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Satyam appoints management advisor, investment banks
- — 28 January, 2009 08:47
The board of Satyam Computer Services has appointed The Boston Consulting Group as management advisor, and Goldman Sachs and Avendus, an Indian investment bank, as investment bankers to advise the company on various strategic options, including bringing in a large investor in the company.
The board said in a statement late Tuesday that it had received proposals from companies and private equity firms, some of which are interested in Satyam as one integrated entity, while others are keen on "portions" of Satyam's business.
A sale of parts of Satyam was not an option being evaluated currently as it was against the mandate of the Indian government, which is regulating the affairs of Satyam, the board added.
The six-member board has been appointed by the Indian government, after superseding Satyam's previous board.
Satyam slipped into crisis earlier this month after the company's founder, B. Ramalinga Raju, stated that the company had inflated profit for several years.
An immediate concern for the new board appointed by the Indian government was to ensure that there was sufficient liquidity in the company to run its operations. The board said on Tuesday that salaries of staff for January would be paid from internal accruals and receivables.
The board also said Tuesday that it had concluded most of the discussions relating to the financing requirements of the company. These funds will help tide over the immediate, compelling operational expenses, it said.
The board has also contested the claims of police investigators that Raju and some other executives had overstated the number of employees at the company. A prosecutor told a court last week that Satyam had only 40,000 employees, instead of the 53,000 claimed by the company, and the salaries of the fictitious staff were siphoned out. Investigators say that the company may have made profits, but Raju and some other executives allegedly siphoned out the money.
An Indian engineering and construction company, Larsen & Toubro (L&T), meanwhile increased its stake last week in Satyam from 4 percent to 12 percent, by purchase of shares in the open market. The move by L&T, which has not discussed its plans, has triggered speculation that it may be preparing to take over Satyam.
Distancing itself from L&T's moves, the board said on Tuesday it will work out appropriate, fair and transparent measures for open bids from investors, in consultation with the Securities and Exchange Board of India and the Indian government.
The board said last week that a new CEO and chief financial officer for the company would be announced this week.