The government said on Friday there was nothing wrong in Satyam's new CEO A S Murty selling about 40,000 shares of the company days ahead of an acquisition announcement.
"What's wrong in that? Even if you have shares, you will sell them," Corporate Affairs Minister Prem Chand Gupta told reporters in New Delhi.
The minister was replying to a query as to whether the fact that Murty sold the shares between December 12-16, 2008, was a matter of concern and could have been a case of insider trading as the sale preceded an abortive acquisition deal -- now at the centre of the accounting scam in Satyam.
Satyam had announced on December 16 its plans to acquire Maytas Properties and Maytas Infrastructure -- promoted by its founder Ramalinga Raju's family -- but had to withdraw the plans within hours after intense opposition from investors.
Murty, who has been with Satyam for about 15 years, was named as new CEO of the scam-hit company yesterday by its government-appointed board.
He sold 40,000 shares at an estimated Rs 90 lakh (Rs 9 million), as per the regulatory disclosures made by Satyam to bourses. He sold 21,000 shares between December 12 and 15 and 19,000 more on December 16, the day Satyam made a failed $ 1.6 billion (Rs 80 billion) bid for the two Maytas firms.
Satyam shares closed at Rs 220.75 on December 12, Rs 225.40 on December 15 and Rs 226.50 on December 16 on the BSE.
On December 17, Satyam withdrew the bid for the Maytas firms after facing strong investor dissent, which saw its ADRs listed on the NYSE plunging 80 per cent in a single day.
The share sale assumes importance as Satyam scrips took a 30 per cent hammering on the bourses on December 17 and plunged to Rs 158.05.
Since then the scrip has been volatile on the bourses and is currently hovering around Rs 47 on the BSE. Based on Thursday's closing price of Satyam on the BSE, the sell value of Murty's shares comes to Rs 18.50 lakh (Rs 1.85 million), nearly a fifth of the valuation he got in December.
