Layoffs begin at Satyam, non-techies first to go

Though corporate affairs minister Salman Khursheed had hinted at government intervention, the first phase of layoffs has started at Satyam Computer Services. Trainers, HR and sales & marketing executives are being singled out for action by Tech Mahindra, Satyam’s new owner.

“The first phase of layoffs has started. In the second phase, employees who have been on the bench for less than three months would go away,” said an official source. It couldn’t be ascertained how many on the bench have been asked to leave. “Some senior executives on the bench are being offered almost 50% of their salary or an option to go on a sabbatical. Several benched senior executives have moved out,” the source said.

On Monday, commenting on media reports that 10,000 employees could be retrenched at Satyam, Khursheed had stated, “Layoffs is something we are not going to turn a blind eye to, as we have a relevant presence in decision making (in Satyam Computer Services.)”

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Mahindras win bid for Satyam

Tech Mahindra, India’s sixth-largest software exporter, on Monday won the race for a 31% stake in embattled Satyam Computer Services for Rs 1,756 crore, at a bid price of Rs 58 a share.

Venturbay Consultants Private Ltd, a 100% subsidiary of Tech Mahindra, a part of the Rs 33,500-crore Mahindra Group, will acquire over 30 crore shares in Satyam for the 31% stake and an additional 20% through the mandatory open offer to the public.

The Satyam board will now recommend the winner to the Company Law Board for its approval.

The acquisition would catapult Tech Mahindra into the big league of IT services companies, with the likes of Tata Consultancy Services (TCS), Infosys Technologies and Wipro Technologies.

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Sebi mulls open offer relaxation for Satyam buy

Markets regulator Sebi on Monday said it was considering a waiver of regulations that guide how shares should be priced in an acquisition in the case of Satyam Computer Services. Chairman CB Bhave told reporters after a Sebi board meeting that he had received a letter from the newly constituted Satyam board to exempt it from certain provisions of the Sebi (Substantial Acquisition of Shares & Take overs) Regulations,1997.

Bhave said the January 7 acknowledgement of a Rs 7,800-crore accounting fraud by erstwhile Satyam chairman B Ramalinga Raju had created an unusual situation in the pricing of the scrip. Hence, there was a genuine need to look into this matter, said Bhave. “We will not take this on a case-to-case basis, but will look at it generally and will make changes in the amendments so that such abnormal cases are handled through a transparent mechanism,”he said.

The mechanism of arriving at the price will be looked into later, Bhave added. Sources in Sebi said they expect this would be concluded by the end of the week.

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Raju:funds were given to Maytas

The Satyam Computer Services fraud grows murkier. According to police sources,former chairman B Ramalinga Raju has now confessed that he diverted Satyam funds to family-owned Maytas Infra and Maytas Properties since 2004. The two had earlier denied receiving any funds from Satyam.

The latest admission intensifies pressure on the reconstituted board to contain the damage, given that clients have threatened to ditch the be leaguered company. “Two large customers have given us notice on leaving.But there are others and many of them have indicated that they would like to renew and expand their contracts,” said Satyam board member Kiran Karnik.

On Thursday and Friday, the board will hear presentations on a potential buyout by a clutch of suitors. L&T is seen as the front runner in the race. Others, including IBM and HP, are also said to be in the reckoning.

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Satyam gets buyout offers

A Satyam Computer Services sell-off could follow the way of erstwhile Unit Trust of India. This would mean bifurcating the company: one part with the troubled assets taking upon itself the lawsuits, which would be handled with government help, while the functional business part would be sold off. But a decision on any such plan would have to be taken by the new board, which will be meeting in Hyderabad on Thursday and Friday.

The possibility of a buyout was confirmed on Tuesday by Tarun Das,one of the six-member board headed by Deepak Parekh. He told reporters that some domestic and foreign companies had expressed interest in taking over the IT company. “The board has not yet discussed the issue of looking for a buyer. But I have to truthfully say, we have been approached by potential buyers,” said Das, chief mentor of CII, at The Partnership Summit 2009 in New Delhi. He said offers had come from multinational entities and Indian IT companies.

While Das did not name the interested companies, L&T chief AM Naik met corporate affairs minister Prem Chand Gupta along with key ministry officials and discussed options related to L&T’s ‘strategic’ investment in Satyam.

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Satyam poised for management change, Rajus’ stake goes down

Satyam Computer Services is no won the block with promoters confirming to BSE that there has been a dilution of their 8.6% stake in the company and three more independent directors quitting its board. The company has appointed DSP Merrill Lynch to present an action plan for“ for increasing shareholders’ value” at the rescheduled board meeting on January 10.

The possible change in management was welcomed by the market, with the company’s shares on the Bombay Stock Exchange closing up 9.41% at Rs 148.25.

In its filing to BSE, Satyam said, “the company has received a communication from the promoters that all their shares in the company held by SRSR Holding Pvt Ltd were pledged with institutional lenders over a period of time since September 2006.

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