Satyam board says company on way to resurrection

MUMBAI - It was with a sense of satisfaction and achievement that the six-member board of Satyam Computer Services Monday announced the virtual ‘rebirth’ of the crisis-ridden software giant, hoping its future would now be sound and secure.

At a hurriedly convened press conference after Tech Mahindra agreed to pick up a 31 percent stake in Satyam for Rs.1,756 crore (Rs.17.56 billion/$351 million) at Rs.58 per share, the board members appeared relaxed.

‘In some sense Satyam has been reborn. It was driven off-course and we as a board have tried to bring it back on course,’ said Kiran Karnik, chairman of Satyam’s board and former president of the National Association of Software and Services Companies (NASSCOM).

The saga, which began after the company’s co-founder and chairman B. Ramalinga Raju admitted to a Rs.78-billion ($1.5-billion) fraud, left its employees and corporate India dumbstruck, and the government and the regulator scurrying to ensure the company did not hurtle towards insolvency.

Engineering major Larsen and Toubro (L&T) and consortium of Wilbur Ross-Cognizant were the other two bidders, with the B.K. Modi-owned Spice group having withdrawn from the bidding process earlier.

While L&T bid at Rs.45.90 per share, Wilbur Ross’s bid was much lower at Rs.20 per share.

Tech Mahindra will buy into Satyam through its subsidiary Venturbay Consultants, and in pursuant of the share subscription agreement signed will make an open offer of 20 percent at Rs.58 per share for the controlling stake of 51 percent.