New Delhi, July 02: The government is learnt to have
approached the Company Law Board to recall its six directors
from the board of scam-hit IT firm Mahindra Satyam (earlier
Satyam Computer).
According to highly placed sources, the government today
moved an application before the Company Law Board (CLB)
seeking recall of its six directors it had appointed in
January.
The CLB is expected to pass its order on the government's
move by tomorrow.
The CLB in January appointed Kiran Karnik, Deepak Parekh,
C Achuthan, Tarun Das, S Balakrishna and T N Manoharan on the
board of Satyam soon after its founder Chairman B Ramalinga
Raju admitted to over Rs 7,800-crore fraud and manipulating of
accounts leading to collapse of the company.
In April, Tech Mahindra, through auction, bought 31 per
cent stake in the company paying Rs 1,756 crore.
It later appointed four directors on the board of
Mahindra Satyam, including C P Gurnani, Sanjay Kalra, Ulhas N
Yargop, who joined the IT firm's board on May 1.
Mahindra Satyam to meet on July 10
The board of Mahindra Satyam will
meet on July 10 to discuss the second round of preferential
share allotment to raise Tech Mahindra's stake in the firm to
about 42.7 per cent.
"The board will meet on July 10. Tech Mahindra is
expected to exercise its option to take its stake forward
through a second preferential route ... they may also decide
to stay at their existing level of 31 per cent, it is their
call," Kiran Karnik, chairman of the board of Mahindra Satyam,
said.
In April Tech Mahindra acquired 31 per cent in Satyam for
Rs 1,756 crore.
Asked about the lack of response from the shareholders to
the open offer, he said "it is a sign of strength of the
company that the share price has moved from Rs 40-45 to Rs 73
since the first preferential option was exercised".
Tech Mahindra's open offer price was Rs 58 a share and
analysts said the lower open offer price was (compared to the
current price) the reason for the lack of response.
The Satyam stock touched its upper limit of 5 per cent to
close at Rs 77.20 on the Bombay Stock Exchange today.
Earlier a Tech Mahindra spokesperson said due to a weak
response to the open offer, "we will request the Mahindra
Satyam Board for the preferential allotment, which could take
the stake of Tech Mahindra to 42.7 per cent in the
Hyderabad-based company".
Karnik said once the board decides to go ahead with the
offer, the second preferential issue should happen in the next
15 days and both the Company Law Board and SEBI's approval are
needed for this.
Tech Mahindra's agreement with Satyam allows it to raise
the stake through a second round of preferential allotment if
the open offer fails to get a good response.
To buy more stake through the preferential issue, the
company expects to spend the Rs 1,155 crore it had set aside
for the open offer.
Had the open offer for 20 per cent been successful, Tech
Mahindra would have acquired 51 per cent in Satyam. It will
now have to spend more if it wants a majority holding since
the preferential issue will expand the share capital.
Bureau Report
First Published: Thursday, July 02, 2009, 21:36