New Delhi: The Company Law Board on Thursday approved the strategic sale of Satyam Computer Services to Tech Mahindra, and directed the consideration of Rs.1,756 crore for a 31-per cent stake be submitted by April 21.
Tech Mahindra, which is acquiring Satyam through its subsidiary Venturbay, has also been allowed to make an open offer for another 20 per cent stake at Rs 58 per share in India's fourth largest software exporting company.
"I accept the recommendation to induct Venturbay as the strategic investor," Company Law Board chairman S Balasubramanian said in his five-page order.
He said he was convinced that the acquiring firm will nurse the ailing Satyam and hoped "by adopting the best corporate governance practices, Venturbay would, over the years, make Satyam to regain its glory in real terms".
The other salient points of his order include:
- Lock-in period of three years for shares acquired by Tech Mahindra
- Bar against disposal of assets for two years without shareholders' nod
- No change in management control of Venturbay for three years
- Permission to acquiring company to nominate four directors to Satyam board
- Existing six government nominees to continue till further orders
- No retrospective civil, punitive action against directors named by Venturbay
- Time till December 31 to file six years of audited results of Satyam
Balasubramanian titled his order Adoption of Orphan Satyam and observed that the once "healthy and smiling company" had became a "weeping orphan" overnight because of the fraud perpetrated by its founder, B Ramalinga Raju.
The government-appointed board of Satyam had on Monday named Venturbay winner of the auction to sell a majority stake in the IT bellwether, just three months after it got entwined in corporate India's worst frauds.
Engineering major Larsen and Toubro and Wilbur Ross were the other two bidders, with the B K Modi-owned Spice group having withdrawn from the bidding process earlier.
The global competitive bidding process, initiated March 9 in accordance with the Company Law Board and the markets regulator Securities Exchange Board of India (SEBI) was supervised by former Chief Justice of India S P Bharucha.