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Wed 21 Jan 2009 04:27 PM

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Satyam to appoint bank advisor

Satyam will appoint an investment bank to weigh up future options; US SEC joins investigation into falsified accounts

Satyam is expected to announce the appointment of an investment bank to advise it on future plans on Thursday.

Deepak Parekh, one of the government appointees to the board, said that Satyam would appoint a banker to advise on its options.

The services company reports that it has been approached by several potential buyers, but no decision has been made on selling off individual units, selling the company as a whole or seeking new investment.

Various companies have been linked to Satyam with regard to specific lines of business, including the back office processing division, and the SAP practice, which accounts for around 46% of all Satyam’s business.

Also today, the US Securities and Exchange Commission (SEC) confirmed that it is investigating Satyam, for misleading investors. The SEC joins Indian market regulators, accounting regulators, serious fraud investigators and local police CID in examining Satyam for falsifying assets and cash of $1 billion, although the SEC did not release any details on its activities.

One major US client of Satyam, the insurance company State Farm, has announced that it has ceased dealing with Satyam, although others customers such as GE have said they will not make any changes at this time.

A bail hearing is set for tomorrow, postponed from Monday, for the former MD, CEO and CFO of the company, who are still being questioned by police over the irregularities in accounts.

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