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| Hunt for Satyam CEO, CFO on; 6-7 buyers line up |
| Press Trust of India / New Delhi Jan 29, 2009, 17:44 IST |
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The process of finalising a CEO and CFO for Satyam Computer Services is still on but Homi Khusrokhan, ex-MD of Tata Chemicals (now on the Satyam board) and ex-group finance director of the Murugappa Group Partho Datta, are not in the race for these two positions.
Clarifying this, Satyam board member Tarun Das told reporters on the sidelines of a CII event here that "legal immunity is coming in the path of appointing the new CEO and CFO but right now, the Board’s priority is to stabilise Satyam and the future of its employees, customers and other resources. It is also important for us to pay the vendors and clear all dues and to create enough cash to run the business. We are also improving collections from clients."
Das also said that till date, six-seven companies -- both Indian and global IT, manufacturing and PE firms -- have approached the firm for a complete buyout. To evaluate this, the company’s legal advisors Amarchand Mangaldas have appinted KPMG and Deloitte who will give their findings in six weeks. The matter is understood to have been communicated to the employees too through an internal email.
Four strategic investors include Larsen and Toubro (which now has a 12 per cent stake in Satyam), Tech Mahindra, Aegis BPO and iGate-PE combine. Shiv Nadar of HCL Technologies, too, has publicly evinced interest in a buyout but with conditions. Moreover, asset manager Fidelity Investments today bought a 2.5 per cent stake in Satyam for around $19 million (17.13 million shares at a weighted average price of Rs 53.40) through two block deals, according to stock exchange data.
The Satyam board, on its part, has ruled out a sale of ‘parts’ of Satyam at this stage saying it would be contrary to the mandate of regulating the affairs of Satyam as a going concern, as stipulated by the central government. The board, instead, plans to devise appropriate, fair and transparent measures for enabling open bids in consultation with the Securities and Exchange Board of India (Sebi) and the Centre, since adequate number of bidding interests have been evinced to the new board.
Goldman Sachs and Avendus are the investment bankers for Satyam while Boston Consulting Group is the management advisor.
On Satyam’s "inflated" headcount issue, Das said the company’s HR and finance payroll departments along with external agencies have confirmed that the headcount is above 51,000. Ramalinga Raju, according to a police submission in the Hyderabad court, had confessed that Satyam had 13,000 ghost employees, with only 40,000 existing on the company’s pay rolls.
Raju channelled the ‘salaries’ of non-existent Satyam employees into land purchases by ghost companies, and forging bank statements and NBFC certificates to hoodwink auditors. In fact, Raju is alleged to have siphoned-off Rs 20 crore a month from Satyam through salaries for these ghost employees.
Satyam is also planning to raise capital for which it is negotiating with different banks- both new and old. “New banks have come forward as we need to keep Satyam financially comfortable,” added Das. The company is currently in talks with banks namely- BNP Paribas, ICICI Bank, HSBC Bank, HDFC bank and Bank of Baroda, apart from new banks whose names Das didn’t disclose. The company needs to pay its vendors and clear other dues and is also improving collections from clients.
Incidentally, after one order cancellation from US based State Farms Corporation, Das said that the Board is reaching out to customers with the help of Satyam’s executives. “Customers are also supporting us as they get a high level of customer satisfaction from the quality work done by Satyam,” he said.
The newly-constituted Satyam board meets every week and the meeting is chaired by any one member of the board.
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