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Satyam board meets to discuss possible bids

Nine 'fairly serious bidders' in for firm at centre of India's biggest corporate swindle.

The board of fallen Indian outsourcing giant Satyam met Friday to discuss potential bidders for the company, whose finances were left in turmoil by a massive book-keeping fraud.

A newspaper report said there were eight to nine "fairly serious bidders" for the firm at the heart of India's biggest corporate swindle.

But only four companies have formally announced they are interested in taking a 51 percent stake in Satyam.

They are Indian engineering giant Larsen & Toubro; the Spice Group conglomerate, which has telecommunications interests; Tech Mahindra, an arm of the diversified Mahindra Group and Nasdaq listed iGATE, an integrated technology company.

"The board is discussing the expressions of interest that came in yesterday," a Satyam spokeswoman said.

A government-appointed board is organising the bidding for Satyam, battling to stay afloat since founder B. Ramalinga Raju confessed in January he had ballooned the balance sheet by $1 billion and fudged profits.

Satyam's share price was down 1.91 percent or 0.90 rupees at 46.30 in early afternoon trade on investor disappointment at the lack of big-name foreign bidders, dealers said.

Some potential buyers could still declare themselves with the Economic Times quoting an unnamed source close to Satyam as saying "while there numerous frivolous registrations, there are eight to nine fairly serious bidders."

The Satyam spokeswoman declined to comment, saying it was "all speculation" and that names of those declaring an interest were not being divulged for "reasons of confidentiality."

Prospective bidders now must submit a "detailed expression of interest" and show they have at least 15 billion rupees ($290 million) by Friday, March 20, Satyam said.

"Eligible bidders will be short-listed and given access to certain business, financial and legal diligence materials relating to the company," it said.

The bidding process promises to be unusual in that Satyam cannot provide many of the figures needed for bidders to conduct normal "due diligence" on the accounts.

Satyam has said it will supply potential bidders with as much financial detail as possible to help them decide whether to make a full-fledged offer.

Any buyer will also have to take on board potential liabilities from at least 13 lawsuits filed in the United States by defrauded shareholders.

Satyam's sale has taken on urgency, with customers' uncertainty mounting over its future. Several firms have terminated their contracts and more are reportedly contemplating such a move.

The board is hopeful of wrapping up the bidding process by mid-April, the Economic Times said.

"The company is getting squeezed... clients are seeking stable management so I don't think it (the sale process) should be protracted," said Hirit Shah, information technology analyst at Angel Broking.