Satyam postpones board meeting to Jan 10December 28th, 2008 - 7:52 pm ICT by IANS
Bangalore, Dec 28 (IANS) Beleaguered Satyam Computer Services postponed its board meeting, convened Monday (Dec 29) to discuss a proposal for buy-back of shares by promoters, to Jan 10, the IT bellwether said Sunday.”The next meeting of board of directors has been rescheduled to January 10, 2009, in order to allow the board members to consider additional options,” the Hyderabad-based company said in a statement.
Satyam founder chairman B. Ramalinga Raju has agreed to put off the board meeting on the request of independent directors, who also wanted the scope of the agenda enlarged.
“Satyam’s board of directors recognises the serious nature of certain questions raised by the events of the last two weeks. In order to ensure these questions are properly addressed and the interests of stakeholders are fully considered, Satyam has decided to broaden the scope of its deliberations beyond a possible buy-back of its stock,” Raju said in the statement.
The listed firm notified the stock exchanges Dec 18 that it had convened a board meeting Dec 29 to consider the proposal for buy-back of shares by the promoters, who hold 8.5 percent of the equity stake.
The promoters include Raju’s brother B. Rama Raju and family members.
Raju has been under fire from investors and analysts for his aborted bid Dec 16-17 to buy two family-run realty firms (Maytas Properties and Maytas Infra) for $1.6 billion (Rs.79.2 billion) and bail them out of a severe cash crunch.
At the rescheduled meeting, the nine-member board will deliberate on measures to strengthen the governance structure, including increasing the size and altering the composition of the board, conduct a review of the company’s strategic options to enhance shareholder value and address issues arising from a possible dilution of the promoter’s stake.
DSP Merrill Lynch has been engaged to assist in reviewing the various options.
“Satyam takes the interests of its stakeholders very seriously. We will take whatever steps are necessary to reinforce their trust and confidence in the company,” Raju said.
The promoters hold a minority stake of 8.5 percent, while foreign institutional investors (FIIs) have 48.22 percent of the total equity stake and Indian financial institutions 12.91 percent. Others, including retail investors hold the remaining 30.38 percent of the stake.
The Maytas’ buyout controversy has also led to the abrupt resignation of independent director Mangalam Srinivsan from the board Dec 26.
After Srinivasan left, the nine-member Satyam board has five independent directors, two executive directors from promoters’ side, a whole-time and a non-executive director.
The five independent directors are V.P. Rama Rao, Vinod K. Dham, Mendu Rammohan Rao, T.R. Prasad and V.S. Raju. Ram Mynampati is the whole-time director, while Krishna G. Palepu is the non-executive director.
Ramalinga Raju and Rama Raju are promoter directors.