Hyderabad: Software services provider Satyam Computer Services Ltd’s government-constituted board is working on a “war footing” to find a strategic investor through an international bidding process that will be completed within a few weeks, corporate affairs minister Prem Chand Gupta said on Sunday.
“The board will find a strategic investor for Satyam through an international competitive bidding within the next few weeks, where anybody from any part of the globe can participate,” the minister told reporters during a visit to Hyderabad, where Satyam is based.
Thinking positive: Corporate affairs minister P.C. Gupta said on Sunday that he was confident SFIO would complete its Satyam probe in time. AP
Satyam’s board met last week to consider bid procedures, terms and conditions, but didn’t publicly lay out a road map for the sale of new shares to a strategic investor. The company is at the centre of India’s biggest corporate fraud investigation after founder B. Ramalinga Raju on 7 January confessed that he had doctored its accounts to the tune of Rs7,136 crore.
The board, together with investment banks Goldman Sachs and Avendus Capital Ltd, is “still working on the terms and conditions for the bid process”, said Gupta, who in Hyderabad laid the cornerstone for Corporate Bhavan, which will house offices of the Registrar of Companies, the official liquidator and a bench of the National Corporate Law Tribunal.
Satyam’s board “would take up the entire process in a most transparent and competitive manner without any favour or disfavour to any bidder”, the minister said. The board has to decide the base price for competitive bidding and size of the preferential offer of shares to be made to prospective investors, among other things.
The induction of a strategic investor would help infuse much-needed funds into Satyam, whose accounts are being reaudited as the fraud investigation proceeds. Raju, his brother and former managing director B. Rama Raju and former chief financial officer Srinivas Vadlamani are being held in a Hyderabad jail.
India’s largest engineering and construction firm Larsen and Toubro Ltd (L&T), which has already acquired a 12% stake in Satyam through market purchases, B.K. Modi-promoted Spice Group, the UK-based Hinduja Group and Tech Mahindra, a unit of the Mahindra group, have shown varying degrees of interest in acquiring Satyam.
Modi warned on Sunday that Satyam would face liquidation if the government-appointed board did not speed up the process of selling a stake. He told PTI from the US that talks on fixing a reserve price for the sale amounted to delaying tactics, adding that Satyam’s clients could start deserting it if a resolution wasn’t found soon.
“We are also talking to clients in the USA and in other parts of the world like Malaysia... Most of them are concerned about the future of the company. They have indicated that they will wait till March this year and then decide on whether to remain with Satyam or not,” he said.
Multiple agencies are probing the fraud, including the Central Bureau of Investigation, Securities and Exchange Board of India, Registrar of Companies, the income-tax department, the Enforcement Directorate and the Serious Fraud Investigation Office, or SFIO.
“The government wants the investigation into the fraud to be fast to reach logical conclusion so as to punish the guilty under the law,” minister Gupta said.
On whether SFIO would complete its probe within the stipulated three months, the minister said the agency had to scrutinize an enormous amount of documentation related to the scam. Still, he said he was confident of SFIO meeting its deadline.
“It has not asked for extension of time over and above three months so far,” he said.
Auditors KPMG and Deloitte Touche Tohmatsu are studying Satyam’s accounts to find out the state of its finances.
“The auditors are working day and night on the process of restatement of accounts of Satyam and lot of work is still to be completed,” Gupta said.
PTI contributed to this story.