CLB allows Satyam to start auction for stake sale
19 Feb 2009
The Company Law Board today granted permission to the board of the distressed IT firm Satyam Computer Services to conduct a public auction for inducting a strategic investors and to raise its equity base.
The CLB decision, taken after hearing a petition filed by Satyam yesterday, would pave the way for bringing in a new owner at Satyam Computer.
Satyam had sought CLB's permission to conduct a public auction for getting the much-needed funds to ensure its uninterrupted operations. The CLB ordered that the company conduct an open and transparent auction process for inducting a strategic investor.
CLB also authorised the company's board to make allotment of preferential shares and raise its equity capital by 50 per cent from Rs160 crore to Rs240 crore.
The company also sought permission for immediate capital injection as it said many of its key clients and staff have threatened to quit.
Engineering major L&T, B K Modi Group and the Hindujas are among those who have evinced interest in acquiring Satyam.
The CLB also directed the government to issue notices to Maytas Infra and Maytas Properties to present their cases in response to the caveat the two firms had filed last week against any ex-parte decision by the government.
Yesterday, the government had moved the CLB to supersede their boards but the CLB could take no action due to the ex-parte caveat. The two companies, which plan to contest the decision, will get a chance to present their views on 24 February, after which the principal bench of the CLB will take a decision.