Satyam value in peril over toxic liabilities

Experts believe the Govt’s silence on the provision of any amnesty or protection scheme to prospective buyers fraud-hit Satyam Computer Services is set to bring down the valuation of the IT firm significantly, reports Mahua Venkatesh.

The government’s silence on the provision of any amnesty or protection scheme to prospective buyers fraud-hit Satyam Computer Services is set to bring down the valuation of the IT firm significantly, say experts involved in the deal.

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The issue will be raised by the shortlisted bidders in the course of the due diligence process. Bidders, who are not satisfied with the financial and legal data provided to them on the IT firm, could even back out at the final stage.

Satyam’s suitors face trouble in estimating Satyam’s toxic liabilities arising from class action lawsuits by shareholders in the US and also intellectual property cases.

BK Modi promoted Spice Group, heavy engineering major Larsen & Toubro and Tech Mahindra are among those shortlisted.

“No company looking to take over Satyam would want to carry the baggage of financial and legal liabilities,” Manoj Kumar, managing partner at law firm Hammurabi and Solomon, told Hindustan Times.

Spice Group, meanwhile, has appointed IT specialist Joe Liemandt on its board to assist in the Satyam acquisition process.