Friday March 27, 06:19 PM
India's Spice puts bid for fraud-hit Satyam on hold: report
NEW DELHI (AFP) - India's Spice Group announced Friday it was temporarily withdrawing from the race for scandal-tainted Satyam Computer Services, complaining the bidding process was not transparent, a report said.
Satyam's government-appointed board is looking for a buyer for Satyam to infuse funds into the company and ensure its survival after its finances were left in a shambles by the country's biggest accounting fraud.
"The withdrawal is for the moment," a senior company official told the Press Trust of India.
The company, once India's fourth-biggest software services exporter by sales, said it had written a letter to Justice S.P. Bharucha, who is overseeing the bidding process, asking for more transparency in the sale.
Tycoon B.K. Modi, who owns Spice Group, has been pushing to know the names of other shortlisted bidders for Satyam and more details about the company's financial state among other requests.
Spice (LSE: SPI.L - news) is also calling for an e-auction where the bidding takes place via the Internet and bidders can see each other's bids. However, Satyam's board is asking for sealed bids.
Once the company receives a response to its letter, "we will decide accordingly whether to remain in the race," the unnamed company official was quoted as saying.
Satyam has been battling to pay wages and meet other expenses since founder B. Ramalinga Raju declared in January he inflated the company's balance sheet by more than a billion dollars and exaggerated profits.
Indian engineering giant Larsen & Toubro and telecom software firm Tech Mahindra Ltd are two confirmed bidders in the race for Satyam. But media reports have said there are up to eight.
Larsen & Toubro has already built up a 12 percent stake in Satyam and is seen as a frontrunner for a 51 percent stake in the company.
A Satyam spokeswoman declined to comment on the bidding process.
The bidding process is unusual in that Satyam cannot provide many figures needed for bidders to conduct normal due diligence on the accounts as the numbers are still being restated by auditors.
Any buyer will have to take on board potential liabilities from at least 13 lawsuits filed in the United States by defrauded shareholders.
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