International Law

The King is dead, Long live the King - The curious case of Satyam

By admin

Somebody once sat on the wall, and then had a great fall. So what do you do when that someone happens to be an IT co with thousands of employees and a significant ambassador of Brand India in the global IT arena? Well, all the King’s horses and all the King’s men are put to good use.

So now we have a retired Chief Justice invited to oversee the bidding process for Satyam Computer Services Ltd and SEBI has relaxed the requirement to have a minimum floor price that is otherwise required under Indian law in connection with the proposed issue of shares amounting to 31 percent of the company’s post-issue share capital to the successful bidder.

With very little transparency so far on the number of clients, status on current and potential liabilities in India and overseas, and other key factors that determine the value of this once ambitious organization, it is going to be interesting to observe the manouvering by the bidders in attempting to influence a Government-appointed Board.

As a corporate lawyer I notice a certain well-known law firm’s trademark imprint on the process - producing a multiplicity of documents for these bidders to sign - an standard NDA and non-solicit is followed by a stand-still agreement, a no-claims undertaking (like that will help in an Indian court of law) and finally an executed copy of the share subscription agreement. J

Full post as published by Technology Law India on March 13, 2009 (boomark / email).