The Hindu : Business : Staff buy shares in a bid to save Satyam management

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Tuesday, Jan 06, 2009
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Staff buy shares in a bid to save Satyam management

A. Saye Sekhar

To empower them to have a say in the management in the event of a hostile takeover.

HYDERABAD: The employees of Satyam Computer Services have bought at least one crore shares in the last few days, following an “unofficial advisory” from the Resource Coordinators Committee (RCC) of the company.

Company insiders said that an “advisory” mailed to the staff on December 31, 2008, suggested that if each “Satyamite” bought 100 shares during the trading hours on January 2, the total number would add up to 50 lakh shares which would be close to one per cent. This would empower them to have a say in the event of a hostile bid by anybody to takeover the management. However, the sources said that many employees began purchasing the share on the day when it touched Rs. 120. Employees with higher financial resources have invested more and bought higher number of shares. Roughly, the staff may be holding about one crore shares and there was no surprise even if they together held two per cent shares (about 1.34 crore shares).

Share movement

Meanwhile, reports suggesting that the company was in touch with smaller players with a proposal of “merger” impacted the company scrip, which dived six per cent to close at Rs. 166.90 after it opened on a high note at Rs. 180. Of course, the reports were brushed aside as “speculative” by at least a couple of companies.

Unconfirmed reports said that the Satyam management was in touch with another major company in its effort to salvage itself from the brink.

Satyam on Monday released a press note quoting a Forrester Research report about the company’s innovation strategy and calling others to “emulate Satyam by unleashing and harnessing their firms’ grassroots creative energy.” While the press release quoted a report published by Forrester on December 18, 2008, (a day after the company reversed its decision to acquire Maytas Infra and Maytas Properties), Forrester warned Satyam’s customers to “review their dependence on Satyam and ensure that they have strong contingency plans and change of ownership clauses in the event that Satyam is acquired or the fallout from this serious misstep affects the firm’s ability to compete long-term.”

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