Lazard Asset Seeks Information in Satyam Rescue Plan

By M.C. Govardhana Rangan

Jan. 11 (Bloomberg) -- Lazard Asset Management LLC, a stakeholder in Satyam Computer Services Ltd., said it wants information from the Indian government about developments in the investigation of a $1 billion fraud at the company.

“As a large shareholder, we would like to be informed on all matters being considered regarding Satyam,” Lazard Asset said in a letter to the Ministry of Corporate Affairs, according to a statement today on BusinessWire. It said reports that it has sought a seat on the Satyam board are incorrect.

Lazard Asset increased its stake in India’s fourth-biggest software exporter as investors sold after Chairman Ramalinga Raju said he had falsified accounts “for several years.” The government sacked directors of Hyderabad-based Satyam and is assembling a board that’s scheduled to meet this week.

“Shareholders are worried since the government got involved,” said P.R. Dilip, managing director at investment advisory firm Impetus Wealth Management Ltd. in Mumbai. “The priority will be to rescue staff and customers, and shareholders are always last in the queue in these kinds of events.”

A Hyderabad magistrate yesterday remanded Raju, Satyam’s founder, and his brother Rama to judicial custody until Jan. 23. Satyam Chief Financial Officer Srinivas Vadlamani was questioned by police yesterday.

Changing Hands

Lazard Asset increased its stake in Satyam on Jan. 7 to 5.3 percent from 4.79 percent, while Aberdeen Asset Managers Ltd. and Fidelity Management & Research Co. sold their holdings. Lazard holds shares on behalf of clients and the acquisition of an additional stake wasn’t aimed at getting control of the company, it said in a filing to the Bombay Stock Exchange yesterday.

Aberdeen Asset Managers, the biggest shareholder as of Sept. 30, sold 36.14 million shares, or about 5.4 percent of Satyam’s outstanding equity, on Jan. 7, data from stock exchanges show.

Satyam Computer was sued by investors in at least three class-action lawsuits in federal court in the U.S. following the plunge in its shares after Raju, 54, revealed the fraud and quit.

The stock plummeted 41 percent to 23.75 rupees on Jan. 9. The Bombay Stock Exchange removed Satyam from its benchmark Sensitive Index a day after the National Stock Exchange dropped the stock from the Nifty.

Satyam’s American depositary receipts, each representing two ordinary Satyam shares, fell $8.42, or 90 percent, to 93 cents before the opening of the New York Stock Exchange on Jan. 7, when trading was halted.

To contact the reporter on this story: M.C. Govardhana Rangan in Mumbai at grangan@bloomberg.net.