In this case (Satyam), once the framework is finalised by the government-appointed board in consultation with the Company Law Board (CLB), Sebi is unlikely to change the proposal, a top Sebi source said on Friday.
The Sataym board is understood to have finalised the road map to conduct the bidding process for the beleaguered IT major at its board meeting on Thursday and is expected to submit the proposal to Sebi soon for getting regulatory clearances. With a view to facilitate the takeover process, Sebi recently amended the takeover rules for companies having a government-appointed board, besides making the preferential issue norms more flexible.
The amendments in rules (pertaining to takeovers and preferential share issues) have given considerable power to Satyams board and once it zeroes in on a bidder, that choice will, in all likelihood, be considered final by Sebi. This is a special case, the source said.Sebi is expected to consider the proposal, expected to be submitted soon, at its next board meeting, the source said.
It is also in consultation with other regulators including the US Securities and Exchange Commission (SEC) and in other jurisdictions where Satyam has shareholders, the source said. The regulator is acting in consultation with other regulators considering the fact that Satyam has shareholders in other jurisdictions as well, the source said.
Satyam board is understood to be working towards completing the bidding process in the next three weeks. Several suitors including B K Modi-headed Spice Communication, the Hinduja Group and engineering major, Larsen and Toubro, have expressed their interest in taking over the Hyderabad-based company.
The board also expects its auditorsKPMG and Deloitte to restate the companys accounts by end-March that will also help to quicken the bidding process.
Satyam plunged into a crisis on account of huge irregularities committed by its founder chairman, B Ramalinga Raju, who admitted to cooking up its accounts since 2002 by overstating its profits and understating liabilities.