Murthy offloaded Satyam shares on eve of Maytas deal
AS Murty, appointed as Satyam's new CEO on Thursday, sold 40,000 shares of the company worth about Rs 90 lakh between Dec 12-16, 2008, according to disclosures made by the company to the BSE. Sandeep Singh reports. See spl: Satyam sinksbusiness Updated: Feb 06, 2009 01:24 IST
AS Murty, appointed as Satyam Computer Services’ new CEO on Thursday, sold 40,000 shares of the company worth approximately Rs 90 lakh between December 12 and 16, 2008, according to disclosures made by the company to the Bombay Stock Exchange (BSE).
<b1>On December 16, the former board of Satyam, under the chairmanship of its now-jailed founder B Ramalinga Raju, decided to acquire family-dominated Maytas Infrastructure and family-owned Maytas Properties for $1.6 billion (Rs 8,000 crore), which eventually led to Raju’s admission of fraud.
A company spokesperson rejected suggestions of insider trading or that Murty knew of the impending controversy and cashed out before the shares lost value. “It is not a case of insider trading… Murthy was not privy to proceedings of the board meeting on December 16,” she said. She also denied that Murty knew of the Maytas buyout proposals.
Murty sold 7,000 shares on December 12, 14,000 on December 15 and 19,000 on December 16.
Before that, the last time Murty — the global delivery head before the new assignment — sold shares was in June 2008, when he offloaded 3,200 shares worth about Rs 15.9 lakh.
On the BSE, Satyam shares closed at Rs 226 on December 16. After the announcement of the Maytas acquisition, its price crashed by 30 per cent to close at Rs 158 on December 17, and hit a low of Rs 20.30 per share on January 15.
If Murty had not sold the shares prior to the announcement, their value based on Thursday’s closing price of Rs 46.25, would be Rs 18.5 lakh — a fifth of what Murty got when he sold them.
The Satyam spokesperson said the board was aware of Murty’s share sales. “They have done all due diligence,” she said.
Institutional investors are confident about the decision taken by the board. “I do not doubt the board and the members would have done their due diligence before the appointment,” said a senior official representing an institutional investor with a large exposure to the company.