IBM has ruled out taking over Indian IT supplier Satyam, the
company at the centre of a $1bn accounting fraud.The bidding
process for Satyamstarted this week, with a deadline for
applications of interest set for today (12.03.09).
According to Indian website
The Economic Times, quoting sources close to
IBM,IBMshowedinterest in Satyam before the fraud but has now
decided not to proceed.
An acquisition by an Indian firm is believed most likely.
Robert Morgan, consultant at Hamilton Bailey, told Computer
Weekly that Western firms will be put off by the fraud and its
possible repercussions.
"I cannot see an IBM or any other global supplier taking it
seriously. I think they would like to buy Satyam, but the
possibility of action from shareholders will stop any Western
company buying it."
"The Indian companies will take it on trust because they are
owned by families, rather than shareholders,"Robert Morgansaid.
HP and CSC are believed to be among the potential buyers.
Interested parties from India are said to include telecoms giant
Tech Mahindra as well as engineering and construction company
Larsen & Toubro.
Mark Lewis, partner and head of outsourcing at law firm Berwin
Leighton Paisner, said whichever company acquires Satyam, whether
Indian or not, will face the same legal threats.
Satyam's former chairman, B. Ramalinga Raju, admitted he had
falsely reported the company's results in January. This left the
company short of cash and its customers short of confidence.
The company will require more detailed expressions of interest
and proof from bidders of available funds to the value of $290m by
20 March.