Satyam banned for 8 yearrs by World Bank

The World Bank has finally admitted that it has decided not to do business with city-based Satyam Computers for eight years over charges of data theft.

A Satyam spokesperson, however, refused to react to the World Bank statement.

After media went to town with the World Bank revelation, Satyam’s stock crashed by 13.5 per cent and closed at Rs.140.40 on the Bombay Stock Exchange. It had earlier touched a low of Rs 138.

Reports had appeared in October itself that the World Bank had implicated Satyam for data theft and had banned it. The company and the bank, however, had denied the ban then.

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Satyam to buy back shares

Satyam Computer Services Ltd on Thursday exercised its second option of buying back its shares after being forced to cancel plans to pick up 51%in Maytas Infra and 100% in Maytas Properties.Details of the conference call made by fund managers with Satyam management on Tuesday revealed that every one of them opposed the deal for by passing minority shareholder approval.

The company informed stock exchanges on Thursday that its board would discuss the buy back proposal on December 29. The news helped to prop up the company’s be leaguered shares,which closed 7% higher at Rs 169.35 on the BSE. However, year on year, the value of Satyam’s stock has eroded by two-thirds.

Under existing provisions, a company can use 10% of its equity capital plus free reserves to buy back shares. Satyam had around Rs 7,350 crore as such at the end of March. So, of the total cash of around Rs 5,300 crore in its books, Rs 735 crore can be used for the buy back.

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Recovery after panic on Dalal Street

On a fate-changing day for Wall Street, the Indian stock market saw panic selling on Monday morning in the wake of news that Lehman Brothers, the fourth largest US investment bank, had succumbed to the bad mortgage finance and that Bank of America would buy the trouble-torn Merrill Lynch for $50 billion.

In the drastic early sell-off Sensex plunged 850 points. However, the market recovered in the latter half on short covering and bottom fishing. The index ended the day with a less severe loss of 469.54 points. What triggered the short covering was a decline in crude oil prices by more than $4 while the Indian market traded. “I don’t believe in the decoupling theory.Whatever happens in the US will have repercussions around the world, be it Brazil, Europe, China or India,” said Leslie Menkes, Morgan Stanley head of onshore private wealth management for Asia. “We don’t see markets breaking away from the trend.”

With Monday’s decline, Sensex lost 1,413.7 points, or nearly 10 per cent, in a week’s time — equivalent to a loss of Rs 4,39,535.2 crore in investor wealth in six trading sessions. The NSE’s S&P CNX Nifty index fell 3.68 per cent, or 155.55 points, to close at 4,072.90.

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