Bangalore: A potential bidder for India’s fraud-tainted Satyam Computer Services backed away from a deal on Friday, as one of the members of the new board was appointed as the chairman of the outsourcing company.
The union government said Kiran Karnik, former president of software industry body Nasscom, would assume the role of Satyam chairman, a day after the outsourcing firm named a new chief executive and secured funding to help retain clients and employees.
Karnik is one of the six-man Satyam board, constituted by the government in the wake of the massive accounting fraud at the company.
Separately, US-based iGate Corp said it now has no interest in buying Satyam due to lack of clarity on liabilities of the company -- snared in India’s biggest corporate scandal -- chief executive Phaneesh Murthy told Reuters on Friday.
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“I have very little interest or no interest left in this company right now,” said Murthy, who was previously the global sales chief at rival Infosys Technologies and spearheaded strong sales growth in the key US market.
Satyam has been battling for survival after founder and former chairman Ramalinga Raju disclosed last month profits had been overstated for years. Raju is in jail pending trial.
A team from the market regulator Securities and Exchange Board of India has finished questioning Raju and Rama Raju, the founder’s brother and Satyam’s former managing director, in connection with the fraud, a regulator official said.
The Supreme Court had granted the regulator permission to question the Raju brothers.
“My interest has progressively been coming down with every passing day. And my concern is that the restatement of financial statements will take anywhere from three to six months,” iGate’s Murthy told Reuters from Fremont, California.
iGate said last month it was keen to acquire Satyam, helped by private equity funds, joining other potential bidders including Larsen and Toubro, attracted by Satyam’s global clients.
Analysts said it is unlikely that a bidding process will be set until there is clarity on changes to India’s takeover rules and a restatement of Satyam’s accounts.
“The key is how fast the company gets the things sorted out, because as time passes the interest of potential buyers will keep coming down,” said Tejas Doshi, head of research at Sushil Finance.