Fraud-hit Satyam gets nod for 51 pct stake sale

March 6, 2009
File photo of Indian software company Satyam's headquarters in Hyderabad

Fraud-hit Indian outsourcing firm Satyam on Friday said it had been given the green light to open a global bidding process to sell off a 51 percent stake in the company.

Satyam's government-appointed board said it would "initiate the process to invite expressions of interest" from bidders shortly, a statement said.

Satyam has been battling for survival since January when its founder B. Ramalinga Raju, now in jail, stunned the corporate world by declaring he inflated the firm's balance sheet by more than one billion dollars and fudged its profits for years.

Company shares surged 15.81 percent or 5.5 rupees to 40.65 in morning trade Friday on the Mumbai stock exchange.

Satyam says it wants to find a buyer soon -- even though it could be months before the full truth about the disgraced outsourcing giant's finances emerge.

Market regulator the Securities and Exchange Board of India has approved the sale of the stake in two phases.

The buyer would first acquire newly issued shares of the company representing 31 percent of its share capital.

The purchaser would then make an public open offer, mandatory under financial market regulations, to acquire another 20 percent of the firm, the statement said, raising its total stake in Satyam to 51 percent.

"Qualified investors are expected to have total net assets in excess of 150 million dollars," the statement said.

In line with Indian law, a lock-in period of three years will prevent the investor from selling these acquired shares, the regulator said in the statement.

(c) 2009 AFP

Explore further: GM takes stake in China car-sharing startup

Related Stories

GM takes stake in China car-sharing startup

October 12, 2016

US automaker General Motors is taking a stake in the Chinese car-sharing startup Yi Wei Xing, expanding the company's global footprint in alternative and mobile-oriented transport.

Recommended for you

Microsoft aims at Apple with high-end PCs, 3D software

October 26, 2016

Microsoft launched a new consumer offensive Wednesday, unveiling a high-end computer that challenges the Apple iMac along with an updated Windows operating system that showcases three-dimensional content and "mixed reality."

Making it easier to collaborate on code

October 26, 2016

Git is an open-source system with a polarizing reputation among programmers. It's a powerful tool to help developers track changes to code, but many view it as prohibitively difficult to use.

Dutch unveil giant vacuum to clean outside air

October 25, 2016

Dutch inventors Tuesday unveiled what they called the world's first giant outside air vacuum cleaner—a large purifying system intended to filter out toxic tiny particles from the atmosphere surrounding the machine.


Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.