Satyam gets nod for stake sale

The beleaguered Satyam Computer Services came one step closer today to getting a new owner for itself.

Written by ENS Economic Bureau | New Delhi | Published: February 20, 2009 2:03 am

The beleaguered Satyam Computer Services came one step closer today to getting a new owner for itself. The Company Law Board (CLB) approved the petition made by the new Satyam board of directors for bringing in a new owner of the company. According to the order made by the CLB,the board can now devise a “plan to induct a strategic investor which would enable long term continuation and success of the company”,corporate affairs minister Premchand Gupta said here.

The Satyam board had yesterday sought CLB’s permission to conduct a public auction for induction of a strategic investor and get the funds needed to ensure its uninterrupted operations in a bid to expedite the process of the company’s sale. During the hearing before the board,the government through its additional solicitor general supported IT firm’s plea.

The CLB has also authorised the company’s new six-member board,chaired by Kiran Karnik,for making allotment of preferential shares and raising the company’s equity capital by 50 per cent from Rs 160 crore to Rs 240 crore. The authorised equity capital of the company,whose shares have a face value of Rs 2 each,would increase to Rs 120 crore from the current Rs 80 crore. The company also warned that many of its key clients and staff have threatened to quit due to the firm’s financial troubles and therefore,it urgently needed fresh capital.

The companies that have shown interest in acquiring Satyam so far include engineering major L&T,B K Modi group and Hindujas. Satyam also said that once the plan was approved and functional,the funds received by it would be kept in a ‘no-lien account’ with the IDBI Bank and Bank of Baroda,which recently gave the company Rs 600-crore loan towards working capital needs,and would be used for revival of the company.

Meanwhile,the CLB asked three former Satyam directors — Ram Mynampati and independent directors Krishna Palepu and Vinod Dham — to disclose their assets to the board by March 31. The directors sought more time today to submit their replies to the CLB,which had called for their replies by tomorrow in connection with the scam at the distressed IT firm. CLB granted them time till March 31.

The CLB asked them to disclose their assets to the board by March 31. Following the dismissal of the original Satyam board on January 9,CLB chairman S Balasubramanian had directed all the 12 parties named as respondents in the petition to submit their replies by February 20.

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