the company, Infosys Technologies Chief Financial Officer V Balakrishnan said: "We improved our operating margins during fiscal 2009 despite a very difficult global economic environment combined with highly volatile currency markets."
"We have a strong balance sheet with cash and cash equivalents of over $2 billion," Balakrishnan added.
Besides, the software firm is comfortably placed in terms of current assets for the financial year ended March 31, 2009, at Rs 12,288 crore, a major source of fund for companies to meet their day to day expenses.
At the end of the fourth quarter of the last fiscal, the company's current assets stood at Rs 12,288 crore, a rise of 44.63 per cent from the previous period a year ago.
In the March quarter of 2007-08, the current assets of the company stood at Rs 8,496 crore.
An analysis of the balance sheet data of the last five financial years shows that the net current assets of the company are on an uptrend since FY'04.
In FY'04, they were at Rs 1,220.12 crore, which increased to Rs 2,384.58 crore in FY'05. In 2005-06 and FY'07 they rose further to Rs 3,832 crore and Rs 7,137 crore, respectively.
Current assets are used to fund day-to-day operations and pay ongoing expenses. Current assets represents the sum of cash and cash equivalents, inventory and other assets that could be converted to cash in a short span of time.
Infosys Technologies today reported a 29 per cent increase in its fourth quarter net profit on improved operating margins, but forecast a decline in its revenue and earnings during the current fiscal as many of its clients have been hit by the global financial crisis.
The country's second largest IT exporter's net profit after tax stood at Rs 1,613 crore in the quarter ended March 31. The revenue rose 24.1 per cent to Rs 5,635 crore on year-on-year basis.
Monday, February 23, 2009
Satyam gets nod to select buyer
22 Feb 2009, ET Bureau
Satyam Computer Services on Thursday won approval to increase its capital base and rope in strategic investors, setting the stage for
keenly-contested auction critical to ensure the company’s survival.
The Company Law Board (CLB) permitted the scandal-hit software company to raise its authorised capital to Rs 280 crore from Rs 160 crore, and allowed it to induct a strategic investor through a competitive auction process.
Engineering major L&T, Mahindra group firm Tech Mahindra and BK Modi-owned Spice Group are some of the suitors that have declared their interest in Satyam. The government-appointed board of Satyam is considering the option to impose a lock-in clause while making a preferential allotment to the strategic investor.
This is aimed at discouraging frivolous bidders from buying into the software firm. One option is to have a three-year lock-in on 26% of the preferential allotment of equity shares to be made to a strategic investor. Once a timeframe is finalised, the board will submit the plan to the CLB and then to SEBI.
Satyam Computer Services on Thursday won approval to increase its capital base and rope in strategic investors, setting the stage for
keenly-contested auction critical to ensure the company’s survival.
The Company Law Board (CLB) permitted the scandal-hit software company to raise its authorised capital to Rs 280 crore from Rs 160 crore, and allowed it to induct a strategic investor through a competitive auction process.
Engineering major L&T, Mahindra group firm Tech Mahindra and BK Modi-owned Spice Group are some of the suitors that have declared their interest in Satyam. The government-appointed board of Satyam is considering the option to impose a lock-in clause while making a preferential allotment to the strategic investor.
This is aimed at discouraging frivolous bidders from buying into the software firm. One option is to have a three-year lock-in on 26% of the preferential allotment of equity shares to be made to a strategic investor. Once a timeframe is finalised, the board will submit the plan to the CLB and then to SEBI.
Saturday, February 7, 2009
For 7 yrs, accounts ‘managed,’ papers hidden: Satyam top brass tell cops
Large I-T team to look into Satyam fraud
Six Commissioners to oversee process of cases connected with 320 companies
HYDERABAD: The Income-Tax department has mobilised a large number of staff members from its local offices for a comprehensive investigation into the fraud in Satyam Computers.
A top official said the staff will join duty in a day or two following the IT Chief Commissioner’s orders earlier this week. He said the investigations would not be a routine scrutiny but go deep into various issues. The department procured 400 more files of the company for scrutiny.
As many as six Commissioners had been appointed to oversee the process of centralisation of Income-Tax cases connected with 320 companies of Satyam group. Every assessment was being monitored by an Additional Commissioner who had put in no less than 15 years of service.
The investigation was focussed on how the fraud was committed, strategy employed and where money was siphoned off. The persons who planned and ‘implemented’ the scandal were also being tracked down with precise dates. The cash and bank balances were checked with bank statements. He also said assessment year 2007-08 was the most crucial year of investigation since most of the companies promoted by Satyam group, especially those involved in land transactions, were floated in that year.
Meanwhile, Director General of Income-Tax (Investigation) Amalendu Das has said the department would reopen tax assessments of Satyam Computers in the previous years if the findings revealed that its income had escaped tax on account of the fraud in the company. According to the IT Act, the department can reopen assessment of Satyam for the assessment years 2002-03 to 2007-08 if its findings disclosed evasion of tax, he said.
One area that the department had focussed in detection of loss of income was whether any fictitious or inflated tax deduction at source (TDS) claims were made by Satyam Computers in previous years on non-existing fixed deposits. A suspicion about such claims was triggered by Satyam’s balance sheet on September 30 indicating a non-existent interest accrual of Rs. 374 crore from conjured up bank deposits.
Granted bail
A court on Friday granted bail to D. Gopalakrishnam Raju, general manager of SRSR Advisory Services, who was arrested in connection with the fraud. He was said to be a trusted man of former Satyam chairman B. Ramalinga Raju and was instrumental in the land deals. The Securities and Exchange Board of India concluded its three-day interrogation of Mr. Ramalinga Raju and his brother Rama Raju in jail. Two teams of SEBI questioned them separately following permission granted by the Supreme Court.
Six Commissioners to oversee process of cases connected with 320 companies
HYDERABAD: The Income-Tax department has mobilised a large number of staff members from its local offices for a comprehensive investigation into the fraud in Satyam Computers.
A top official said the staff will join duty in a day or two following the IT Chief Commissioner’s orders earlier this week. He said the investigations would not be a routine scrutiny but go deep into various issues. The department procured 400 more files of the company for scrutiny.
As many as six Commissioners had been appointed to oversee the process of centralisation of Income-Tax cases connected with 320 companies of Satyam group. Every assessment was being monitored by an Additional Commissioner who had put in no less than 15 years of service.
The investigation was focussed on how the fraud was committed, strategy employed and where money was siphoned off. The persons who planned and ‘implemented’ the scandal were also being tracked down with precise dates. The cash and bank balances were checked with bank statements. He also said assessment year 2007-08 was the most crucial year of investigation since most of the companies promoted by Satyam group, especially those involved in land transactions, were floated in that year.
Meanwhile, Director General of Income-Tax (Investigation) Amalendu Das has said the department would reopen tax assessments of Satyam Computers in the previous years if the findings revealed that its income had escaped tax on account of the fraud in the company. According to the IT Act, the department can reopen assessment of Satyam for the assessment years 2002-03 to 2007-08 if its findings disclosed evasion of tax, he said.
