Satyam awaits official nod to rope in strategic investorFebruary 25th, 2009 - 8:58 pm ICT by IANS
Hyderabad, Feb 25 (IANS) The government-appointed directors of Satyam Computer Services are set to meet here Thursday amid indication they are yet to receive the official go ahead for the process to be adopted to get a strategic investor to keep the cash-starved IT major afloat.
A clear picture on who the strategic investor would be would emerge in six to eight weeks, the embattled company told its employees ahead of the board meeting.
The six directors had said after their last meeting Feb 21 that they have approved the process to be followed for inviting a strategic investor and would announce the details after receiving regulatory approval for it.
“The board today (Saturday) approved the process to be followed for inviting a strategic investor and decided to seek regulatory approvals early next week. Upon receiving these clearances, the board would announce the process to be observed,” Deepak Parekh, one of the directors, said after the Feb 21 meeting.
Satyam informed its employees Tuesday that the strategic investor would be known in the next six to eight weeks.
“It is likely that the answer to who the strategic investor is and further details surrounding this will emerge from a competitive, fair and transparent method in six to eight weeks,” the company said in statement on its website.
To assuage the feelings of the around 50,000 employees over the time being taken to find a way to put the country’s fourth largest software outsourcer on track, the statement said: “The intent is to progress in a swift manner but the intricacies of diligence and the need for confidentiality with bidders will need due consideration and time”.
It said the board was exploring all options for inviting a strategic investor “who has strong reputation, financial capability and sufficient funds. Guidelines and procedures have been discussed by the board and steps to apply for the regulator for approvals are in advanced stage,” it added.
The statement indicated that arriving at a correct picture of Satyam’s finances, following the accounting fraud of Rs.70 billion by its disgraced founder B. Ramalinga Raju, has been delaying the exercise to get a strategic investor.
“The unusual situation where Satyam’s financial accounts are in question, on account of admission of falsification (by Ramalinga Raju), has its complexities in arranging the induction of the new investor,” the statement said.
While the new board struggles to restate Satyam’s accounts, the government and the market regulator Securities and Exchange Board of India (SEBI) have taken several steps to ease its task of finding a buyer for the company.
Thursday’s meeting will be the eighth since the government appointed the new board Jan 10 after sacking the Satyam board following Ramalinga Raju’s confession to committing the biggest corporate scam in India.