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Satyam still among top 5, says MCA official

This article was posted on Apr 10, 2009 and is filed under Press Releases

Maytas Infra appoints K Ramalingam as chairman and Anil K Agarwal on the board

Satyam Computer Services Ltd continues to retain its position among India’s top five software service providers, according to a senior Ministry of Corporate Affairs (MCA) official.

The employee strength of the Hyderabad-based information technology firm was around 50,000, even three months after its founder, B Ramalinga Raju, confessed to manipulating the books of accounts, said the official, on condition of anonymity.

“Satyam continues to have strong revenues. The difference between its turnover and the next highest is around 10-15 per cent,” he said. He did not disclose his idea of the revenue and net profit saying it would interfere with the ongoing process for selling a strategic stake in Satyam.

Based on the data available, HCL Technologies, which was the fifth-largest IT firm before the scam-hit Satyam, recorded a revenue of Rs 4,860 crore in the July-December 2008 (refer table). So, 10-15 per cent less than HCL means Satyam’s turnover is Rs 4,100-4,400 crore. At this turnover, Satyam’s top line has dipped by only 1-7 per cent compared with the year-ago period (July-December 2007).

Tech Mahindra, which is in the race to pick up a stake in Satyam, is a distant sixth, with a turnover of only Rs 2,297 crore in the six months ended December 2008.

After the government-nominated directors took control of the board of Satyam, two audit firms — KPMG and Deloitte — were asked to restate the accounts of the company. While the two audit firms are expected to take six months for the job, the companies that have evinced interest in picking up a stake in Satyam are being given restated accounts for six months ended December 2008.

However, the restated accounts are not available for January-March 2009, the critical period after Raju’s confession and the government taking control of the company. The official said Satyam had performed well in January and February by operating without taking bank loans, adding that client churn rate was not abnormal

On employee numbers, the official said it had come down only to 50,000, from 53,000 when the crisis hit Satyam.

The financial bids for acquiring a strategic stake in Satyam will be opened on April 13. Larsen & Toubro, India’s largest private engineering firm, and Tech Mahindra, are reported to be in the fray. If the difference between the top two bids is more than 10 per cent, the name of the winner will be announced the same day. If it is lower than 10 per cent, an open auction will be conducted.

Maytas Infra, the company promoted by the kin of the disgraced founder of Satyam, today said it had appointed K Ramalingam and Anil K Agarwal as directors on the board of the company. In a filing to the Bombay Stock Exchange, Maytas said Ramalingam would also be the chairman on its board.

source: Business standard

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