On December 16, 2008, Ramalinga Raju, founder and erstwhile chairman of Satyam Computer Services, opened a pandora's box by announcing his intention to invest in group companies, Maytas Infra and Maytas Properties. Since that day it has been a downward spiral for Raju, personally and for Satyam. On January 7, Raju confessed to a fraud of a kind that corporate India has never seen before and was arrested. Four days later the government stepped into to put in place a new board that has been working to find a suitor for Satyam.

Who then will acquire Satyam, and what will be the course ahead for the crisis-mauled company that once threatened to collapse in the wake of the scam but has since managed to stay afloat? Will the new Satyam acquirer resuscitate the erstwhile tech giant - it was regarded as one of India's best till its fall - and restore it to its former glory. Answering the questions in a discussion are Ganesh Natrajan, CEO, Zensar Technologies and former chairman of NASSCOM; Siddharth Pai , Partner and Managing Director, TPI; Raman Roy, CMD, Quattro; Arun Maira, Senior Advisor, Boston Consulting Group; and Josey Puliyenthuruthel, National Corporate Editor, Mint.

CNBC-TV18 shares with domain-b, its interview transcripts

The bids will be open on Monday, what do you think will be the endgame for Satyam?  
Raman Roy: I think it is exciting that there are bidders who are willing to bid for the company as it exists today because there are liabilities, there is the unknown. While I do believe that there is a robust business around it - there are good things and bad things - I think the endgame is: Satyam going with somebody who can take it to bigger aspirations, bigger ambitions. That can be very exciting for Satyam, its customers, its employees, everything put together.

Last week, the board actually clarified some procedures as far as the game process was concerned: it said that if there is a 10% differential between top two bidders, then an open auction will take place. What do you think is likely to happen? Do you actually envisage the scenario where we are going to go through that open auction round?
Roy: I do not think it will be a prolonged bidding game because the amount of unknowns and the fact that some punt has to be taken by the bidders is pretty evident. In my opinion, what the board is doing is trying to find out is: what would be the right suitor for the strategic objectives that the board has set out - (with respect to clauses like) that for three years, nobody can break up [the company] and sell pieces and so on. They are trying to avoid somebody coming in and doing the equivalent of asset stripping with Satyam, so that it takes Satyam to the next level and next heights because that is the kind of thing that its customers are looking for, that is the kind of thing that its employees are looking for. The way I look at it is that the government moved in this board to protect the interest of the employees, to protect the interest of the customers. 

A report by Forrester recently says that it's in the interest of Satyam's clients that a pure-play technology company wins the race rather than a private-equity fund. Do you subscribe to that view?
Roy:  The fact that it is a private equity player or a pure play company is from my perspective not that relevant and what is relevant is that what they intend to do. Even if it is a private equity guy, if they intend to grow the business, put the right management team in place, have a strategic objective of growing the business, it would look and behave the same way as a technology company investing in it because I guess what Forrester said was where the objective of the buyer link in with the objective of what Satyam is trying to achieve. That would be what would be the right thing to happen. So I don't think where they come from, maybe the thinking is that it shouldn't be an asset stripper.

So do you actually think a winner will emerge on Monday?
Siddharth Pai: I certainly hope so. The board has done everything so far in order to make sure that the constituents by the stakeholders are actually protected, so primarily the employees and the customers and now if we have some clarity on who the owner might be, then the third stakeholder community, which is the shareholders, will also have some clarity into what's going to be happening in future. So, I certainly hope we come up with a clear answer on Monday.

Are you confident that a winner will happen on Monday, we were talking about this Forrester report that also talks about this perhaps this entire process falling through, so if that happens do you think there is a Plan B for the board, per se?
Josey Puliyenthuruthel: That's for the board to answer but I would have been far more comfortable if there were more bidders in fray for the Monday's decision. From what we hear, there are going to be just about three bids that are going to be there and don't forget that this is going to be a bargain deal for whoever buys it, the company has been valued at around USD 7 billion before Raju's December 16 statement and today its valued around USD 800 million. So even if you assume your liabilities are a couple of billion dollars or perhaps more, it still is a bargain deal for anyone who is buying. But I hope they do have a Plan B because in interest of shareholders, other speakers in this panel have been talking about, the interest of customers or employees, I would certainly like the interest of shareholders to be protected.

Of the names that are in the bidding game so far, L&T, Tech Mahindra, who do you think has the best chance for winning?
Roy: I don't want to get into any kind of a controversy by naming somebody but I think it would be somebody where there is a strategic objective tie in and among the bidders, again as an observer I would say there are two-three of them where their strategic objectives would time very well.

We have been speaking with experts and analysts and the sense that we are getting is the potential bidder should actually be looking at future prospects of Satyam in terms of business, do you think that will play a considerable part in terms of how the potential bidders are valuing Satyam?
Pai: Absolutely yes. At the end of the day, they are acquiring a book of business and more than anything else it may be a distressed book of business because of what's happened to it in the last several months, specifically because some customers have chosen to exit Satyam as a supplier for them but at the same time, what the potential acquirers are looking for is that book of business, and some of it is bound to remain stable over a period of time and it's the acquisition of that book of business and the future profits from that book of business that's of most interest to a strategic enquirer.

After the new owner does come into place, what do you think will actually happen to the existing management of the company? You have got the interim CEO A S Murty and his team in place. He put out a 30-60-90 day plan, what do you actually expect to happen?
Roy: My heart goes out to those people because while you and I talk about who the bidder would be, the guy sitting within the company have the next step to say what will happen to me because depending on what the strategic objectives are: whether you fit into those strategic objectives, whether those positions are considered critical positions where the buyer will bring in somebody from outside. I guess the team will undergo a little more uncertainty than just determining of the buyer.