One area that the department had focussed in detection of loss of income was whether any fictitious or inflated tax deduction at source (TDS) claims were made by Satyam Computers in previous years on non-existing fixed deposits. A suspicion about such claims was triggered by Satyam’s balance sheet on September 30 indicating a non-existent interest accrual of Rs. 374 crore from conjured up bank deposits.
Granted bail
A court on Friday granted bail to D. Gopalakrishnam Raju, general manager of SRSR Advisory Services, who was arrested in connection with the fraud. He was said to be a trusted man of former Satyam chairman B. Ramalinga Raju and was instrumental in the land deals. The Securities and Exchange Board of India concluded its three-day interrogation of Mr. Ramalinga Raju and his brother Rama Raju in jail. Two teams of SEBI questioned them separately following permission granted by the Supreme Court.
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
Insider A S Murty is new Satyam CEO
February 6, 2009
Ending the suspense surrounding the appointment of a chief executive officer (CEO) for the scam-tainted Satyam Computer Services, the government-nominated board today appointed A S Murty, a Satyam veteran of 15 years, for the top job with immediate effect.
The board, chaired by C Achuthan, also appointed Homi Khusrokhan — former managing director of Tata Chemicals — and Murugappa Group’s former director (finance) Partho S Datta as special advisors to the board to help in management and finance respectively.
"I have no misgivings about the enormity of the task in front of us, but together with my colleagues, I am confident we can accomplish the impossible. We will chart a precise and practical 30–60–90 day plan that will encompass and address the interests of all stakeholders," Murty (known as ASM) said.
The special advisors, along with Boston Consulting Group, will work pro bono and help the newly-named CEO and the board in defining priorities and executing them effectively, stated a company release.
"Having led large organisations before, I expect this opportunity to be a singularly enriching experience and I look forward to contributing my mite to this noble task," Khusrokhan said on his new role as the special advisor to Satyam.
Board member Deepak Parekh said, "In our interactions over the past few weeks, we are convinced that Satyam needs an internal leader to steer it at this critical juncture and ASM has the required bandwidth and support."
Earlier this month, in an interview to Business Standard, Minister of corporate affairs Prem Chand Gupta too had said: "I personally recommended that a CEO should be an insider... since it will take quite some time for a CEO from outside the company to take stock of a new business. And we do not have much time". He explained that the government also wanted a person for the top post who understood the client market closely and Satyam "does have many such good people".
But is this an interim measure? The CEO's name could have been announced earlier, say sources, but the new Satyam board was seriously mulling the buyout options that emerged with the interest of numerous suitors in the company.
The names include that of Larsen & Toubro and B K Modi-owned Spice group (both asking for management control), Mahindra & Mahindra, Hinduja group, Essar group (Aegis BPO), HCL Technologies, Tech Mahindra and iGate. Other unconfirmed names include that of Fijustu, Hitachi and IBM. However, most of these suitors are believed to have asked for time before they present a concrete proposal. Besides, they are also waiting for the Securities and Exchange Board of India (Sebi) to issue details about the relaxed norms in case of an open offer for Satyam-like cases.
Could the board have made this appointment sensing the urgency to restore investor and client confidence in the company? The reaction is mixed. An L&T has expressed an interest in management control, said the company does not want to comment on the new appointment, but B K Modi, Chairman, Spice Group, said in a telephonic call from Kuala Lumpur: "An insider has been named as the CEO as they did not have any choice. No CEO was willing to come from any other company, as there is no clarity or stability. The present board, is in an interim board, and has been appointed under the Company Law Broad. No CEO wants to join this board."
On the question whether Spice group continues to be interested in Satyam, Modi said: “Yes, we are still interested in Satyam. We are only seeking transparency, if the government decides to offload stake to private companies.”
Vineet Nayyar, vice chairman and managing director, Tech Mahindra, said it was "a very good step. This will bring stability to the company and create a sense of trust among the employees".
He added, however, that this "still does not solve the basic problem of Satyam and that is getting the books cleared, liabilities issue, and customer retention".
Aparup Sengupta, MD and CEO, Aegis, said: "We have expressed our desire to the board to acquire the BPO operations of Satyam Computer Services, but the board has not replied to us. I do not want to comment on the appointment as I do not know A S Murty. However, the advantage, will be that since he is from within he will have a knowledge about operations."
But problems persist: Lack of clarity on Satyam is already taking a toll on the company's stock, with the scrip falling the third consecutive day. Today's fall was almost 8 per cent down to close at Rs 46.25 on the Bombay Stock Exchange (BSE) after news that the National Australia Bank has decided to suspend new outsourcing contracts awarded to Satyam, a spokeswoman for Australia's largest lender told Reuters.
Satyam continued to work with NAB on existing engagements, she said. Last month, Satyam said US-based State Farm Automobile Insurance had terminated its outsourcing contract.
Ending the suspense surrounding the appointment of a chief executive officer (CEO) for the scam-tainted Satyam Computer Services, the government-nominated board today appointed A S Murty, a Satyam veteran of 15 years, for the top job with immediate effect.
The board, chaired by C Achuthan, also appointed Homi Khusrokhan — former managing director of Tata Chemicals — and Murugappa Group’s former director (finance) Partho S Datta as special advisors to the board to help in management and finance respectively.
"I have no misgivings about the enormity of the task in front of us, but together with my colleagues, I am confident we can accomplish the impossible. We will chart a precise and practical 30–60–90 day plan that will encompass and address the interests of all stakeholders," Murty (known as ASM) said.
The special advisors, along with Boston Consulting Group, will work pro bono and help the newly-named CEO and the board in defining priorities and executing them effectively, stated a company release.
"Having led large organisations before, I expect this opportunity to be a singularly enriching experience and I look forward to contributing my mite to this noble task," Khusrokhan said on his new role as the special advisor to Satyam.
Board member Deepak Parekh said, "In our interactions over the past few weeks, we are convinced that Satyam needs an internal leader to steer it at this critical juncture and ASM has the required bandwidth and support."
Earlier this month, in an interview to Business Standard, Minister of corporate affairs Prem Chand Gupta too had said: "I personally recommended that a CEO should be an insider... since it will take quite some time for a CEO from outside the company to take stock of a new business. And we do not have much time". He explained that the government also wanted a person for the top post who understood the client market closely and Satyam "does have many such good people".
But is this an interim measure? The CEO's name could have been announced earlier, say sources, but the new Satyam board was seriously mulling the buyout options that emerged with the interest of numerous suitors in the company.
The names include that of Larsen & Toubro and B K Modi-owned Spice group (both asking for management control), Mahindra & Mahindra, Hinduja group, Essar group (Aegis BPO), HCL Technologies, Tech Mahindra and iGate. Other unconfirmed names include that of Fijustu, Hitachi and IBM. However, most of these suitors are believed to have asked for time before they present a concrete proposal. Besides, they are also waiting for the Securities and Exchange Board of India (Sebi) to issue details about the relaxed norms in case of an open offer for Satyam-like cases.
