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Govt regulator to probe into Satyam's aborted bid

Govt regulator to probe into Satyam's aborted bid

This even as Satyam scrip fell about 3 per cent since its previous close.

Mumbai: The Government has ordered a probe into IT giant Satyam's reversal of a major acquisition deal.

According to reports, the Government will examine if the company had any malafide intention to influence the stock market.

On Thursday, Satyam decided to reverse the acquisition of two group-promoted companies just hours after its share price in the US fell drastically, presumably due to negative investor sentiment.

The company faced allegations about poor corporate governance, as the two firms it planned to buy are owned by the chairman Ramalinga Raju's sons.

Satyam's scrip slid again in Friday morning trade, while the market regulator said the IT major's unpopular and thwarted bid to acquire two promoter companies would be examined.

“We do not want to react quickly to the incident (the acquisition bid that triggered investor outrage), but we will study issues involved and then take a decision,” Securities and Exchange Board of India (SEBI) chairman C B Bhave told reporters here.

The Satyam scrip fell about 3 per cent since its previous close and was trading around Rs.166, while Maytas Infra - one of the companies Satyam was planning to acquire - saw the free fall of its share value continuing, the scrip losing another 20 per cent since Thursday's close.

The Maytas stock was trading at around Rs.248 during morning trade Friday, down Rs.62.10 since its previous close of Rs.310.65.

Satyam on Thursday said its board would meet Dec 29 to buy back shares, a declaration that is being widely perceived as a move to regain investor confidence that was eroded after the cash-rich company said it would acquire two promoter firms at $1.6 billion despite widespread liquidity squeeze.

Both firms are owned by the sons of Satyam's chief promoter B. Ramalinga Raju.

first published:December 19, 2008, 12:38 IST