Satyam shares up 4%; mkt cheers new CEO appointment

MUMBAI: Shares of Satyam Computer were up 4% at Rs48.10 at 10:00 AM on Friday, after the company announced the appointment of a new CEO. Investors see this move as a step towards retaining stability in the scam-tainted company, though A.S. Murthy, the newly-appointed CEO, is not a very well-known figure among brokers, equity analysts and fund managers, unlike his former colleagues at Satyam.

If one were to draw a popularity graph, Mr Murthy, in all probability, would fall grids apart from other high profile Satyamiites like Ramalinga Raju, Ram Mynampatti and even Srinivas Vadlamani. The market believes, though Mr Murthy held non-glamorous positions like chief delivery officer, he would any day be better than what Ramalinga Raju was in mid-90s when Satyam was just blooming into an IT bigwig.

To moot the point: First Global, which recently pieced together an anecdotal profile of Ramalinga Raju during Satyam's early days, states, "We remember having met Ramalinga Raju back in 1995 or 1996, just to get a sense of what Satyam was all... Mid-way into the meeting, we came to one conclusion, aided in no small part by the man himself: that Ramalinga knew precisely nothing about the information technology business. He told us that he was basically into real estate and construction and that Satyam was an opportunistic attempt to get into another sunrise industry," states the First Global report cheekily.



Brokers who have read the First Global report opine, Murthy would any day be a better CEO than the Raju of yore. "This guy understands business," says the head of a stock brokerage attached to a private bank. "The board must have checked the credentials of the man before appointing him as the CEO," the broker added.

Going by what the CIO of a mutual fund house say, having an insider as the CEO will do a world of good for Satyam. "At least there is somebody out there who knows what 50,000-odd Satyamiites and their clients want. The six-member working committee team was plainly a deal-making team; it only wanted to set the company on an operational track. Murthy will be able to steer the company ahead, thanks to his experience in dealing international clients," the fund manager added.

The six-member working committee has also appointed ace manager Homi Khusrokhan and chartered accountant Partho Datta as special advisors to Satyam Computers.

"The working committee has managed to create an ideal blend of business expertise and management expertise. While Murthy knows Satyam's business inside out, Khusrokhan will emerge as the new face of Satyam management. Murthy, in his powers, will try to retain clients and run business as usual and Khusrokhan may try to buff-shine the tainted image of Satyam Computers," said a veteran Mumbai-based broker.

Market intermediaries are not expecting Murthy or Khusrokhan to lock horns real hard, to stall the probable sale of company to any of its countless suitors. "L&T may still go ahead with its plans to buy Satyam. If it comes across any resistance, the engineering major will simply raise their shareholding to 15% and trigger an open offer. But all that is too early to say," the institutional sales head of Mumbai-based brokerage said.