What the Hell is Really Happening at Satyam?

We are Big Time Crooks, Confesses Satyam

If Shakespeare were writing Hamlet today, the bard would probably write Something is rotten in the state of Satyam. 

A few hours ago (17:40 EST), Indian IT services provider Satyam Computer Services announced that promoters’ stake in the company may have been reduced.

Some hours before that, Satyam put out a statement that it had postponed its board meeting scheduled for tomorrow (Monday) to January 10.

Attributing the dilution to routine actions by the promoters’ lenders, Satyam said the promoters had informed the company that all their shares in the company were pledged with institutional lenders, and that some lenders may exercise or may have exercised their option to liquidate shares at their discretion to cover margin calls.

If the dilution has happened, it’d reduce the already low 8.74% stake held by the promoters in the company.

Surely, not a pleasing prospect to investors who usually like to see promoters hold a high stake in the company. You know something like eating your own dog food.

Murky Picture
The picture at Satyam is getting murky and dismal by the day. 

Earlier today, Satyam said it was postponing the board meeting scheduled for Monday to January 10 to let the board consider additional options.

Here’s Satyam Computer Chairman B. Ramalinga Raju’s blah blah blah:

Satyam’s Board of Directors recognizes the serious nature of certain questions raised by the events of the last two weeks. In order to ensure that these questions are properly addressed, and that the interests of stakeholders are fully and carefully considered, Satyam has decided to broaden the scope of its deliberations beyond a possible buy-back of its stock.

The additional possible actions Satyam’s board is supposed to consider on January 10 include:

* Measures to strengthen Satyam’s governance structure, including increasing the size and altering the composition of the board.

* Conducting a review of the company’s strategic options to enhance shareholder value. Satyam has engaged DSP Merrill Lynch to assist in this review. In plain English, this means possibly selling the company.

* Addressing issues arising from a possible dilution of the promoter’s stake in the company.

Satyam’s board is expected to make recommendations on these subjects at the January 10 meeting.

Unless you’ve just come in from some other planet, you know that investors are extremely unhappy with Satyam lately and have pushed its shares shaply lower.

After getting his ass whipped by irate investors over the proposed $1.6 billion acquisition of two building companies Maytas Properties and Maytas Infra with close links to the Raju family, Satyam Computer Services Chairman B.Ramalinga Raju recently decided against going ahead with the deals.

The Raju family has significant stakes in the Maytas companies (Maytas is Satyam spelled backward) raising corporate governance concerns that triggered downgrades by Citigroup and JP Morgan Chase.

Meanwhile the Economic Times is reporting that IBM, Accenture and Cap Gemini could be suitors for Satyam Computer.

Related Stories:
Indian IT Crook Satyam Names Insider A.S.Murty CEO
Satyam to Employees – You’ll get January Salary
Satyam gets 3 New Directors
Indian Outsourcing Crook Ramalinga Raju Arrested
Satyam Board Kicked Out, Hooray
Ram Mynampati Vows to Stay at Satyam; Kick Him Out
Trading in Satyam Still Halted on NYSE
We are Big Time Crooks, Confesses Satyam
Satyam Makes Another Big Mistake – Names Insider Ram Mynampati Interim CEO
Crook Raju Wipes Out Rs 10,000 Crore in Market Cap
End of the Road for Satyam Computer
53,000 Satyam Coolies Up Shit Creek; Massive Layoffs Likely
Satyam Fraud – The Perils of Outsourcing
Satyam Chairman Ramalinga Raju’s Arrest Imminent
Satyam Shares Crash After Massive Fraud Revealed
Are Infosys, Wipro & Mindtree Crooks Too?
Satyam Fraud – Is Nasscom Sleeping?
After the Shit Hits the Fan, Satyam Kisses Employees Ass
Investors To Satyam Raju – Drop Dead
Satyam Computer Screwed in Forgery Case

3 Responses to "What the Hell is Really Happening at Satyam?"

  1. SRINIVAS   December 29, 2008 at 1:28 am

    everybody is overeacting and bringing down the value of the fourth largest IT firm in India ….

    At the end of the day the client list and revenues have not been affected …the deal has been called off …so now things should settle down

    SearchIndia.com Responds:

    To use an American expression, we need a regime change at Satyam.

  2. SRINIVAS   December 30, 2008 at 11:13 pm

    today all Investors have toned down thier stand after realising that all this hype is affecting the share price …and they hold the maximum stake ….

    Raju’s seem to have a reduced stake now ….since the shares which they had pledged against loans ….have been sold off by the creditor ….

    HP is a possible buyer for Saytam … This is in Economic Times

  3. joeantony   December 30, 2008 at 11:49 pm

    I dont understand why this a.h. raju is not fired yet, afterall he holds only 8%. Its also surprising that few key directors quit silently, raju taken care of them?
    This guy is just after investor money, I think he is just doing a polish looting, and in India we wont have any law to stop such thing … ah.

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