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New Delhi/Mumbai, Feb. 18 The Government-appointed board of Satyam Computer Services Ltd on Wednesday sought the Company Law Board’s nod to induct a strategic investor.

Official sources told Business Line that “the CLB hearing has concluded and an order can be expected on Thursday.”

This move follows the recent easing of takeover norms for companies whose board has been superseded by the Government, sources said.

The Satyam board also sought the CLB’s permission for the allotment of preferential shares and an increase in the authorised share capital of the company to upto Rs 200 crore from the current Rs 80 crore.

“Once the CLB permission is obtained, it would help the board in devising a plan which provides for a transparent and competitive bidding process which would not only be smooth but also faster,” official sources explained.

For allotment of preferential shares, shareholders’ nod is required. But, in the prevailing circumstances, it may take too much time. Hence, the board’s decision to seek CLB permission for completing the bidding process smoothly. Shareholders’ approval will be obtained thereafter.

The sources said that “Ideally, the investor should be in place as soon as possible, as a company of Satyam’s size cannot continue to operate like this.” Satyam board members have also been indicating that a buyer for the company could emerge by the end of February. The next board meeting is scheduled for Saturday in Hyderabad.

The companies reported to be eyeing Satyam include L&T, SpiceCorp, the Hinduja Group and Essar Group company Aegis BPO.

When contacted, Dr B. K. Modi, Chairman, SpiceCorp, told Business Line, “There is going to be an auction and we are looking at it. Our position remains the same."

According to sources, the key issue for any investor will be the cost of acquisition. With the Securities and Exchange Board of India having already amended the takeover regulations, the Satyam board has to decide on the open offer price and the bidding procedures, sources familiar with L&T’s strategy said. Even at a minimum offer of 15 per cent stake, the winner will have to make an open offer for another 20 per cent. This would mean that L&T will have to acquire 35 per cent stake, which would be in addition to the 12 per cent it already holds in Satyam. In a related development, the Central Bureau of Investigation has taken over the Satyam case and decided to set up a multi-disciplinary investigation team in Hyderabad.

Also Telugu Desam leader Mr Chandrababu Naidu, accompanied by a large delegation, met the Corporate Affairs Minister, Mr Prem Chand Gupta, and took up the issue of Satyam.

More Stories on : Regulatory Bodies & Rulings | Software | Corporate Governance | Satyam Computer Services Ltd | Open Offers

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