Satyam  is close to finalising a new head to help the government-appointed board put the fraud-hit outsourcing firm back on track, a minister said on Wednesday. Corporate Affairs Minister P.C. Gupta said the new head of Satyam would would not be called a chief executive, but declined to name the identified candidate.

“This gentleman has a vast experience of running large multinational and national companies in India,” he told television news channel CNBC TV18. CNBC TV18, citing sources, later said that Homi R. Khusrokhan, a former managing director of Tata Chemicals, was the frontrunner to head Satyam.

The new head would need to work closely with the board, lift employee morale and stop key customers from joining State Farm Mutual Automobile Insurance Co. in cancelling contracts.

Satyam’s new board, which last week said it had narrowed the shortlist for CEO and chief financial officer to three, has said it would outline the proposed management structure this week.

Satyam, India’s No. 4 software exporter, has been battling for survival since founder Ramalinga Raju resigned as chairman earlier this month, saying profits had been falsified for years and $1 billion of cash on the books did not exist.

Since then the government has stepped in and appointed a new board to try to resolve India’s biggest corporate fraud.

On Tuesday, the board named Boston Consulting Group as management advisor to help revive the firm, with Goldman Sachs and Indian firm Avendus appointed as investment bankers to identify strategic investors and obtain expressions of interest.

BIDDERS APLENTY

Satyam shares rose nearly 18 percent on Wednesday, an eighth successive rise, driven by expectations of potentials bidders for the firm. The rise took the shares to 55.45 rupees, their highest close since the fraud was revealed.

Despite the gains, the shares are only worth about $1.10, and are down 90 percent from their 2008 high of 544 rupees.

“The market is expecting some kind of an open offer,” said Gajendra Nagpal, CEO at Unicon Financial.

“We are hoping that it won’t be less than 90 rupees. So it’s a punter’s call to make some quick money,” he said.

Engineering conglomerate Larsen & Toubro, which also runs a small software services firm, trebled its stake in Satyam to 12 percent last Friday.

On Tuesday, L&T’s chairman said it would not be averse to raising its stake further, to 15 percent. Under Indian law, this would trigger an open offer for a further 20 percent.

The open offer is usually based on the average price over the last six months, which would be about 335 rupees, according to Thomson Reuters data, but Nagpal said there was a possibility the market regulator could relax rules as Satyam shares had plunged.

U.S. based outsourcer iGate said last week it would be interested in buying Satyam with help from private equity funds.

On Wednesday, a Hyderabad court dismissed bail petitions of Raju, his brother and former managing director Rama Raju, and former CFO Vadlamani Srinivas. They are currently being held in a Hyderabad jail.

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