The Satyam Saga: Fidelity raises stakes while insider trading confirmed

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A private newspaper reported that CID and Andhra Police investigations have confirmed speculations of insider trading at Satyam. On the other hand, Fidelity Investors raised their stake once more taking it up from 6.79% to 7.7%

A police official has told The Hindu that speculations that insider trading was carried out by officials of the fraud-hit IT company. The shares of the company were valued at much higher rates than they would have otherwise been if true profit and asset figures were made public. The shares were then sold by the company’s officials and the resulting money which was generated was used for buying land. The investigations had also confirmed the presence of fake fixed deposits in banks which the company reflected via fake deposit receipts.

Meanwhile, in a sign that companies have started taking a keen interest in Satyam’s shares, Fidelity Investors raised its stake in the second time this week. It now owns 7.7% of the Bangalore based company, up from the previous 6.79%.

Another private newspaper has reported that more clients of Satyam might end contracts, without citing sources of the information. It said that the Citi Group, Merril Lynch, Novartis AG and GlaxoSmithKline may cancel deals worth a staggering $200 million and give them to Satyam’s competitors like Wipro and Tata Consultancy Services.