BANGALORE (Reuters) - Spice Group may withdraw from the race to buy the fraud-hit Satyam Computer Services Ltd due to a lack of desired transparency in the bidding process, its chairman said on Wednesday.
Bidders for a 51 percent stake in the outsourcing firm hit by India's biggest corporate fraud are expected to be shortlisted soon, and they will be given access to some data and financial information before submitting their offer.
"We have the letter. It's not very positive, so we may be withdrawing," B.K. Modi said of Satyam's response to Spice's request to make the bidding process more transparent.
Along with Spice, Indian engineering firm Larsen & Toubro and IT services firm Tech Mahindra are among potential suitors for Satyam, whose government-appointed board is looking for a buyer to revive the company.
"We wanted transparency, which we have not got. We don't know who the other bidders are. There is no understanding of (a) clear-cut auction process," Modi told Reuters by telephone.
"So we have to take a decision based on that, because we don't want to get into something which we are not comfortable (with) in terms of transparency."
New York-listed Satyam has been struggling since founder and Chairman Ramalinga Raju shocked investors in January, saying profits had been overstated for years and assets falsified. Raju is now being held in jail.
Satyam said on Tuesday it hoped to finalise the buyer of a 51 percent stake by April 30, and that potential bidders, who had submitted a detailed expression of interest by March 20, should expect to receive a response by Wednesday.
Modi said the diversified Spice Group had not started its due diligence of Satyam yet, and a board meeting later in the day would take a decision on its participation in the bidding.
Last week, U.S.-based outsourcer iGate Corp said it would not pursue a bid following further analysis of Satyam.
The Satyam board is looking for a buyer to help restore the confidence of its more than 600 clients and about 50,000-strong staff, but there are concerns about the extent of the fraud, whether it is losing customers and its legal liabilities.
The company's accounts are yet to be restated.
Satyam has said selected bidders will be invited for due diligence, which will be done through access to data containing "certain non-public information", and the management will provide an overview of operations and strategy.
(For full coverage on Satyam click here)
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