New Delhi / Mumbai: The B.K. Modi-controlled Spice Corp. Ltd said on Friday it would invest in Satyam Computer Services Ltd only if a controlling stake of the scam-hit software firm is put up on the block.
“The board discussed the CLB (Company Law Board) order on Satyam Computer and has decided that if they (Satyam) give 51% stake in the company, we will go ahead with the bidding,” Spice Corp. chairman Modi said. CLB on Thursday approved Satyam’s plan to increase its capital in order to sell at least 26% to a strategic investor via preferential allotment of shares.
Engineering firm Larsen and Toubro Ltd, which already owns 12% stake in the firm, said its board will evaluate CLB’s order before deciding on whether to increase stake in the company.
Meanwhile, the government on Friday ruled out compensation to investors or firms hit by the fraud. “The government has no plan to provide financial assistance to the investors or the companies involved,” corporate affairs minister Prem Chand Gupta told the Lok Sabha in a written reply.
Satyam founder B. Ramalinga Raju on 7 January resigned as chairman, confessing to having cooked accounts to the tune of Rs7,136 crore over several years. Raju, his brother and former managing director B. Rama Raju and former chief financial officer Srinivas Vadlamani have been arrested. Two auditors of Price Waterhouse, S. Gopalakrishnan and Srinivas Talluri, have also been arrested. Price Waterhouse, a unit of PricewaterhouseCoopers, audited Satyam’s accounts for several years.
The Central Bureau of Investigation on Friday registered a case against Raju and others accused in the swindle, and said it has formed a multidisciplinary team to complete its probe.
The Serious Fraud Investigation Office (SFIO), an agency of the ministry of corporate affairs, also said on Friday it has found serious irregularities in land deals of entities linked with Satyam and companies promoted by the Raju family.
“(The) probe so far shows how these companies had understated their land sale prices on the books. The SFIO has details that companies sold land for 20-30 times higher than the prices shown,” a senior ministry official said on condition of anonymity.
Satyam’s shares dropped to Rs45.45, down 1.73%, on the Bombay Stock Exchange on a day its benchmark Sensex index index fell 2.21% to 8,843 points.
Bloomberg and Reuters contributed to this story.