Could the board have made this appointment sensing the urgency to restore investor and client confidence in the company? The reaction is mixed. An L&T has expressed an interest in management control, said the company does not want to comment on the new appointment, but B K Modi, Chairman, Spice Group, said in a telephonic call from Kuala Lumpur: "An insider has been named as the CEO as they did not have any choice. No CEO was willing to come from any other company, as there is no clarity or stability. The present board, is in an interim board, and has been appointed under the Company Law Broad. No CEO wants to join this board."
On the question whether Spice group continues to be interested in Satyam, Modi said: “Yes, we are still interested in Satyam. We are only seeking transparency, if the government decides to offload stake to private companies.”
Vineet Nayyar, vice chairman and managing director, Tech Mahindra, said it was "a very good step. This will bring stability to the company and create a sense of trust among the employees".
He added, however, that this "still does not solve the basic problem of Satyam and that is getting the books cleared, liabilities issue, and customer retention".
Aparup Sengupta, MD and CEO, Aegis, said: "We have expressed our desire to the board to acquire the BPO operations of Satyam Computer Services, but the board has not replied to us. I do not want to comment on the appointment as I do not know A S Murty. However, the advantage, will be that since he is from within he will have a knowledge about operations."
But problems persist: Lack of clarity on Satyam is already taking a toll on the company's stock, with the scrip falling the third consecutive day. Today's fall was almost 8 per cent down to close at Rs 46.25 on the Bombay Stock Exchange (BSE) after news that the National Australia Bank has decided to suspend new outsourcing contracts awarded to Satyam, a spokeswoman for Australia's largest lender told Reuters.
Satyam continued to work with NAB on existing engagements, she said. Last month, Satyam said US-based State Farm Automobile Insurance had terminated its outsourcing contract.
Wednesday, February 4, 2009
'Raju spent excessively to buy temporary happiness'
5 Feb 2009,
NEW DELHI: One thousand designer suits. 321 shoes. 310 belts. Properties spread over 63 countries. Bracelets, chains, rings and watches worth crores of rupees Ramalinga Raju had all this and much more. Now psychiatrists feel that the former Satyam computer boss' hoarding mania probably reflects a state of mind where he spent excessively to get temporary happiness.
In such a situation, the buying of a particular product becomes important, using it immaterial. For instance, Raju has many properties in different countries but lived in only one. "This kind of behaviour gives the buyer a false sense of control over life situations," says Sandeep Vohra, consultant psychiatrist, Delhi's Apollo hospital. Consultant psychiatrist Jitendra Nagpal too explains such behaviour as a strong need to be in control of life, irrespective of consequences.
Raju's extravagance has surprised many, as the disgraced IT czar is not typical Page 3. Vohra says that a degree of greed or ambition exists in varying degrees in different people of any profession. But such feelings are stronger among first-time achievers. "Raju perhaps falls in the category of those who associate happiness and success with material things and for this are willing to buy goods at any cost," he says.
According to Vohra, if one has an excess of anything that one cannot use then the act is abnormal. "It's a sort of disorder that shopaholics are prone to," he says.
Nagpal feels, at times, a persistent sense of insecurity stemming from a psychological or emotional loss during one's formative years manifests in certain behaviours in present life. Raju's tendency to hoard good things could be one of them.
Vohra, who attends to many cases of people who became depressed after failing to amass material wealth, maintains that Raju is a classic example for the present generation on what 'not' to follow as a yardstick for success because his aim was "materialistic success by hook or by crook".
No surprise, there is an sms joke doing the rounds: Raju Raju, yes papa. Cheating others? No papa. Telling lies? No papa. Open your balance sheet. Ha ha ha.
NEW DELHI: One thousand designer suits. 321 shoes. 310 belts. Properties spread over 63 countries. Bracelets, chains, rings and watches worth crores of rupees Ramalinga Raju had all this and much more. Now psychiatrists feel that the former Satyam computer boss' hoarding mania probably reflects a state of mind where he spent excessively to get temporary happiness.
In such a situation, the buying of a particular product becomes important, using it immaterial. For instance, Raju has many properties in different countries but lived in only one. "This kind of behaviour gives the buyer a false sense of control over life situations," says Sandeep Vohra, consultant psychiatrist, Delhi's Apollo hospital. Consultant psychiatrist Jitendra Nagpal too explains such behaviour as a strong need to be in control of life, irrespective of consequences.
Raju's extravagance has surprised many, as the disgraced IT czar is not typical Page 3. Vohra says that a degree of greed or ambition exists in varying degrees in different people of any profession. But such feelings are stronger among first-time achievers. "Raju perhaps falls in the category of those who associate happiness and success with material things and for this are willing to buy goods at any cost," he says.
According to Vohra, if one has an excess of anything that one cannot use then the act is abnormal. "It's a sort of disorder that shopaholics are prone to," he says.
Nagpal feels, at times, a persistent sense of insecurity stemming from a psychological or emotional loss during one's formative years manifests in certain behaviours in present life. Raju's tendency to hoard good things could be one of them.
Vohra, who attends to many cases of people who became depressed after failing to amass material wealth, maintains that Raju is a classic example for the present generation on what 'not' to follow as a yardstick for success because his aim was "materialistic success by hook or by crook".
No surprise, there is an sms joke doing the rounds: Raju Raju, yes papa. Cheating others? No papa. Telling lies? No papa. Open your balance sheet. Ha ha ha.
Monday, February 2, 2009
Satyamites seek 'Visa God' blessings
3 Feb 2009,
HYDERABAD: Distressed Satyamites turning to the gods for solace these days, are being extended exclusive benefits with “special timings” and “special prayers” at places of worship. And it’s ‘Visa God’ that the firm’s techies are thronging, seeking divine intervention.
The Chilkur Balaji Temple for instance has incorporated an exclusive prayer service held three times a week, between 6 am and 7 am, for Satyam employees and their families visiting the temple. During this one hour, just after the morning ‘archana’, the Lion God (Lord Laxshmi Nrusimha) is invoked to help resolve financial troubles, especially that of Satyamites.
The temple has also put in place a list of shlokas, particularly for Satyam employees or those praying for someone working in the firm, that they are made to chant as they complete 11 pradakshinams (rounds) of the temple.
“They are nine verses in all and are chanted 11 times. The verses are chanted to call upon the Lion God, who is said to be seated with the goddess of wealth, to tide over debts and hardships,” said Rangarajan Chilkur of the temple’s priest family. In turn though, Satyamites are made to promise a return visit to the temple and undertake 108 pradakshinams of the temple as soon as their troubles end.
In the past one month, the temple has had thousands of people attending early morning prayer service, on Fridays, Saturdays and Sundays.
HYDERABAD: Distressed Satyamites turning to the gods for solace these days, are being extended exclusive benefits with “special timings” and “special prayers” at places of worship. And it’s ‘Visa God’ that the firm’s techies are thronging, seeking divine intervention.
