Government may defer Satyam sale

10 February 2009

According to Kiran Karnik, who was appointed chairman of Satyam Computers last week (See: Karnik appointed new Satyam chairman)  the board will next week decide on a long-term action plan, that would include a possible sale of the company.

Satyam, the IT major, which was hit by a massive fraud with chairman Ramalinga Raju resigning, has many top-slot international clients including General Electic and Coca Cola.

The cash strapped company borrowed Rs600 crore from banks to meet short-term capital needs including employee salaries last week.

The new board has been asked by the ministry of corporate affairs, which is monitoring Satyam's operations and co-ordinating investigations to draw up a road map for the company's future.

However, a decision on the company's future requires clarity on the company's assets and liabilities as also a restatement of its financial statements. Satyam, has assigned Deloitte and KPMG to restate its accounts which may take around six weeks according to Tarun Das, a member of the newly constituted board.
 
Meanwhile, engineering major Larsen & Toubro that has acquired around 12 per cent of Satyam's equity could increase its stake according to analysts. Others in the fray for Satyam acquisition include Spice group and Hinduja group.

Although Spice chief BK Modi had suggested an e-auction for Satyam the proposal was rejected outright with the former Satyam board saying that the company was not a commodity to be sold in an auction.