7 Jan : Terming the financial bungling disclosed by IT major Satyam as an unprecedented event, the financial institutions owning close to 60 pc equity in the company are collectively exploring all the available options, including legal action.
The options to be explored also include a merger of the beleaguered IT firm with another company or buyout by private equity investors, said the officials of institutional shareholders of Satyam.
India’s largest private sector life insurer, ICICI Prudential, which holds a 2.5 percent stake in Satyam Computer, said it is in talks with other institutional investors to explore various options like legal recourse and merger of the company with other firms.
The insurer would also make efforts to ensure that concerns of institutional investors are addressed by the board of Satyam Computer, which is meeting on 10th January.
"We have started informal discussion with other financial investors and are evaluating all possible options to maximise the value for our stakeholders," a senior official of ICICI Prudential Life Insurance said.
ICICI Prudential Life Insurance has a 2.47 percent stake in Satyam whose shares plunged by 78 percent to below Rs 40 on the BSE following admission of financial wrongdoing.
It is time for all the investors to come together and discuss the options available as a group, the official said, adding that informal discussions have been going on since Satyam-Maytas controversy erupted.
Options available before investors include exiting from the company, merger, legal recourse and buyback of shares.
Institutional investors have about 60 percent stake in the Hyderabad-based company, whose Chairman B Ramalinga Raju resigned on Wednesday after disclosing major financial wrong-doings.
The beleaguered IT major, already under scanner over the aborted acquisition of firms promoted by the Chairman’s family, received a rude shock days ahead of the board meeting, with Raju stepping down along with his brother and Managing Director B Rama Raju.
Asked whether the group will convey their concern to the board, ICICI Prudential official said the group would try and establish link with the board members so that their concerns are considered.
According to analysts it is an unprecedented event and investors are concerned about their investment and fate of the company.
When contacted, Fidelity Mutual Fund which too has stake in Satyam refused to comment on the issue saying the company as a policy doesnot comment on individual investment.
Another investor Reliance Mutual Fund which had exposure as of last month existed the company following the Satyam-Maytas controversy.
According to the spokesperson, Reliance Mutual Fund as of now has zero holding in Satyam Computers as the company liquidated all its shareholding by 17th December.
Some other investors, such as BNP Paribas are also said to have sold off their entire holding in the company.