The Hindu Business Line : Who will make it to the new Satyam board?

New Delhi/Mumbai/Hyderabad, Jan. 10 Financial institutions Lazard and Life Insurance Corporation of India as well as the Andhra Pradesh Government are among those who may clinch some of the berths in the re-constituted board of Satyam Computer Services.

A day after the Government’s decision to appoint 10 nominee-directors on the board of the troubled Satyam, Lazard – which has a substantial stake in the company - has written to Ministry of Corporate Affairs, purportedly staking a claim for a say in the management of the firm.

Asked about Lazard’s pitch for board representation, the Corporate Affairs Minister, Mr Prem Chand Gupta,said, “I have seen the letter from Lazard…That is being looked into by the Ministry.”

Mr Gupta also met the Prime Minister to apprise him of the situation. Earlier in the day, the SEBI chief, Mr C.B. Bhave, called on the Minister to discuss the issue.

Meanwhile, the market has been rife with speculations over the names that would make it to the new Satyam board. Sources said that at least 20-25 were in the reckoning, including those from the fields of finance, IT and law. The names doing the rounds are that of Mr Y.V. Reddy (former RBI Governor), Mr Ajay Mishra (Principal Secretary IT and Communications, AP), and Mr Kiran Karnik (former Nasscom President), Mr Saurabh Srivastava (Chairman of the Indian Venture Capital Association), Mr Deepak Parekh (HDFC chief), and Mr M Damodaran (former SEBI Chairman and the man behind who was behind the restructuring of IDBI and UTI). It is, however, unlikely that apex industry body Nasscom would have a board-level representation.

“The board was replaced only yesterday. It is Saturday today…Please bear with us,” the Minister said when asked about the status of nominations for the board.

Sources said that LIC – which has a 4.34 per cent stake in Satyam – may get representation on the board as it is the domestic institutional investor with the largest holding. When contacted, the LIC Managing Director, Mr Thomas Mathew, welcomed the Centre’s move to re-constitute the board. “As long-term investors we are concerned about what has happened in Satyam. We are keen to play a positive role to turnaround the company, protect its shareholders and investors, and salvage its value”. Meanwhile, the US-based Lazard Asset Management (LAM) has raised its stake in the Satyam to 5.30 per cent by acquiring 0.51 per cent stake on January 7 through open market purchases. In a disclosure to the BSE, Lazard said it “holds shares on behalf of its clients and the acquisition of the shares was not for the purpose of obtaining control”. Incidentally, Lazard acquired 34.5 lakh shares the day Satyam Chairman, Mr Ramalinga Raju, made startling confessions on a Rs 7,000-crore accounting fraud. But it is not clear at what price Lazard purchased these shares. The Satyam scrip fell 77 per cent after disclosures by the disgraced promoter. As on September 30, 2008 Lazard held 2.15 per cent stake in Satyam. Between September 30 and January 6, the company acquired 2.64 per cent. Of the 357.4 lakh shares held by the US company, it has been granted proxy-voting rights only on 342.5 lakh share, said LAM.

Related Stories:
Govt to take over management control of Satyam Computer
Tax maze in the Satyam case
Gupta talks tough, wants RoC to submit report on Satyam in a week

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Who will make it to the new Satyam board?