Moneycontrol » News » Business » Business News

Satyam: Three independent directors resign

Published on Mon, Dec 29, 2008 at 16:22 | Source : CNBC-TV18

Updated at Tue, Dec 30, 2008 at 08:57

100654 Investors following Mahindra Satyam. Share this News with them.

Share on Tumblr

The latest twist in the Satyam saga is that the beleaguered tech giant confirmed the resignation of three more independent directors from its board. This cames hot on the heels of the announcement of the reschedulement of the board meet to January 10.

Satyam confirmed the resignation of two more directors, Krishna Palepu and Vinod Dham who resigned with effect from December 28. Later in the day, the tech giant also confirmed the resignation of another independent director - Rammohan Rao, also the dean of Hyderabad-based business school ISB - but refused to give a reason.

Earlier, Satyam has rescheduled its board meet to January 10, 2009. The board will consider additional strategic action. The IT major has appointed DSP Merrill Lynch as an outside advisor. The board on January 10 will consider measures to strengthen governance structure and consider increasing size and altering the board composition. Its board will also address issues from possible promoter stake dilution.

SRSR Holdings pledged entire holdings over a period of time since September 2006. SRSR Holdings is the promoter company of R Ramalinga Raju. Promoters said that the institutions may have sold stake to cover margin calls.

Satyam board directors will consider issues including dilution of stake on January 10. SRSR holdings had 5.57 crore shares amounting to 8.27% stake. Total promoter shareholding on September 2008 stood at 8.6% stake.

Also Read: Satyam promoters pledge stake, board meet on Jan 10

Here is a verbatim transcript of Sajeet Manghat's comments on CNBC-TV18. Also watch the accompanying video.

Satyam promoters have placed the entire stake of 8.27% over a period of time since September 2006, about 5.57 crore shares have been placed with various financial institutions or financers and now that the stock prices have come down, these pledge shares are calling for additional margins. As a result of that it seems there is a financial crisis which is growing with the Satyam promoters and they are not able to put in additional margins, so the institutions are now selling in the market.

We have a case of last week when IL&FS sold nearly 60 lakh shares. So, it's likely that the entire stake is up for sale and it might be having a remote possibility that the Satyam promoters might not land up in any stake. Same way Orchid Chemical's stake got sold in the market because of margin calls.

Today we have confirmation of two board directors Krishna Palepu and Vinod Dham - both renowned international figures resigning from the board and that too before the board meeting happened.

On January 10 the board has to be reconstituted and then thereon they have to take on the issues. Currently, the board is equally divided into three independent and three management people and it needs to be reconstituted on January 10 before they can take it further with other issues. But as far as Satyam management or pormoer stake is concerned, we need to know how much stake has fallen because some of the buzz which is there in the market is that the stake might have come down to as low as 3.5%. We don't have confirmation of that but this is the buzz which we are getting from the market.