The Chilkur Balaji Temple for instance has incorporated an exclusive prayer service held three times a week, between 6 am and 7 am, for Satyam employees and their families visiting the temple. During this one hour, just after the morning ‘archana’, the Lion God (Lord Laxshmi Nrusimha) is invoked to help resolve financial troubles, especially that of Satyamites.
The temple has also put in place a list of shlokas, particularly for Satyam employees or those praying for someone working in the firm, that they are made to chant as they complete 11 pradakshinams (rounds) of the temple.
“They are nine verses in all and are chanted 11 times. The verses are chanted to call upon the Lion God, who is said to be seated with the goddess of wealth, to tide over debts and hardships,” said Rangarajan Chilkur of the temple’s priest family. In turn though, Satyamites are made to promise a return visit to the temple and undertake 108 pradakshinams of the temple as soon as their troubles end.
In the past one month, the temple has had thousands of people attending early morning prayer service, on Fridays, Saturdays and Sundays.
Sunday, February 1, 2009
Satyam impact: More cos come clean on 'loss zones'
2 Feb 2009,
MUMBAI: Call it the Satyam impact. The recent uproar over falsifying of accounts at the Hyderabad-based software major and the alleged role of the
company’s auditors in the whole affair has led many companies to be more upfront in disclosing loss-making financial transactions.
Also, with capital markets regulator, the Securities and Exchange Board of India (SEBI), finalising an auditors’ panel for peer review of audit reports of large companies, disclosures about various transactions seem to be gaining ground. SEBI has set a deadline of February 28 for the peer audit of Sensex and Nifty companies.
According to company finance heads, the current timing for disclosures of transactional losses is apt, as the economy is moving downwards and most companies have been reporting a fall in growth rates.
In the past two weeks, several large companies, including those that form part of the Sensex and Nifty, have declared third-quarter earnings which included losses from forex transactions, apart from losses on the operations front.
Some of the companies that mentioned transactional losses included heavyweights such as Ranbaxy, Tata group companies Tata Motors and Tata Power, carmaker Maruti Suzuki, JSW Steel and Suzlon Energy.
Pharmaceutical major Ranbaxy, which is currently owned by Daiichi Sankyo, reported a Rs 680-crore loss in the three months ended December 2008, compared with a profit of Rs 188 crore in the previous year. The losses included those from forex transactions, typical for the export-driven pharma industry, where companies hedge and mark-to-market the value of their forward contracts.
Losses due to foreign exchange fluctuations and fair valuation of derivatives stood at Rs 307 crore and Rs 784.30 crore, respectively. Ranbaxy said these were one-time losses due to new accounting standards.
More recently, last Friday, Tata Motors reported a net loss of Rs 263 crore, including a notional foreign exchange loss of Rs 226 crore due to “revaluation of forex borrowings, deposits and loans given.”
For Tata Power, another key member of the Tata fold, regulatory changes in accounting methods was vital for the fiscal third quarter. Last week, Tata Power said its net profit for the December quarter stood at Rs 101.08 crore, but also added that this profit couldn’t be compared as regulatory adjustments which used to be made on an annual basis in the fourth quarter are now being made on a provisional basis every quarter. “Had the changed accounting method been followed last year, the profit would have been lower for the third quarter FY08," Tata Power said.
Steel major JSW Steel also recorded a net loss of Rs 127.50 crore for the quarter ended December, saying it was on account of a forex loss of Rs 177 crore.
While it is mandatory, according to Accounting Standards 30 & 31, to disclose losses arising out of forex transactions and currency derivatives, CFOs and finance directors say it is also because companies are more watchful now. “Auditors have become more serious and are asking questions, asking confirmation of cash balances,” said one finance director who asked not to be named.
The trend is summed up aptly by Khozema Anajwalla, a partner at international accountants and business adviser firm KNAV: “"It's a given that a company's financial statements should always be true and fair, but for those companies, if this is not the case as yet, it’s better to be late than never.”
ET Bureau
MUMBAI: Call it the Satyam impact. The recent uproar over falsifying of accounts at the Hyderabad-based software major and the alleged role of the
company’s auditors in the whole affair has led many companies to be more upfront in disclosing loss-making financial transactions.
Also, with capital markets regulator, the Securities and Exchange Board of India (SEBI), finalising an auditors’ panel for peer review of audit reports of large companies, disclosures about various transactions seem to be gaining ground. SEBI has set a deadline of February 28 for the peer audit of Sensex and Nifty companies.
According to company finance heads, the current timing for disclosures of transactional losses is apt, as the economy is moving downwards and most companies have been reporting a fall in growth rates.
In the past two weeks, several large companies, including those that form part of the Sensex and Nifty, have declared third-quarter earnings which included losses from forex transactions, apart from losses on the operations front.
Some of the companies that mentioned transactional losses included heavyweights such as Ranbaxy, Tata group companies Tata Motors and Tata Power, carmaker Maruti Suzuki, JSW Steel and Suzlon Energy.
Pharmaceutical major Ranbaxy, which is currently owned by Daiichi Sankyo, reported a Rs 680-crore loss in the three months ended December 2008, compared with a profit of Rs 188 crore in the previous year. The losses included those from forex transactions, typical for the export-driven pharma industry, where companies hedge and mark-to-market the value of their forward contracts.
Losses due to foreign exchange fluctuations and fair valuation of derivatives stood at Rs 307 crore and Rs 784.30 crore, respectively. Ranbaxy said these were one-time losses due to new accounting standards.
More recently, last Friday, Tata Motors reported a net loss of Rs 263 crore, including a notional foreign exchange loss of Rs 226 crore due to “revaluation of forex borrowings, deposits and loans given.”
For Tata Power, another key member of the Tata fold, regulatory changes in accounting methods was vital for the fiscal third quarter. Last week, Tata Power said its net profit for the December quarter stood at Rs 101.08 crore, but also added that this profit couldn’t be compared as regulatory adjustments which used to be made on an annual basis in the fourth quarter are now being made on a provisional basis every quarter. “Had the changed accounting method been followed last year, the profit would have been lower for the third quarter FY08," Tata Power said.
Steel major JSW Steel also recorded a net loss of Rs 127.50 crore for the quarter ended December, saying it was on account of a forex loss of Rs 177 crore.
While it is mandatory, according to Accounting Standards 30 & 31, to disclose losses arising out of forex transactions and currency derivatives, CFOs and finance directors say it is also because companies are more watchful now. “Auditors have become more serious and are asking questions, asking confirmation of cash balances,” said one finance director who asked not to be named.
The trend is summed up aptly by Khozema Anajwalla, a partner at international accountants and business adviser firm KNAV: “"It's a given that a company's financial statements should always be true and fair, but for those companies, if this is not the case as yet, it’s better to be late than never.”
ET Bureau
Spice firms up plan for Satyam buy
Mumbai February 2, 2009
Firming up plans to acquire 51 per cent stake in scam-tainted Satyam Computer Services, industrialist B K Modi-controlled Spice Group is sending a team to start negotiations.
