CLB nod to Satyam for inducting investor challenged in SC

NEW DELHI: The Company Law Board's approval to the troubled IT firm Satyam Computer Services to go ahead with the process to rope in a strategic investor through a public auction has been challenged in the Supreme Court.

The petition filed by an advocate Manohar Lal Sharma, who claimed to be a shareholder of the company, sought stay on the auction of Satyam's share, on the ground that the government- appointed board of the company had taken a unilateral decision to sell the stake to a third party without convening any general meeting of the shareholders.

"They have already increased share capital of the company to Rs 280 crore without passing any resolution in the general body of the shareholders," the petition said.

"Under a clever arrangement, they have already decided and declared that out of the increased share capital of the company, they will issue further shares to the successful bidder...up to 51 per cent of the entire equity share capital," the lawyer said in the petition, adding that the buyer would not own just the company but also its board.

Allotment of further shares to only one bidder violates the Article 14 of the Constitution, which propagates every citizen's right to be treated equally before law, he said.

At present, Satyam Computers is controlled by a government-appointed board after it superseded the previous board led by its disgraced founding Chairman B Ramalinga Raju.