Meeting agenda to go beyond buyback.
Satyam Computer Services today sprung another surprise by postponing its crucial board meeting which was scheduled to be held on Monday. The meeting will now be held on January 10.
In a late night statement, Satyam said the scope of the board deliberations will be broadened beyond just a possible share buyback. The additional possible actions include measures to strengthen the governance structure, including increasing the size and altering the composition of the board. The meeting will also 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 in the company.
The company has engaged DSP Merrill Lynch to assist in this review.
Satyam Founder and Chairman Ramalinga Raju said the board recognises the serious nature of certain questions raised by the events of the last two weeks. In order to ensure that these questions are properly addressed, and that the interests of stakeholders are carefully considered, Satyam has decided to broaden the scope of its deliberations beyond a possible buy-back of its stock, Raju said.
Satyam’s independent director V S Raju said the company is trying to get all board members together in one location and coordinating that needed a new date.
V S Raju said the new date will ensure the presence of two independent directors, Krishna G Palepu and Vinod K Dham, both of whom are currently in the US.
Palepu and Dham participated in the last board meeting that approved the acquisition of two promoter-related firms through video conference.
Speculation had been rife on the eve of the company’s now-postponed board meeting that there will be a major change in the management of India’s fourth largest Indian IT services provider.
Monday’s board meeting to consider a share buyback was announced on December 18 and analysts wondered why Dham and Palepu did not organise their travel plans earlier despite getting sufficient notice.
Academician Mangalam Srinivasan had resigned as an independent board member on Thursday as furious investors questioned the propriety of using the software company’s cash reserves to buy real estate and infrastructure companies linked to Raju.
It is also being felt that Satyam’s Founder and Chairman B Ramalinga Raju has to do a lot of explanation at the next meeting.
An indication to this effect was given by M Rammohan Rao, dean of Indian School of Business and an independent director of Satyam, who chaired the board meeting when it decided to acquire Maytas Infra and Maytas Properties, the two companies controlled by the family of Ramalinga Raju.
“I am not taking any actions at the moment. At the next board meeting, there will be discussions, clarifications will be sought, and then I will take it forward,” he said.