The team will meet Sebi officials on Monday and Satyam’s new board during the week to convey its intention to acquire the stake through an auction process.
Separately, the country’s largest diversified business group Hindujas has also expressed its intention to acquire controlling stake in the IT company.
"We have firmed up our plans to acquire a majority stake in Satyam and a team from the group will meet Sebi officials on Monday to discuss the issue. We will request the regulator to auction shares of the company and stress that the proceeds should be pumped back into the company’s operations," Spice Corporation Chairman B K Modi told Business Standard.
"We will seek an auction process. Apart from being transparent, it will also help in roping in the highest bidder," he added. The group was planning to acquire the stake through Spice Innovation, its New Delhi-based holding company, and was ready to shell around Rs 2,000 crore (around $400 million).
The team comprises top officials of the group and merchant bankers, even though Modi is not on the team. It will also meet the new board members, which is meeting on February 5 to finalise the new chief executive officer and chief financial officer, to discuss the acquisition.
"If Satyam needs to raise Rs 2,000 crore, the company should offload an equivalent amount of shares. This (the percentage of stake to be offloaded) has to decided by the company’s board," he added. Modi, however, did not comment on the basis of which the group will value the beleaguered IT company.
Meanwhile, a top official from Hindujas said that the group was interested in acquiring Satyam and has alerted its investment bankers. "We are waiting for some clarity on the issue, like what are the company's financials, including losses and debts. This will emerge only after the board meetings and we will put in a proper bid, once there is transparency in the whole issue," the official said.
Engineering and construction major Larsen&Toubro, Tech Mahindra and Essar (interested only in the BPO arm) are among the other suitors for Satyam.
Firming up plans to acquire 51 per cent stake in scam-tainted Satyam Computer Services, industrialist B K Modi-controlled Spice Group is sending a team to start negotiations.
The team will meet Sebi officials on Monday and Satyam’s new board during the week to convey its intention to acquire the stake through an auction process.
Separately, the country’s largest diversified business group Hindujas has also expressed its intention to acquire controlling stake in the IT company.
"We have firmed up our plans to acquire a majority stake in Satyam and a team from the group will meet Sebi officials on Monday to discuss the issue. We will request the regulator to auction shares of the company and stress that the proceeds should be pumped back into the company’s operations," Spice Corporation Chairman B K Modi told Business Standard.
"We will seek an auction process. Apart from being transparent, it will also help in roping in the highest bidder," he added. The group was planning to acquire the stake through Spice Innovation, its New Delhi-based holding company, and was ready to shell around Rs 2,000 crore (around $400 million).
The team comprises top officials of the group and merchant bankers, even though Modi is not on the team. It will also meet the new board members, which is meeting on February 5 to finalise the new chief executive officer and chief financial officer, to discuss the acquisition.
"If Satyam needs to raise Rs 2,000 crore, the company should offload an equivalent amount of shares. This (the percentage of stake to be offloaded) has to decided by the company’s board," he added. Modi, however, did not comment on the basis of which the group will value the beleaguered IT company.
Meanwhile, a top official from Hindujas said that the group was interested in acquiring Satyam and has alerted its investment bankers. "We are waiting for some clarity on the issue, like what are the company's financials, including losses and debts. This will emerge only after the board meetings and we will put in a proper bid, once there is transparency in the whole issue," the official said.
Engineering and construction major Larsen&Toubro, Tech Mahindra and Essar (interested only in the BPO arm) are among the other suitors for Satyam.
Friday, January 30, 2009
(L&T) kept its cards close to its chest
Engineering major Larsen & Toubro (L&T) kept its cards close to its chest on the issue of management control in beleaguered Satyam, saying it would go by the decision of the IT firm's board.
"What is going to happen on Satyam will be decided by the Satyam board. Our action will depend on what the board decides. They will decide how they go forward," L&T Board Member J P Nayak said amid reports that the engineering major has approached the Government on taking management control.
Nayak, however, said that the company has not written to the Government on this, nor has it asked for any advance ruling from SEBI on the issue of open offer.
"L&T has so far invested Rs 650-670 crore in the company for acquiring a 12 per cent stake," L&T Executive Vice-President (Finance) R Shankar Raman said.
Raman said L&T had acquired a four per cent stake in Satyam in three to four days before December 31.
The company has increased its stake in the Satyam to 12 per cent through open market operations in January.
It has been reported that Spice Corp of BK Modi is also interested in acquiring Satyam.
"What is going to happen on Satyam will be decided by the Satyam board. Our action will depend on what the board decides. They will decide how they go forward," L&T Board Member J P Nayak said amid reports that the engineering major has approached the Government on taking management control.
Nayak, however, said that the company has not written to the Government on this, nor has it asked for any advance ruling from SEBI on the issue of open offer.
"L&T has so far invested Rs 650-670 crore in the company for acquiring a 12 per cent stake," L&T Executive Vice-President (Finance) R Shankar Raman said.
Raman said L&T had acquired a four per cent stake in Satyam in three to four days before December 31.
The company has increased its stake in the Satyam to 12 per cent through open market operations in January.
It has been reported that Spice Corp of BK Modi is also interested in acquiring Satyam.
Govt cos, MNCs may help Satyam with $400-mn deals
31 Jan 2009,, ET Bureau
NEW DELHI: Satyam Computer Services may be poised to win large contracts worth around $400 million in revenues from some government-run entities and multi-national firms, giving the scandal-tainted firm a welcome breather at a time it is vulnerable to large-scale customer defections.
A top Satyam official, who asked not to be named, said the company was the front-runner for large contracts from the Indian Railways, BSNL, Vizag Steel Plant and the Indian Mint, as it was the lowest bidder.
The contracts from these entities are for tasks such as data management, information infrastructure management and deploying new applications. Rival bidders eyeing these contracts include IBM, Accenture, CSC, TCS, Infosys and Wipro.
Some of Satyam’s overseas clients are also likely to increase their engagement with it, the official said, listing a $100-million multi-year contract from a large global telecom company that is close to being finalised and additional work from a US-based technology company and a Swiss-based vending services company. The official declined to name the companies.
The news comes at a time some of Satyam’s customers have terminated contracts, after its future was called into question, following revelations of massive fraud by its founder and former chairman B Ramalinga Raju. However, Satyam officials say most of the company’s clients have been supportive, although some of them have put in place back-up plans.
One of Satyam’s biggest customers, General Electric, has said it will continue to work with the company, while Canadian conglomerate Bombardier and UK’s frozen food maker Birds Eye Iglo have also assured it that they will continue projects
.
“We have very good reaction from customers. They do not have issues with Satyam’s delivery capability or its employees. Satyam is a frontrunner for government contracts due to its better financial bid and on technical soundness. As far as global clients are concerned, their only worry is business continuity and we are assuring them on that front,” the official said.
