[srishiva]

Why is L&T so bullish about Satyam ? Well they are publicly traded right ? Some individuals seem to make all the decisions while the majority of stakeholders are mute.
Even in the U.S financial companies (the board members to be specific) are doling out billions in bonuses while everyone is suffering.

[Mission_Safari]

Originally Posted by BaCkSeAtDrIVeR

Hmm... Not sure that I will buy that argument.

Not all of the remaining 10K would be non-Indians, right?

Put it in a different way. Most (at least, a significant number) of the off shore employees would have been sent after a stint in India, right? What happens to those account? Not every body would simply close those PF accounts - mostly because they would be planning to come back.

Direct hires at locations other than India for its offices at foreign locations
contribute to this count significantly. Also this count of 43K doesn't include Satyam BPO, Satyam Venture and other acquired companies outside India.

[akroy]

Originally Posted by BaCkSeAtDrIVeR

Hmm... Not sure that I will buy that argument.

Not all of the remaining 10K would be non-Indians, right?

Put it in a different way. Most (at least, a significant number) of the off shore employees would have been sent after a stint in India, right? What happens to those account? Not every body would simply close those PF accounts - mostly because they would be planning to come back.

This is what all Satyamites received as part of our daily update:

Dear Associates,

This is just a quick note to specifically clarify yet another of those inaccurate & misleading media reports: Today’s issue of Times of India had headlines stating that Satyam’s headcount is ‘only’ 43,622, as they had established from the Provident Fund Office (PFO). This is yet another example of a sensationalistic headline with incomplete/inaccurate facts! They have totally missed noting (deliberately, or otherwise!) that this does not include direct onsite hires in other countries (who do not need to contribute to PF in India), Satyam BPO, Satyam Venture, Satyam Shanghai, Satyam Nanjing, Citisoft, Bridge Consulting, Satyam-Egypt, S&V-Belgium, among others! With all of those taken into account, our team has established that our initially stated headcount numbers are indeed reliable. (As some of you had noted, we now have yet another reliable source – the PFO – to thank for validating our original numbers!)

Several of you have already identified the gaps in media reporting and have been asking our HR and GMC teams as to why a strong rejoinder is not being sent to the errant publications. As mentioned in one my earlier updates, please rest assured that this is being done in a consistent and professional manner, rather than as an emotional reaction.

We are energized by your loud declaration of faith in Satyam’s capabilities, and are confident of this single factor helping us overcome current challenges very quickly!

[HappyWheels]

So, guess Spice & iGate are out of the rat race.

There is also a news item that a team within Satyam is looking at identifying the top key 100 employees who needs to remain in the company even after the April end take over (by the winning bidder). Now, why do that? Retaining of old customer???

[diabloo]

Raju disclosed only part of Satyam fraud:CBI chief and would like to subject Satyam Computer's disgraced founder Ramalinga Raju to a lie-detector test.

"The fraud involves an amount that is much bigger than the Rs 7,800 crore (Rs 78 billion) estimated originally. It could be close to Rs 10,000 crore (Rs 100 billion) based on over 7,000 fake invoices and forged documents retrieved by the agency. "

[Thad E Ginathom]

They are trying to raise finance by selling a 50% stake in the company, I think.

1. Doesn't that make devalue existing shares by half?

2. How much is a ravaged penniless company worth?

Still... I suggested to my wife to buy a few shares just in case the phoenix does rise from the flames.

[Ravveendrra]

Revived by Diabloo & Thad - thanks guys.

The Satyam saga has fascinated me since Dec/Jan. Yes, you read the December right. It began with the other Raju, founder of Nagarjuna Finance being arrested.

I wonder what the CBI & other investigating agencies will do now. They have found fake invoices raised by Satyam - this means that Satyam never received the money. Out go the cases of misappropriation, siphoning off money, stealing from company etc. It is pretty simple - if Satyam never received the money - nobody could have stolen the money from Satyam - right? Someone can only steal what Satyam had. The fictitious FDs were shown in the books to counter-balance the fictitious invoices.

Dishonest? Yes. It is a case of a company desperately trying to grow. To get fresh orders they have to project themselves as bigger than they are. A case of window dressing gone too far. Perhaps the serious fraud office, CBI etc. will now try to make out a case that the fictitious invoices led to the share price going up (beyond Rs.500/-) but for any fraud or cheating case to stick, they will have to prove that the manipulators did it with criminal intent to defraud people who bought shares from them. (The other technical defaults under the Comapnies Act, SEBI regulations, listing agreements etc. might stick.)

Coming to the company itself. I think it is a good gamble to buy at present price below Rs.50/-. The company has no liabilities other than current operating expenses like salaries, rents etc. No term loans.

After much shouting from the roof-tops (particularly Times of India) about employee numbers being inflated, seperate audits/headcounts etc. have shown that the company does have about 50,000/- employees. For a company in the service sector, it's employees are it's main or only resource and real assets. This is also one reason the caretaker board have specified that 100 identified key employees cannot be fired by the new owner - firing these guys might cripple the company and justify subsequent asset stripping by the new owner. The other is that it will calm the employee's fears and encourage them not to ditch the company.

The company is feeling the effects of the double-whammy of the recession and the scam. It does however have orders on hand and is functioning.

