There's this, from an Indian source briefly summarizing what happened and putting an optimistic take on it.
Here's one for corporate governance. A shareholder revolt has forced software giant, Satyam Computer Services, to cancel its plan for a $1.6 billion acquisition of two companies linked to the company's founder, Ramalinga Raju.
The deal had to be called off within 48 hours of the board approving the buy-out because its stock was hammered. The proposal triggered a record 55% decline in the firm's US shares, while back home, the share price tumbled 31%. Both analysts and shareholders criticised the move, terming it a disregard for shareholders' interests, and institutional investors threatened to block the move.
According to analysts, the deal was structured in such a way that the company would not have required shareholder approval and the payment would have gone to the promoters, instead of the company.
This is the second highprofile case of investor activism in recent times, after DLF was forced to offer shares to minority shareholders in 2006. Experts say the backlash was swifter in this case as institutions hold more than 60% share in the firm. It has also put a question mark on the role of independent directors on the board, who are supposed to protect the interests of non-promoter shareholders.
"We will see investors becoming more active in India if firms don't adhere to corporate governance," says S. Dalal, MD, IL & FS Investment Managers. |