Bombardier, which set up a Bombardier India Engineering Centre at Satyam in 2006 and ramped it up to 285 employees from 25 in two years, said in a letter to the company sent via the Indian High Commission in Ottawa: “Bombardier has always been satisfied with the work of Satyam associates. We look forward to maintaining our relationship with Satyam.”
Birds Eye Iglo, which had switched to Satyam from Capgemini in 2008, plans to continue using the Indian company for its supply chain management-related processes.
NEW DELHI: Satyam Computer Services may be poised to win large contracts worth around $400 million in revenues from some government-run entities and multi-national firms, giving the scandal-tainted firm a welcome breather at a time it is vulnerable to large-scale customer defections.
A top Satyam official, who asked not to be named, said the company was the front-runner for large contracts from the Indian Railways, BSNL, Vizag Steel Plant and the Indian Mint, as it was the lowest bidder.
The contracts from these entities are for tasks such as data management, information infrastructure management and deploying new applications. Rival bidders eyeing these contracts include IBM, Accenture, CSC, TCS, Infosys and Wipro.
Some of Satyam’s overseas clients are also likely to increase their engagement with it, the official said, listing a $100-million multi-year contract from a large global telecom company that is close to being finalised and additional work from a US-based technology company and a Swiss-based vending services company. The official declined to name the companies.
The news comes at a time some of Satyam’s customers have terminated contracts, after its future was called into question, following revelations of massive fraud by its founder and former chairman B Ramalinga Raju. However, Satyam officials say most of the company’s clients have been supportive, although some of them have put in place back-up plans.
One of Satyam’s biggest customers, General Electric, has said it will continue to work with the company, while Canadian conglomerate Bombardier and UK’s frozen food maker Birds Eye Iglo have also assured it that they will continue projects
.
“We have very good reaction from customers. They do not have issues with Satyam’s delivery capability or its employees. Satyam is a frontrunner for government contracts due to its better financial bid and on technical soundness. As far as global clients are concerned, their only worry is business continuity and we are assuring them on that front,” the official said.
Bombardier, which set up a Bombardier India Engineering Centre at Satyam in 2006 and ramped it up to 285 employees from 25 in two years, said in a letter to the company sent via the Indian High Commission in Ottawa: “Bombardier has always been satisfied with the work of Satyam associates. We look forward to maintaining our relationship with Satyam.”
Birds Eye Iglo, which had switched to Satyam from Capgemini in 2008, plans to continue using the Indian company for its supply chain management-related processes.
Wednesday, January 28, 2009
300 companies created to divert funds: Gupta
28 Jan 2009
NEW DELHI: The government said on Wednesday that Satyam Computer's disgraced founder Ramalinga Raju created a network of about 300 companies and diverted funds from one company to another in a complex but carefully planned process.
"There has been an issue of siphoning (off of) funds. This is what we have understood from the information we have received from (the) RoC, SFIO and various other agencies (probing the Satyam case)," Union minister of corporate affairs Prem Chand Gupta said in a TV interview.
Gupta said, "Our information is that there was a network of almost 300 companies and funds were diverted from one company to (another) and then to (a) third."
"So like this, it was a very complex process he had adopted," Gupta said, but added that "unless the investigation is complete we can't say what exactly happened".
Asked if it meant a carefully planned process to avoid detection, Gupta said, "...Well, to some extent I would agree with you that it was a carefully planned operation, but ... still what we personally feel it was a complex process."
Asked if other people might also be involved in the scam, Gupta said, "I feel there are other people involved ..."
"But if you go into the systematic inspection and investigation of the structure of the company, you come to the conclusion that the whole thing (revolves) around the Raju family only."
On the employee count, Gupta said there were reports that 10,000 ghost employees have been identified but the issue is being looked into by those specially appointed CA firms, KPMG and Deloitte.
"They are looking into this and I think the fact would come before all of us... It is difficult to verify because Satyam has operations in more than 50 places..."
If there are fake employees, no salary will be paid against their names, the minister said
NEW DELHI: The government said on Wednesday that Satyam Computer's disgraced founder Ramalinga Raju created a network of about 300 companies and diverted funds from one company to another in a complex but carefully planned process.
"There has been an issue of siphoning (off of) funds. This is what we have understood from the information we have received from (the) RoC, SFIO and various other agencies (probing the Satyam case)," Union minister of corporate affairs Prem Chand Gupta said in a TV interview.
Gupta said, "Our information is that there was a network of almost 300 companies and funds were diverted from one company to (another) and then to (a) third."
"So like this, it was a very complex process he had adopted," Gupta said, but added that "unless the investigation is complete we can't say what exactly happened".
Asked if it meant a carefully planned process to avoid detection, Gupta said, "...Well, to some extent I would agree with you that it was a carefully planned operation, but ... still what we personally feel it was a complex process."
Asked if other people might also be involved in the scam, Gupta said, "I feel there are other people involved ..."
"But if you go into the systematic inspection and investigation of the structure of the company, you come to the conclusion that the whole thing (revolves) around the Raju family only."
On the employee count, Gupta said there were reports that 10,000 ghost employees have been identified but the issue is being looked into by those specially appointed CA firms, KPMG and Deloitte.
"They are looking into this and I think the fact would come before all of us... It is difficult to verify because Satyam has operations in more than 50 places..."
If there are fake employees, no salary will be paid against their names, the minister said
Saturday, January 24, 2009
Satyam Computer's HR dept starts employee verification
24 Jan 2009, PTI
HYDERABAD: The human resources department of Satyam Computer Services has started verification to ascertain the company's headcount, following the Andhra Pradesh CID's claim that there were 13,000 ghost employees on the rolls of the IT firm.
"Our HR department is now verifying the employee details," the company's spokesperson told media on saturday.
"As of now, we believe there are 53,000 employees, which is subject to verification and auditing," a Satyam spokesperson told media yesterday, adding "the board has confirmed that prima facie there appears to be no basis to doubt the same."
The Andhra Pradesh CID had told the local court that Satyam's founder B Ramalinga Raju had admitted that the number of employees was inflated by over 12,000, by which he (Raju) drew over Rs 20 crore a month towards staff cost.
Ramalinga Raju's lawyer Bharat Kumar said the police claim is wrong.
According to a Satyam official, the line managers have been asked to provide details of the employees directly reporting to them.
The HR department's verification is based on active e-mail IDs and access card data captured across the offices of Satyam.
The company was supposed to have had 53,000 employees and operated in 66 countries with a customer base of 185 Fortune 500 companies.
HYDERABAD: The human resources department of Satyam Computer Services has started verification to ascertain the company's headcount, following the Andhra Pradesh CID's claim that there were 13,000 ghost employees on the rolls of the IT firm.
"Our HR department is now verifying the employee details," the company's spokesperson told media on saturday.
"As of now, we believe there are 53,000 employees, which is subject to verification and auditing," a Satyam spokesperson told media yesterday, adding "the board has confirmed that prima facie there appears to be no basis to doubt the same."
The Andhra Pradesh CID had told the local court that Satyam's founder B Ramalinga Raju had admitted that the number of employees was inflated by over 12,000, by which he (Raju) drew over Rs 20 crore a month towards staff cost.
