An injunction order from the US court may throw a spanner on the new

RELATED ARTICLES Reebok India accuses former top execs of $157m fraud Regulators, investors turn up heat over Facebook IPO Investors sue Nasdaq, Facebook over IPO India grew at 9% with same policies: Montek to investors Satyam aims to be among top 3

Satyam board and the ministry of corporate affairs' plans to execute what is called a 'slump sale' in accountancy parlance of the scam-hit software company.

Cotchett, Pitre & McCarthy, the leading US law firm, which has already filed class action suits against Satyam and its former auditor Price Waterhouse, is contemplating to contest the decision to sell Satyam and seek an injunction till class action suits are settled in the US, officials of the US law firm told Financial Chronicle.

The legal advisors to the new Satyam board have also put in a word of caution on this. As many as 14 class action suits have been filed in the US.

Meanwhile, an executive of a firm engaged by Satyam told Financial Chronicle: "It's like a graveyard strategy and a slump sale of Satyam.

Graveyard strategy is to bury the dead and the slump sale is to transfer assets, projects and people of Satyam to its new buyer, without touching the left-hand side of the balance sheet, which is liability. The new buyer may be asked to pay for the assigned value of assets, projects and people."

An auditor close to the developments said, "This is nothing new in accounting practice. In fact, this is exactly what was done in the GTB-OBC merger case."

According to this line of thinking, the assets of the company will be converted into cash, which in turn will be used to pay the shareholders after paying the creditors and current liabilities and a part of it will be kept for paying future liabilities. The new strategic investor will therefore not have to bear the burden of any liability, he said.

Goldman Sachs and Avendus as investment banker and Boston Consulting as consultants are advising the new Satyam board on finding a suitable strategic investor.

The US attorney, however, maintained that, "Satyam cannot even do a slump sale with class action suits pending. After all, the interest of the shareholders and investors of Satyam will have to be protected. Who will the US shareholders chase in case such a sell-off takes place?"