Satyam Computer tanks on buzz of resignation by Raju

Satyam Computer Service lost 13.55% at Rs 140.40 on BSE on rumors its founder and chairman Ramalinga Raju has resigned from the board.
The stock hit a high of Rs 163 and a low of Rs 138 so far during the day. The stock had a 52-week high of Rs 544 on 30 May 2008 and a 52-week low of Rs 153.80 on 17 December 2008.
India's fourth largest software exporter by sales has an equity capital of Rs 134.77 crore. Face value per share is Rs 2.
The current price of Rs 140.40 discounts its Q2 September 2008 annualised EPS of Rs 35.48, by a PE multiple of 3.95.
As per unconfirmed reports, Raju has put in his papers and he is awaiting the board's decision on the issue. Raju's resignation could raise issues of succession.
Meanwhile, media reports today, 23 December 2008, said a top World Bank official has admitted that Satyam was barred last February from all business at the bank for an eight-month period on account of an alleged data theft. FOX News had reported the scandal about ultrasensitive data heists by Satyam Computers, but complying with its secrecy policy the World Bank denied reports. Satyam had denied the allegations.
Satyam Computers during trading hours on 18 December 2008 said its board will meet on 29 December 2008 to consider buyback of shares. The announcement was aimed at soothing investor nerves after the Satyam stock slumped 30.22% on 17 December 2008. Investors had chucked the stock after the company on 16 December 2008, announced a $1.6 billion deal to acquire Maytas Properties and Maytas Infrastructure, companies run by Raju's sons B Rama Raju and Teja Raju.
Satyam scrapped a $1.6 billion acquisition of companies connected to its chairman after the plan angered investors and drove down the software firm's American depository receipt a record 55% on 16 December 2008. The company's total disregard for corporate governance and shareholders was shocking - Satyam had no plan to take the proposal to minority shareholders.
Satyam had announced that it will acquire 100% in unlisted Maytas Properties for $1.3 billion and 51% of construction firm Maytas Infra for $300 million. Satyam founder and Chairman B. Ramalinga Raju and other insiders hold 36% in Maytas Infra and 35% in Maytas Properties.
Satyam had planned to fund 75% of the acquisition with cash and the rest by selling debt. Satyam planned to acquire 31% in Maytas Infra from its promoters, or company insiders, at a price of Rs 475 a share. Satyam also planned to make an open offer for an additional 20% at a price of Rs 525 a share.
Maytas Properties is into urban infrastructure development whereas Maytas Infra is into infrastructure construction and asset development. Ramalinga Raju originally promoted the deal by saying it would de-risk Satyam's core business in IT services.
Satyam Computer Services' net profit rose 3.70% to Rs 597.43 crore on 6.87% increase in net sales to Rs 2700.52 crore in Q2 September 2008 over Q1 June 2008.
Satyam Computer Services is a global business and information technology services company. It delivers consulting, systems integration and outsourcing solutions to clients.