Satyam Board Meets, Decision Under Wraps

Thursday, February 26, 2009

satyamscamHYDERABAD - The government-appointed directors of Satyam Computers met here Thursday but did not issue a statement on their discussions and decisions, a practice they had followed after their last seven meetings in as many weeks.

‘The board meeting has ended. There will be no statement,’ a Satyam spokesperson told IANS.

‘We are not privy to the discussions and hence cannot say what topics came up at the meeting,’ the official said.

The eighth meeting of the board, appointed by the central government Jan 10 three days after the disgraced founder B. Ramalinga Raju confessed to a Rs.70 billion (Rs.7,000-crore) accounting fraud, was expected to finalise the process it has worked out to invite a strategic investor to run the cash-strapped software exporter.

The board has been waiting for regulatory approval for the process before making it public.

The process was approved at its last meeting here Feb 21.

Board chairperson Kiran Karnik was not available for his comment on Thursday’s meeting. The corporate affairs ministry too declined to talk about what the board discussed.

It is not clear whether the board has received the regulatory approval for the process to invite the potential strategic investors or still waiting for it.

The company, rocked by the country’s biggest financial fraud, has told its employees that it would take another six to eight weeks to know who will be the strategic investor.

The board came as Satyam informed the National Stock Exchange that foreign institutional investor Fidelity had increased its stake in the company to 8.89 percent by buying three million shares in the open market.

The Fidelity Management and Research LLC (FMR LLC) and its various arms have purchased three million shares representing 0.45 percent stake in the company, Satyam said, adding with this the FII holds 59 million shares or 8.89 percent stake in the company.

In a related development, Larsen and Toubro (L&T), which too has upped its stake in Satyam to 12 percent after Raju confessed to the scam, has said it had no intention of selling its holding in the company.

Considered to be among the potential strategic investor, L&T has said it is waiting for Satyam’s new board to make public the procedure it has adopted to invite expression of interest from investors/buyers.

Satyam’s new board has been trying to come up with a clear financial picture of the company, without which finding a financial sound bidder would be difficult.

The company’s employees were told Tuesday that the ‘unusual situation where Satyam’s financial accounts are in question, on account of admission of falsification (by Ramalinga Raju), has its complexities in arranging the induction of the new investor’.

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