Tech Mahindra, the new owner of the Satyam Computer Services, bought shares of the Hyderabad-based software exporter within days of its disgraced chairman Ramalinga Raju admitting to perpetuating an accounting fraud.
Sources said Tech Mahindra bought 1.21 crore of Satyam shares for a total investment of Rs 65 crore as “part of treasury operations”. It started buying shares from January 7 at an average cost of Rs 55.79 apiece, they added. The company sold all the Satyam shares at an average price of Rs 50.69 apiece, incurring a loss to the tune of Rs 7 crore.
A source in Tech Mahindra said the company sold its entire portfolio in Satyam before the bid conditions were announced. When contacted, Tech Mahindra CFO Sanjoy Anand declined to comment. The bid conditions stipulate that the bidders will not be allowed to sell their holding in Satyam for the next six months. It means that the 12% stake of Larsen & Toubro, which lost the auction of Satyam to Tech Mahindra, will now have a six month lock-in.
Satyam Computer founder and chairman B Ramalinga Raju had resigned on January 7 after disclosing that the company’s profits had been falsely inflated for years and assets overstated. This sent Satyam’s shares crashing by nearly 80%.
Source: Economic Times