What do you think will happen to the existing team once the new bidder comes in?Ganesh Natrajan: I go back to the fundamentals, if you are good at what you do, which is selling, delivery or leadership, I do not think anybody has anything to worry about. If somebody is on the bench and the company is also going through its own slowdown period, it will be an issue.  But good people [will have] no problem. I think a good management coming in and taking over will infuse lot of confidence in all the performance of the company. So I will not worry if I were a good performer.

We have seen some clients leaving; there has been some client attrition since January. To your mind, what would be the big challenge for the new suitor, in terms of being able to retain clients and bring in new business?
Pai: What they will be focusing on they can stand the tide in terms of clients who are leaving Satyam, so in that instance it could come back to making sure that the assets don't leave the door so speak and the assets are the people with the knowledge, so the first few things that the winning acquirer will have to focus on is to make sure that the key employees are retained, some of the better performing people who are in the positions, so the service to the clients itself is not interrupted. After that is done, from a client's perspective, all they are looking for is for a continued smooth operation of something that they have already outsourced to Satyam, so anything that a buyer can do in order to allay client's fears in terms of a further churn or attrition and further issues with respect to the people who are actually performing the work will be the key and after that only can they go about the business of new client acquisition, to turn around and to be able to say that they have a new stable of people who they can use or new set of skills that they can use, it will be tough to sell in market place until they can prove that they have stabilized the existing clients to start off with.

What would be the biggest challenge for the buyer, would it be reposting confidence in the minds of clients and employees or handling the legal mess that the company finds itself in?
Roy: I think there are three stakeholders to any kind of a transaction in a corporate world; it is the investors and the linked liabilities and ensuring that you have the arms around it and not closing everything but having your arms around it is critical, it's the customers and the employees, so getting that put together in terms of what the customers or the employees need and what happens to the balance sheet and liabilities, you have to run these simultaneously and you cant say that today I will look after the customer and other things and today I look at the liabilities etc, it's a complex task and a huge one but a lot of people will be up to that task.

[Spice Group Chairman] BK Modi has raised the issue of more transparency but given the fact that the interested parties have been given access to the data room and confidential data like client information, geographies, billing etc, so where does the question mark on transparency to your mind lie?
Puliyenthuruthel: Mr. Modi has talked about liabilities of around USD 500-800 million but that's his personal view, it would be nice to get a set of investment bankers telling you about liabilities because Satyam has a bunch of lawyers and the other side also has some, so they have some sense of the liabilities likely to be so that to my mind its easy to say that, pick up on the assets basis but when I don't know what the risk is really going to be out there, it would be nice for the board to put forward a view without legally binding saying what are the liabilities going to be. That is really going to guide the valuations.

I was speaking with someone earlier today, look at the USD 7 billion company valued as late as December and deflate that valuation by half, USD 800 million of liabilities, and inflate they by twice, so then you have about USD 2 billion valuation out there and it will be nice to get somebody to put some kind of sanctity to these numbers that are just made out before you.

By Monday we should probably know who the winner is. Do you think the brand Satyam will exist?
Roy: I think we will talk about it on Monday depending on who the buyer is. If the buyer is a bigger brand, the Satyam brand will sunset into that brand and if the buyer has got a brand that is not as strong as Satyam, Satyam may grow. It depends which way the customers are looking at it. What is very critical is, how in the next six to nine months is how we treat the customers out of Satyam because that is where the brand where were it is today the next six months for that brand is very crucial.

As we have been saying right through this, since December what we have seen unfold is been a corporate scandal that corporate India has never seen before. There have been question marks on the role of the auditors, role of the independent directors. What your mind will be the biggest lessons learnt from the entire Satyam episode?
Arun Maira: I think there has been an inability and this is not just being Satyam. this is a pretty universal inability to distinguish the builder from the institution.  The builder begins to be seen as like the complete owner of the institution. This unwillingness or inability to distinguish the two is not merely the initial big builder but also in the people around the builder. Thus you get people saying that this person has really created this company, this person's initiative, this person's efforts, this person is, in fact, the brand of that institution. This person can not be doing anything wrong for the company, cannot hurt the company, after all it is this person's baby.

So we have this belief that the people who are around this builder in that institution also. I have noticed this in Satyam as we were engaged and listening to the mangers within Satyam. Did you know this was happening? How could this have happened? I think owners and builders of institutions recognizing that this is a dynamic, should in fact ask for tighter scrutiny. Ask the institutions around them, which are put in place to ensure good governance.

Your final comments in what do you think that the lessons learnt from the Satyam episode?
Natrajan: I would totally agree with what Arun just said. Sometimes the larger-than-life patches the founder or promoter tends to obfuscate some of the main issues, One point I would like to make is: I know we keep talking about how low can the valuation get, I think it is important to remember the ever since that horrible day when Raju wrote that letter, this company has been handled by many of us. I have personally spoken to customers of Satyam in UK and the US. I think what it is today is a lot of customers are still sticking in there is important and they will build it.

I would not worry about the brand. It really does not matter in the service industry, whether the Satyam brand exists or not but if this new buyer comes in, makes sure that the cream is protected both in terms of the customers and employees, the lesson learnt is you can rebuild it from there. I would not worry about what has happened in the past. They should get this process done hopefully Monday, if not Monday, in a week's time. Give confidence to all the stakeholders and get on with the business. As Arun rightly said, make sure that such things never happen again in an institution of this size.