Satyam Saga Part VI - What next !!!
With 2 class action suits ( aka Mass Tort ) nobody will touch Satyam even with a barge pole. The breath and depth of the damages of the litigation is unpredictable. Most of the assets of the company are intangible. Also nobody know the extend of damage caused by Raju and his criminal chums. The kind of cases registered on Raju covers the entire major crimes in the Indian CrPC including forgery and use of forged documents. ( these are 2 different but related crimes )
With Mass Tort the awards to the ADR holders may be a few thousand dollars or a few million dollars each. Depending on how the courts in US treat this case which may take at least 2 years to end will be a traumatising wait. Satyam cannot survive so long which is for sure. GoI will not pump in any funds into Satyam since its unprecedented in independent Indian history. So this option is ruled out. But the 52 K employees and the shareholders of Satyam cannot be ignored atleast in the present economic circumstances.
The only viable & unvercelly acceptable solution will be for GoI to offer sovereign indemnity to possible suitors from the Mass Tort in the US and do a thorough due diligence and get any other respectable auditors arrive at a reasonable valuation for the company and palm it off to L & T Infotech.
L & T will not be a willing acquirer but a reluctant one since with all the damage to Satyam's reputation retaining employees and customers will be major challenge for the new owners. L & T will not merge Satyam with itself but will retain Satyam as a seperate company but as a subsidiary for a long while to come. A US $ 2 billion company merged with L & T will bring down the market cap for the parent i.e. L & T which nobody wants now. The saga continues.
With Mass Tort the awards to the ADR holders may be a few thousand dollars or a few million dollars each. Depending on how the courts in US treat this case which may take at least 2 years to end will be a traumatising wait. Satyam cannot survive so long which is for sure. GoI will not pump in any funds into Satyam since its unprecedented in independent Indian history. So this option is ruled out. But the 52 K employees and the shareholders of Satyam cannot be ignored atleast in the present economic circumstances.
The only viable & unvercelly acceptable solution will be for GoI to offer sovereign indemnity to possible suitors from the Mass Tort in the US and do a thorough due diligence and get any other respectable auditors arrive at a reasonable valuation for the company and palm it off to L & T Infotech.
L & T will not be a willing acquirer but a reluctant one since with all the damage to Satyam's reputation retaining employees and customers will be major challenge for the new owners. L & T will not merge Satyam with itself but will retain Satyam as a seperate company but as a subsidiary for a long while to come. A US $ 2 billion company merged with L & T will bring down the market cap for the parent i.e. L & T which nobody wants now. The saga continues.
Labels: Raju, Ramalinga Raju, Satyam, Satyam Computer Services
0 Comments:
Post a Comment
<< Home