For the new owners - the structure of the deal is that new shares (I think it is 20%) will be issued at a price relevant to the market price. The new owners will have to make a public offer to purchase an equal number of shares from existing share holders at a pre-determined price. The cash being brought in via the issue of fresh shares should suffice to meet the working capital needs of the company. The public offer to enable the new owner to acquire upto 51% of the enhanced share capital is more to give an exit route to existing share holders who wish to sell their holdings.

The guys we should feel sorry for, are the ones in various government departments / agencies who were planning visits - to Europe, Malaysia, Japan, USA and Mauritius this summer to 'investigatge' the fraud. Poor chaps, it seems they will not have the opportunity to cross-examine the girls on the beaches of the South of France and Mauritius and confirm that the bikinis they are wearing were bought using Satyam money. All is not lost though, maybe a visit to Siberia this winter - one can always investigate whether the 'disgraced' people had bought bear skin coats there.

Thad - I think your wife will thank you for the tip. Let her hang in there. Most investors, bankers, analysts etc. are of the opinion that Satyam will metamorphasise into something else in about three years. Their take is that it will no longer bear the same name and will be in different businesses. The new owners too will bring their own brand & goodwill to bear on the business of Satyam.

Cheers,

[Thad E Ginathom]

We have lost lakhs of our small life savings... what is a few thousand to risk on something like this? I think that if it is done on the basis that (if I ever do; prefer not to) I lend money to friends: getting it back is a bonus!

So yes; we'll take the tip. Wish we'd done it a while ago of course.

The biggest worry is how deep the rot goes. One of the initial reactions to the scam breaking was that, in a big corporation, one man, or even a handful of men, could not push through this stuff without other staff being aware, or at least suspicious. That has to be a bog concern for new investors big or tiny.

I guess that, rather like a long-haul flight, once the excitement of take-off is over, things seem to happen only very slowly with this sort of story, on both the investigation/prosecution and the rebuild fronts.

There may not be too much to comment on in immediately coming days, but the insight of those posting to this thread has been great, so keep it coming!

[carboy]

Originally Posted by Ravveendrra

Dishonest? Yes. It is a case of a company desperately trying to grow

Don't try to defend the indefensible.
Raju is worse than pond scum. He is one of the biggest chors.

[Ravveendrra]

Originally Posted by carboy

Don't try to defend the indefensible.
Raju is worse than pond scum. He is one of the biggest chors.

@ carboy: Seems that you have some information that we have no knowledge of.

The state police, the CBI, the SEBI, Serious Fraud office etc. who have been investigating the affair since January have not been very forthcoming on the siphoning off or stealing of money. If they were, then I too would have called the Raju a 'chor' instead of 'badmash'. All they have disclosed is that invoices have been inflated. It would be nice if you share the information that you are privy to.

My post, (which you have extracted in yours) is my conjecture on the basis of information available in the public domain including the link provided by Diabloo. I am not related to Mr. Raju nor is he my friend, I therefore have no reason to defend him or Satyam.

Cheers,

[carboy]

I consider Choralinga Raju to be worse than pond scum, Telgi, murderers etc. I hope he is paraded naked through the country as part of his sentence. I hope he gets life imprisonment. I hope he has the same fate as Ken Lay. But most probably, he will get away with less, because he has bribed practically every cop & politician in his vicinity

[srishiva]

Originally Posted by carboy

I consider Choralinga Raju to be worse than pond scum, Telgi, murderers etc. I hope he is paraded naked through the country as part of his sentence. I hope he gets life imprisonment. I hope he has the same fate as Ken Lay. But most probably, he will get away with less, because he has bribed practically every cop & politician in his vicinity

Isn't the investigation kind of Govt vs Raju? So it all depends on what the govt wants to investigate and what charges they want to file against Raju. It doesn't look until now that there is any serious charge/investigation going on against Raju.
OTOH, the government has appointed members to Satyam board and all are just content to make sure satyam survives (which is a good thing).

[H3LIOS]

Originally Posted by Thad E Ginathom

They are trying to raise finance by selling a 50% stake in the company, I think.

1. Doesn't that make devalue existing shares by half?

2. How much is a ravaged penniless company worth?

Still... I suggested to my wife to buy a few shares just in case the phoenix does rise from the flames.

I don't think they will issue new shares so there will not be any further devaluation of the shares (if they still have any value left). What will happen, I think, is that the board will accept a purchase price and the Financial Institutions and other major shareholders (who are on the board) will divest their holding in the company at that price - so effectively giving up control to the buyer. They may even invite small-investors who are willing to sell their shares at the offer price.

Remember when the initial shock came and the share price tumbled to below Rs 10? A friend picked up a couple of thousand shares then and made a small bundle when the priced bounced back to Rs 35+ after two days.

Cheers.

[Thad E Ginathom]

Of course I'm regreting having missed that chance!

But... the company needs working capital to prevent it from collapsing. Shareholders selling shares, whether institutional or personal, does not raise money for the company, it just shifts shares (and control) around.

[carboy]

Originally Posted by srishiva

Isn't the investigation kind of Govt vs Raju? So it all depends on what the govt wants to investigate and what charges they want to file against Raju. It doesn't look until now that there is any serious charge/investigation going on against Raju.

There won't be. Everyone has taken money from him, he is too big a chor to go down.