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INDIA BUSINESS WORLD - 16th JANUARY - TO - 31st JANUARY - 2009
INVESTMENT BANK LAZARD TO EXIT SATYAM; SELLS 5.3% OF THE COMPANY’S TOTAL EQUITY
MIFFED over the uncertainty over the government granting a board seat in Satyam Computer, investment bank Lazard has sold a larger portion of its stake in the software firm and may sell the rest in the next few trading trading sessions. Lazard, which emerged as the biggest shareholder in Satyam with roughly 7.4% after market purchases over the last few days, sold shares amounting to 5.3% of the company’s total equity.
People familiar with the development said the investment bank will most likely sell the balance 2%, as it has given up hopes of gaining a seat on the Satyam board, with several institutions vying for the place.
According to Hitesh Jain, a lawyer who represents Lazard, “We have been waiting for communication now and we have not received any communication from the government and the MCA (Ministry of corporate affiars.” He declined to comment further on the issue.
The decision by Lazard to exit Satyam follows the government's announcement to appoint Confederation of Indian Industry, chief mentor Tarun Das, former Institute of Chartered Accountants of India president TN Manoharan and LIC's S Balakrishan to the company’s board. The government, earlier, had appointed HDFC Chairman Deepak Parekh, former Nasscom president Kiran Karnik and former SAT presiding officer C Achuthan as board members of the company.
Another person close to the development said the move by Lazard to exit Satyam would prompt other institutional investors also to sell the stock.
"There has been competition for a seat among several institutional investors, including Lazard. The feeling is that since LIC has been given a board seat, other institutions may not be entertained," the person said.
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