Satyam board meeting ends without statement

Satyam board meeting ends without statement
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First Published: Thu, Feb 26 2009. 07 15 PM IST
Updated: Thu, Feb 26 2009. 07 15 PM IST
Bangalore: Distressed IT firm Satyam Computer Services said on Thursday it would not issue a statement after a board meeting that was expected to firm up a plan to bring a strategic investor into the fraud-hit outsourcing firm.
Satyam, hit by country’s biggest corporate scandal, had been expected to outline terms and conditions for a preferential share issue, with the chairman saying on Tuesday the company hoped to invite expressions of interest from potential bidders by the end of the week.
A Satyam spokesman said the company had decided not to issue a statement after the meeting, breaking with recent practice, and declined to comment on what the government-appointed board had discussed or decided.
“Once we have something to report, we will revert,” the spokesman said.
After the previous board meeting on Saturday, Satyam had said it would seek regulatory approval this week for its plan to bring in an investor, and would announce the details once it was approved.
Statements had been issued after the previous seven meetings of the board, which was installed last month to rescue Satyam after its founder chairman Ramalinga Raju had quit on 7 January saying profits had been overstated for years and assets falsified.
New chairman Kiran Karnik could not be contacted for comment.
Analysts say potential bidders for Satyam are attracted by its marquee clients, business model and a trained workforce, but putting a price for the company could be difficult in the absence of audited accounts and clarity about its liabilities.
“They could take a potential leap of faith here,” said Sachin Jain, Jefferies & Co’s equity research analyst. “Apart from their inability to do a due diligence regarding the financials, there are couple of other issues like lawsuits from investors.”
The Economic Times newspaper said on Thursday the board was likely to insist on experience in the information technology sector and minimum net worth for potential bidders, quoting a person familiar with the situation.
Potential suitors for Satyam include India’s top engineering and construction firm Larsen & Toubro, Hinduja Group and Spice Group.
The board is being advised by Goldman Sachs and Indian investment bank Avendus Advisors in its search for a strategic investor.
In a statement to the stock exchange, Satyam said fund manager Fidelity had raised its stake in the firm by 0.45% to 8.89%. FMR LLC and FIL Ltd, the parent companies of Fidelity, purchased 3 million shares on 9 February.
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First Published: Thu, Feb 26 2009. 07 15 PM IST