Ramalinga Raju's lawyer Bharat Kumar said the police claim is wrong.
According to a Satyam official, the line managers have been asked to provide details of the employees directly reporting to them.
The HR department's verification is based on active e-mail IDs and access card data captured across the offices of Satyam.
The company was supposed to have had 53,000 employees and operated in 66 countries with a customer base of 185 Fortune 500 companies.
Friday, January 23, 2009
Satyam Raju bought lands abroad as well: Prosecution
Hyderabad : Disgraced Satyam Computer Services founder B. Ramalinga Raju bought lands not only in India but in other countries also, prosecutors told a court here Friday.
The court deferred hearing on the bail pleas of Raju and Satyam's former chief financial officer Vadlamani Srinivas to Jan 27 and that of Raju's brother B. Rama Raju, who was the fraud-hit company's managing director to Jan 28.
Lawyers for Andhra Pradesh police crime investigation department (CID) said information about Ramalinga Raju buying lands in foreign countries was given by Gopalakrishna Raju, former general manager of SRSR Advisory Services, floated by the Raju family.
Gopalakrishna Raju has also been arrested. Ramalinga Raju set up SRSR to manage his family stake in Satyam Computer Services.
The court was also informed that BNP Paribas, one of the bankers for Satyam, had told the CID that it did not have any Fixed Deposits of Satyam.
"There has been no transaction with the bank since March 31, 2004," the prosecutors quoted BNP as having informed CID.
They opposed granting bail to the Raju brothers and Srinivas as, they feared, they might tamper with evidence.
"The crime is not an ordinary one. It can attract life imprisonment," the prosecutors submitted.
The court deferred hearing on the bail pleas of Raju and Satyam's former chief financial officer Vadlamani Srinivas to Jan 27 and that of Raju's brother B. Rama Raju, who was the fraud-hit company's managing director to Jan 28.
Lawyers for Andhra Pradesh police crime investigation department (CID) said information about Ramalinga Raju buying lands in foreign countries was given by Gopalakrishna Raju, former general manager of SRSR Advisory Services, floated by the Raju family.
Gopalakrishna Raju has also been arrested. Ramalinga Raju set up SRSR to manage his family stake in Satyam Computer Services.
The court was also informed that BNP Paribas, one of the bankers for Satyam, had told the CID that it did not have any Fixed Deposits of Satyam.
"There has been no transaction with the bank since March 31, 2004," the prosecutors quoted BNP as having informed CID.
They opposed granting bail to the Raju brothers and Srinivas as, they feared, they might tamper with evidence.
"The crime is not an ordinary one. It can attract life imprisonment," the prosecutors submitted.
Wednesday, January 21, 2009
Andhra chief minister says Maytas is being probed by CID
21 Jan 2009
HYDERABAD: Andhra Pradesh Chief Minister Y S Rajasekhara Reddy has said the state Crime Investigation Department is probing the affair of Maytas Infra, the firm promoted by the family of Satyam Computer former chairman B Ramalinga Raju.
"How can Maytas escape investigation when there are allegations that funds from Satyam got diverted to Maytas," the Chief Minister questioned at a press conference here on Tuesday.
He said "one probe leads to the other", pointing to the CID investigations into the Satyam scandal.
Referring to the various infrastructure projects being executed by Maytas and its joint venture partners in the state, the Chief Minister said: "If we have genuine doubt about their capabilities, we will look at alternatives. If work can go without any problem, we will continue. We will only see that there is no risk to the government."
He said officials of the irrigation department have been directed to "thoroughly and closely" monitor the projects being executed by Maytas. The bank guarantees provided by Maytas are also being verified, he added.
Replying to a question, the Chief Minister said Satyam Computer had been allotted 50 acres near Visakhapatnam for an IT Park only in accordance with the industrial policy of the state government.
"Satyam is a prestigious company. It's only the management that has defrauded the company and the shareholders," Rajasekhara Reddy pointed out.
He, however, did not specify whether the government would cancel the land allocation.
HYDERABAD: Andhra Pradesh Chief Minister Y S Rajasekhara Reddy has said the state Crime Investigation Department is probing the affair of Maytas Infra, the firm promoted by the family of Satyam Computer former chairman B Ramalinga Raju.
"How can Maytas escape investigation when there are allegations that funds from Satyam got diverted to Maytas," the Chief Minister questioned at a press conference here on Tuesday.
He said "one probe leads to the other", pointing to the CID investigations into the Satyam scandal.
Referring to the various infrastructure projects being executed by Maytas and its joint venture partners in the state, the Chief Minister said: "If we have genuine doubt about their capabilities, we will look at alternatives. If work can go without any problem, we will continue. We will only see that there is no risk to the government."
He said officials of the irrigation department have been directed to "thoroughly and closely" monitor the projects being executed by Maytas. The bank guarantees provided by Maytas are also being verified, he added.
Replying to a question, the Chief Minister said Satyam Computer had been allotted 50 acres near Visakhapatnam for an IT Park only in accordance with the industrial policy of the state government.
"Satyam is a prestigious company. It's only the management that has defrauded the company and the shareholders," Rajasekhara Reddy pointed out.
He, however, did not specify whether the government would cancel the land allocation.
Satyam case: City lawyer files complaint against Raju, others
21 Jan 2009
MUMBAI: A city-based lawyer has filed a complaint before a magistrate here seeking legal action against former Satyam Chairman B R Raju, the former board of directors of the company and senior officials of accounting firm PriceWaterhouse Coopers (PwC) for "cheating investors" by manipulating accounts of the IT major.
The complainant has said that he had bought 500 shares of Satyam about three weeks prior to Raju admitting to manipulation in company accounts for showing higher profits, following which Satyam's share value dropped drastically.
The complaint has been filed against 32 individuals before the Chief Metropolitan Magistrate at Esplanade court here including senior officials of PwC and former directors on the board of Satyam.
Action should be initiated against the accused under relevant sections of the IPC for cheating investors, C Anthony Lewis, the complainant said.
"The complaint has been filed since I do not believe that the Hyderabad police version that only three persons are responsible for carrying out this corporate fraud. The others involved should also be brought to book," he said.
The complainant has also said that he did not have faith in the Mumbai police, which is also looking into two applications for complaints filed by investor forums against the IT firm, because of which he had approached the court.
The court, after hearing arguments, has kept the matter for orders on January 28.
MUMBAI: A city-based lawyer has filed a complaint before a magistrate here seeking legal action against former Satyam Chairman B R Raju, the former board of directors of the company and senior officials of accounting firm PriceWaterhouse Coopers (PwC) for "cheating investors" by manipulating accounts of the IT major.
The complainant has said that he had bought 500 shares of Satyam about three weeks prior to Raju admitting to manipulation in company accounts for showing higher profits, following which Satyam's share value dropped drastically.
The complaint has been filed against 32 individuals before the Chief Metropolitan Magistrate at Esplanade court here including senior officials of PwC and former directors on the board of Satyam.
