Satyam eyes new customers, pledging assets for funds

Customers leave a sales office of Fidelity Investments in Boston in this August 27 file photo.Asset manager Fidelity Investments bought a 2.5 percent stake in fraud-scarred Satyam Computer Services for 915 million rupees ($18.7 million) through two block deals on Wednesday, stock exchange data showed.

MUMBAI (Reuters) - A board member of Satyam Computer Services said multinationals could award it new contracts and the outsourcer had pledged assets to raise money as it tries to emerge from India's largest corporate scandal.

Satyam's government-appointed board and senior employees were reaching out to customers to stop them from joining State Farm Automobile Insurance in cancelling contracts, Tarun Das told news channel CNBC TV 18 on Thursday.

And in addition they were pushing clients to expand their business with Satyam while chasing new contracts.

"The company is stable. So we have identified people who could be potential new customers ... big multinationals who are now talking to us about new business for Satyam," he said, adding it could take at least 30 days to announce any deals.

The six-member board tasked with saving Satyam after its founder resigned as chairman earlier this month revealing profits have been falsified for years has also been able to get bank approvals for additional funds by pledging assets, Das said.

"The money is on the way. Because they are unencumbered we actually were able to offer some of these fixed assets to the banks as security, which we must do," he said.

Earlier this week, Satyam said it had almost concluded funding negotiations and would pay January salaries to its employees on time from cash and receivables.

Das said the board had done internal and external checks on employee numbers and had accounted for over 51,000 staff.

Last week, a public prosecutor told a Hyderabad court that Satyam had only 40,000 employees and not 53,000 as Satyam claimed, adding the non-existent employees were used to transfer funds from the company.

The board announcements have lifted confidence among some bidders and investors. Two funds of asset manager Fidelity Investments bought a 2.5 percent stake in Satyam for $18.7 million through two block deals on Wednesday, stock exchange data showed.

Top engineering and construction firm Larsen & Toubro trebled its stake to 12 percent last week and the new board has said there has been wide bidding interest from corporates and private equity firms.

(Additional reporting by Devidutta Tripathy)

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