Calling Satyam [ Get Quote ] a "weeping orphan", the Company Law Board (CLB) on Thursday said the Hyderabad-based company will now be adopted and nurtured by Venturbay, a subsidiary of Tech Mahindra [ Get Quote ].
Preferring to call its order as "Adoption of Orphan Satyam" or "Orphan Satyam Adopted", CLB chairman S Balasubramanian said, having won various laurels, mostly in relation to corporate governance, Satyam "became a weeping orphan overnight when its promoter B Ramalinga Raju [ Images ] [ Images ] abandoned it after making a confessional statement."
Satyam's founder Raju abandoned the company after admitting accounting fraud to the tune of over Rs 7,000 crore (Rs 70 billion) on January 7, said the CLB order while clearing the decks for takeover of the company by Tech Mahindra.
Complimenting the government-nominated board for selecting a technically and financial competent strategic investor, the CLB chief said, Venturbay will "adopt and nurture ailing Satyam."
Earlier, the order said, the government reconstituted the Satyam board "to wipe out its (Satyam's) tears and nurture the company which was necessary in the interest of all the stake holders".
The government-appointed board headed by Nasscom past president Kiran Karnik, the order said, "acted not only as directors but also like foster fathers to heal the wounds of the orphaned Satyam."
The Company Law Board approved Tech Mahindra's proposed acquisition of a 31 per cent stake in Satyam Computer and asked the buyer to deposit Rs 1,756 crore (Rs 17.56 billion) for the deal by April 21 in a designated account.
The CLB, in its order, also asked Tech Mahindra to nominate a maximum of four directors on Satyam's board after depositing the required capital towards the stake purchase.
It said that Venturbay Consultants Pvt Ltd, a subsidiary controlled by Tech Mahindra, shall deposit Rs 1,756 crore for 31 per cent equity shares in Satyam in the escrow account by April 21, 2009.
CLB Chairman S Balasubramaniam said that on deposit of the amount by Venturbay, the Satyam board will be authorized to issue and allot 30,27,64,327 equity shares of Rs 10 each at a premium of Rs 48 per share to Venturbay.
In the order, the CLB further said that "after allotment of 31 per cent shares on preferential basis and funding the escrow accounts in full in cash towards 20 per cent public offer by Venturbay, it will have the liberty to appoint four nominees as directors on the Board of Satyam."
However, the present six directors of Satyam appointed by the government will continue till further orders.