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Now,Satyam seeks CLB nod for auction to get strategic investor

It firm Satyam today said it aims to conduct a public auction for induction of a strategic investor in the company and sought the Company Law Board...

Written by ENS Economic Bureau | Hyderabad | Published: February 19, 2009 12:35:40 am

It firm Satyam today said it aims to conduct a public auction for induction of a strategic investor in the company and sought the Company Law Board’s approval for the same. Meanwhile,the Central Bureau of Investigation (CBI) today formally took over the investigation of Rs 7,800 crore Satyam Computers scam and said that a Multi-Disciplinary Investigation Team (MDIT) would be formed at its Hyderabad office to investigate country’s biggest corporate scam.

While warning that many key clients and employees have threatened to quit the company due to its bad financial position,the government-appointed board of Satyam Computer also sought CLB’s nod for allotment of preferential equity and increasing its authorised capital. The petition has been admitted by CLB,which would continue its hearing tomorrow. In its petition,Satyam has asked CLB to permit it “to devise a plan which provides for transparent,open and competitive process for continued operation” of the company in the interest of its all shareholders.

The company would also consider making “preferential allotment of equity shares or other securities for financing” its operating and capital costs and other financial needs without holding any Annual General Meeting,the petition said. Satyam submitted that once the plan was approved and functional,the funds received by it would be kept in a ‘no-lien account’ wih the IDIBI 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.

The company has also sought approval for raising its authorised share capital to 120 crore equity shares without holding any AGM.

At the end of last fiscal ended March 31,2008,the company’s authorised equity capital stood at 80 crore shares. Satyam has also asked CLB to permit it to “conduct a transparent,open and competitive price bid auction” following relaxation of strict provisions of takeover norms by Sebi and to receive requests for pre-qualification of bidders for participation in the company as strategic investors.

The Satyam board,which was formed as per the CLB orders,would have full discretion to accept or reject such requests and furnish the pre-qualified bidders with the confidential information about the company on payment of a refundable fees of Rs 5 crore. Meanwhile,the Andhra Pradesh government decided to hand over the investigation to CBI earlier this week. Before government took this decision,a Home Ministry team had visited Hyderabad and had found that Andhra Pradesh CID,which was investigating the matter,was unable to tackle the plethora of investigating agencies looking into the scam.

Meanwhile,the Sixth Additional Chief Metropolitan Magistrate here on Wednesday allowed Sebi to record the statements of Satyam Computer’s former chief financial officer Vadlamani Srinivas and ex-Pricewaterhouse partners S Gopalakrishan and T Srinivas.

CBI spokesperson Harsh Bhal said,“A joint consultative and co-coordinating mechanism is being worked out with concerned ministries,departments and institutions for providing necessary assistance to us. We are going into various aspects of this unique scam”. Sources say that CBI would register an FIR under the same sections 420,120B,406,477 and 471 of the IPC in a day or two against the Raju brothers.

(With agencies)

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