Satyam goes for a spin as investors plan takeover

The spirit of at least 50, 000 employees of the Satyam Computer Services may be at its lowest ebb. The current crisis might even force a few at the Satyam to look for other jobs. But many have vowed to stick with the company and pledged that the company comes first rather than chairman B. Ramalinga Raju who brought the company to its knees with his exit plan.Shock and aweIn a shocking move the Raju family Monday informed Bombay Stock Exchange that the promoters — founder of Satyam Ramalinga Raju, his wife Nandini Raju, his brother and co-founder of Satyam Rama Raju and wife Radha Raju — of the company wishes to liquidate its shares. The market watchers were only too glad that the Rajus are on their way out hoping that institutional investors who own 51 per cent of the company will bring in fresh investment and possibly a new management.At the moment Satyam board which has planned a meeting on January 10 may not take any major decision after three more directors — Vinod Dham, Krishna Palepu, M. Rammohan Rao — followed Managalam Srinivasan by resigning.

Mangalam Srinivasan is the longest serving member and had quit on Christmas Day taking moral responsiblity for the fiasco over the Maytas acquisitions that raised questions about the role of independent directors and corporate governance issues.Earlier this month, Satyam had announced the acquisition of two companies promoted by the Rajus, but had to call off the deal within hours follwing investors' dissent. The ‘crisis’ has been planned for the past couple of years after the promoters formed a holding company called SRSR Holding Private Ltd and transferred all their shares (around 8.5 per cent of the s hares of Satyam) to this entity. The shares were transferred through a deal of 1.96 crore Satyam shares when the price was at Rs809 per share. That was in 2006 and market watchers watched in amazement and speculated that Rajus were planning an exit which they naturally denied. And Raju siblings put out a briefing that the plan was only way to handle their scattered holdings. But it was actually to consolidate their shares and later pledged to institutional investors for loans to raise funds to buy land and real estate. No one clearly knows for how much the Rajus pledged.

The institutions to whom Rajus pledged their shares were only too happy to lend the money but after the financial meltdown hit the markets trouble began.The lenders smelt trouble the moment Satyam shares plummeted and naturally they asked Rajus to make up for the losses which the promoters could not as the money invested in real estate and land were also went down.Speculation is that Rajus might be shown the door, with institutional investors seeking a greater role in the day-to-day affairs of the firm.Institutional investors such as ICICI Prudential, Aberdeen Asset Management and Fidelity hold at least 60 per cent.