New owner may get Satyam control by weekend

The stake sale process of fraud-hit Satyam Computer has reached the final lap, with the government-appointed board all set to conduct financial bidding on Monday to select the highest bidder.

"We have entered the final stage of the bidding process, and on Monday we will conduct the financial bidding in Mumbai to find the highest bidder for 31 per cent stake in Satyam Computer," Chairman of Satyam board Kiran Karnik told PTI.

The Satyam scrip closed at Rs 47.15 on Thursday, up 3.29 per cent. The market cap of Satyam is at Rs 3,177.36 crore.

Karnik said during the bidding, board members Deepak Parekh and Moinak may not participate in the proceedings if the bidders happen to be those companies on which they themselves or their companies are on the board.

While Parekh is on the board of Mahindra & Mahindra (parent company of Tech Mahindra, a bidder), Moinak's company LIC is a major shareholder in L&T, which is a bidder in Satyam. Nasdaq-listed Cognizant Technology Solutions is also understood to be in the race in an "arrangement" with private equity firm Wilbur Ross.

Karnik said the management change would not happen automatically on Monday, as once the highest bidder is selected, the board would recommend the successful bidder to the Company Law Board (CLB) to approve the name. Then the highest bid amount needs to be transferred to the company account before the management is handed over.

"We hope by weekend, the transfer of management would happen as we would recommend to CLB on Wednesday of our decision on the highest bidder. It may take a day or two for CLB to approve the new investor," Karnik said.

The bidders were till the last moment seeking clarity on the company's financials, law suits and H-1B visa holders, Karnik said.

"Satyam has a substantial H-1B visa holders," he said without giving numbers.

When asked if Spice group has approached the board for entering the fray, Karnik said: “We have responded to their concerns.”

Former Supreme Court Chief Justice S P Bharucha, who has been appointed by the CLB will oversee the sale process.

If the financial bids are more than the board’s informal floor price, the highest bidder will be declared the winner. However, if the difference between the price quoted by the highest bidder and that of others is 10 per cent or less, the other bidders have the option to take the bidding process to the next round through an open auction, with the highest price in the earlier round becoming the floor price for the next.

Satyam's erstwhile founder-chairman B Ramalinga Raju had on January 7 admitted to inflating accounts and profits for years, thus bringing the firm to a collapse.