Satyam core biz rattled as promoters fall from grace
The contrast is sharp as the Raju family that founded Satyam Computer Services Ltd grapples with the prospect of losing control of a family jewel.india Updated: Jan 04, 2009 20:56 IST
The contrast is sharp as the Raju family that founded Satyam Computer Services Ltd grapples with the prospect of losing control of a family jewel.
Consider what industry researcher Forrester Research Inc said.
August 2006: “Satyam leaders are clearly modeling multiple best practices for all global service provider firms.”
January 2009: “Satyam clients should review the exit clauses in their current contracts....."
The aborted attempt to use $1.6 billion from Satyam to control real estate firms Maytas Infrastructure and Maytas Properties met with a vocal revolt from institutional shareholders, who control more than 60 per cent of Satyam, against 8.61 per cent held by the promoter family – which itself has been eroded as the family pledged shares to obtain loans.
The Raju family’s stake in the company has fallen to 5.3 per cent after unidentified institutional lenders sold 3.14 per cent of the promoter shareholding pledged with them.
The lenders have transferred another 3.13 per cent of the promoters' stake in Satyam to their own account under an invocation of the pledge. If the lenders go ahead and sell this 3.13 per cent stake, Raju family would be left with just
1.87 per cent stake in the company.
“The 3.13 per cent transferred to the lenders' account is still technically owned by the promoters, but the probability of this shareholding too being sold is very high,” said a senior Satyam official, who did not want to be identified.
Forrester Research, in a note, said "It's looking more and more likely that after the special board of directors meeting on January 10, 2009, there will be management and governance changes and even potentially the outright sale of the company."
After Satyam promoters' 5.13 per cent stake, Aberdeen Asset Management Company is the largest shareholder with a 5.12 per cent stake, possibly giving it a significant say in deciding the future of the software services company.
Life Insurance Corporation (2.66 per cent) ICICI Prudential (2.47 per cent) may also have significant roles in shaping Satyam.