Wednesday January 21, 2009

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By Sam Devraj  ( Assistant Editor )

Satyam's former chairman B Ramalinga Raju

BUYERS have begun to circle beleagured outsourcing giant Satyam Computer Services Limited, which has been fighting for its future since founder and former chairman B Ramalinga Raju confessed to a $1bn fraud on January 7, media reports said. Tarun Das, a member of Satyam's new government-appointed board of directors, told reporters yesterday that the company has been approached by suitors from India and abroad. "We have been approached by potential buyers," Indian press quoted him as saying. "It is a very strong company," he said. "The board has not yet discussed the issue of looking for a buyer." Aegis BPO Services Limited, the back office unit of India's Essar Group, has expressed interest in carving out Satyam's back office arm, but has not made a formal offer, Aegis chief executive Aparup Sengupta said by phone yesterday. "We've expressed our interest in the form a letter to the board of Satyam," he said, adding that the letter was delivered last week. "There is no offer we have put," he added. "We need to understand the company more. There has to be due diligence." Raju said he had cooked Satyam's books for years, and the company's auditor, Price Waterhouse, the India unit of PricewaterhouseCoopers, has said that its audits are unreliable because they hinged on potentially false company data. Aegis, which had revenues of $450m last year, has completed 11 acquisitions in the last three years. Last year it acquired the India call centre of Time Warner Inc.'s AOL and Los Angeles-based services company PeopleSupport Inc. Aegis has nearly 30,000 employees and over 60 clients, including American Express, AT&T, and Vodafone. Its parent company, the $50bn Essar Group, has interests in telecom —through a joint venture with Vodafone_as well as steel, shipping, oil, power and construction. Indian media reports have also fingered Larsen & Toubro Limited, one of India's largest engineering conglomerates, as a potential suitor. A Larsen & Toubro spokesman declined to confirm or deny those reports yesterday. Larsen & Toubro owns 4 per cent of Satyam stock and has a software services and back office subsidiary called L&T Infotech, whose clients include Chevron, Hitachi, Sanyo, and Sunoco. Satyam's board will hold its next meeting on January 22 and 23.

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