The Hindu : Business : Satyam takeover not possible for now

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Saturday, Jan 10, 2009
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Satyam takeover not possible for now

A. Saye Sekhar

The newly constituted 10-member board will meet within seven days

HYDERABAD: With the Government stepping in, the whole saga of Satyam Computer Services has attained new dimensions. The scope for any takeover to scoop out the company of red too is blocked at least for now.

The liquidity position would be the key to any acquisition, even as several large investors exited from the company selling their shares at a very cheap rate.

Hours before the Government finalised the decision, Anmol Sekhri, portfolio manager in Bonanza Portfolio, said the Government should step in to protect the nation’s reputation.

Considering the fact that two U.S. law firms — Izard Noble LLP and Vianale & Vianale LLP — filed ‘class action law suits’ on Satyam Computer; the removal of the company from the benchmark indices of the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) and ‘uncertain liquidity’ position, the takeover of the company is ruled out.

The profit and loss account of the company had to be established first.

The 10-member board constituted by the Government, which would meet within seven days, would provide necessary direction.

Employees who spoke to this correspondent welcomed the decision of the Government.

“This move will restore the prestige of the company at least to some extent,” said a senior manager working in the materials department.

The fixed assets might not be of great interest to anybody who wanted to acquire the company, he said.

Because, the assets of the company are its associates and customers, who were transferable and mobile, said Mr. Sekhri.

The leadership team, which tried to pull up the socks, would also have to wait, though they were generating the business, implementing the projects and collecting the receivables, he observed.

Over 30 crore shares were traded on the BSE and the NSE with the scrip closing at Rs. 23.85, touching an intraday low of Rs. 11.50.

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