Action should be initiated against the accused under relevant sections of the IPC for cheating investors, C Anthony Lewis, the complainant said.
"The complaint has been filed since I do not believe that the Hyderabad police version that only three persons are responsible for carrying out this corporate fraud. The others involved should also be brought to book," he said.
The complainant has also said that he did not have faith in the Mumbai police, which is also looking into two applications for complaints filed by investor forums against the IT firm, because of which he had approached the court.
The court, after hearing arguments, has kept the matter for orders on January 28.
Tuesday, January 20, 2009
Suitors queue up for Satyam
New Delhi, Jan. 20 The beleaguered IT company, Satyam Computer Services has been approached by “potential buyers”, both MNC and Indian, according to its newly appointed board member Mr Tarun Das.
“We have been approached by both MNCs and Indian IT companies,” Mr Das told mediapersons here. Asked if the top-rung IT companies too were in the race to acquire the Hyderabad-based service provider, Mr Das said “no”.
One such suitor, Essar group company Aegis BPO, has already submitted an Expression of Interest (EoI), for taking over the BPO business of the crisis-ridden Satyam, which has been tottering under Rs 7,000-crore financial fraud authored by its disgraced promoter Mr Ramalinga Raju.
When contacted, Aegis BPO’s Chief Executive Officer, Mr Aparup Sengupta, confirmed that the company had put in an EoI last week to expand the footprint of its BPO business but declined to comment on specifics.
However, sources pointed out that Aegis had only submitted an EoI, and not an ‘offer’. “In any company, there are a set of clients who are being served by professionals. It makes economic sense if this (operation) comes to Aegis. However, Aegis BPO is yet to hear from the Satyam board,” sources said adding that “an offer can only be made after gaining access and doing a thorough due diligence of the BPO operations.” They also said it was too early to talk valuation but noted that the deal could be funded by “internal resources”.
In August last year, Aegis BPO had decided to buy the Nasdaq-listed off-shoring firm PeopleSupport Inc for $250 million (Rs 1,057 crore), marking its eleventh acquisition over the last four years. Aegis, which is currently on a $450- million revenue run-rate, employs 30,000 professionals spread across India, the Philippines, the US, Costa Rica and Africa. The company’s BPO business spans domains such as telecom, banking, financial services, insurance and healthcare.
Satyam BPO, on the other hand, has 3,500-odd employees and counts marquee names such as Verizon and GlaxoSmithKline as its clientele.
L&T stake
Even as the buzz around the suitors lining up for Satyam gets louder, Larsen and Toubro’s chief, Mr A.M. Naik, on Tuesday met the Corporate Affairs Secretary, Mr Anurag Goel, and is learnt to have discussed the company’s stake in Satyam. Sources said L&T – which holds about four per cent stake in Satyam – is worried about its stake and is looking to safeguard its interests.
Board meeting
The much-awaited board meeting of Satyam has now been advanced by a day to Thursday and the venue too has been shifted to Hyderabad from Mumbai.
“The board meeting is likely to be spread over two days,” a Satyam board member said.
The six-member board is expected to discuss the critical issue of CEO and CFO appointments, and issues relating to cash requirements including salaries and outstanding dues (estimated at nearly Rs 800 crore for January).
Among the immediate concerns for Satyam is the possible flight of customers.
Leading Indian IT companies, including Infosys and TCS, have stated that they have been approached by Satyam’s clients for taking over projects.
However, some clients including GE and Malaysia Airlines seem to be holding on for now.
“GE continues to use Satyam Computer Services for services. We have not moved any work,” a GE spokesperson said.
The Malaysia Airlines General Manager, Transition Management, Mr En Salleh Tabrani, said, “Satyam provides Malaysia Airlines with onsite professional services. We have been in discussions with Satyam and have been advised that the services will continue as usual. At the same time, we are also looking at options should there be any disruption to the services provided.”
“We have been approached by both MNCs and Indian IT companies,” Mr Das told mediapersons here. Asked if the top-rung IT companies too were in the race to acquire the Hyderabad-based service provider, Mr Das said “no”.
One such suitor, Essar group company Aegis BPO, has already submitted an Expression of Interest (EoI), for taking over the BPO business of the crisis-ridden Satyam, which has been tottering under Rs 7,000-crore financial fraud authored by its disgraced promoter Mr Ramalinga Raju.
When contacted, Aegis BPO’s Chief Executive Officer, Mr Aparup Sengupta, confirmed that the company had put in an EoI last week to expand the footprint of its BPO business but declined to comment on specifics.
However, sources pointed out that Aegis had only submitted an EoI, and not an ‘offer’. “In any company, there are a set of clients who are being served by professionals. It makes economic sense if this (operation) comes to Aegis. However, Aegis BPO is yet to hear from the Satyam board,” sources said adding that “an offer can only be made after gaining access and doing a thorough due diligence of the BPO operations.” They also said it was too early to talk valuation but noted that the deal could be funded by “internal resources”.
In August last year, Aegis BPO had decided to buy the Nasdaq-listed off-shoring firm PeopleSupport Inc for $250 million (Rs 1,057 crore), marking its eleventh acquisition over the last four years. Aegis, which is currently on a $450- million revenue run-rate, employs 30,000 professionals spread across India, the Philippines, the US, Costa Rica and Africa. The company’s BPO business spans domains such as telecom, banking, financial services, insurance and healthcare.
Satyam BPO, on the other hand, has 3,500-odd employees and counts marquee names such as Verizon and GlaxoSmithKline as its clientele.
L&T stake
Even as the buzz around the suitors lining up for Satyam gets louder, Larsen and Toubro’s chief, Mr A.M. Naik, on Tuesday met the Corporate Affairs Secretary, Mr Anurag Goel, and is learnt to have discussed the company’s stake in Satyam. Sources said L&T – which holds about four per cent stake in Satyam – is worried about its stake and is looking to safeguard its interests.
Board meeting
The much-awaited board meeting of Satyam has now been advanced by a day to Thursday and the venue too has been shifted to Hyderabad from Mumbai.
“The board meeting is likely to be spread over two days,” a Satyam board member said.
The six-member board is expected to discuss the critical issue of CEO and CFO appointments, and issues relating to cash requirements including salaries and outstanding dues (estimated at nearly Rs 800 crore for January).
Among the immediate concerns for Satyam is the possible flight of customers.
Leading Indian IT companies, including Infosys and TCS, have stated that they have been approached by Satyam’s clients for taking over projects.
However, some clients including GE and Malaysia Airlines seem to be holding on for now.
“GE continues to use Satyam Computer Services for services. We have not moved any work,” a GE spokesperson said.
The Malaysia Airlines General Manager, Transition Management, Mr En Salleh Tabrani, said, “Satyam provides Malaysia Airlines with onsite professional services. We have been in discussions with Satyam and have been advised that the services will continue as usual. At the same time, we are also looking at options should there be any disruption to the services provided.”
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