Latham and Jones Day head up $600m Satyam auction

Latham & Watkins and Jones Day have won lead roles on the Indian Government-sponsored auction for outsourcing firm Satyam Computer Services, reports The Am Law Daily.

On Monday (13 April), the scandal-plagued company announced the sale of a 51% stake in its business to Indian telecommunications company Tech Mahindra in a deal valued at nearly $600m (£403m).

Hyderabad-based Satyam found itself on the verge of collapse in early January after founder and former chairman Ramalinga Raju admitted to board members that the company's accounts had been falsified. Last week India's Central Bureau of Investigation charged nine people - including Raju and two of Satyam's outside auditors from PricewaterhouseCoopers - with forgery and fraud.

After the estimated $1bn (£670m) fraud was revealed, the Indian Government took over management of Satyam. In mid-January Satyam tapped 400-lawyer Indian firm Amarchand & Mangaldas & Suresh A Shroff to advise on issues arising from the accounting fraud.

Satyam also retained Latham & Watkins, which has served as US regulatory counsel to the company for the past eight years, and turned to Wachtell Lipton Rosen & Katz to fight shareholder class action suits filed in the US.

Latham securities and corporate finance partner John Huber in Washington DC - Satyam's lead US legal adviser during the auction process - did not immediately respond to a request for comment.

Jones Day first advised Tech Mahindra - a joint venture between British Telecom and Mumbai-based conglomerate Mahindra & Mahindra - as a result of a longstanding relationship with the company's local counsel at P&A Law Offices in New Delhi.

P&A's managing partner is Anand Pathak, the brother of former Jones Day M&A partner Jai Pathak, who joined Gibson Dunn & Crutcher last May to open the US firm's Singapore office.

P&A Law Offices remains closely aligned with Jones Day, whose M&A chair, Robert Profusek, served as lead US counsel to Tech Mahindra on the acquisition of its Satyam stake.

Profusek says Jones Day has been advising Tech Mahindra for several months. According to the terms of the purchase agreement, Tech Mahindra will pay roughly $351m (£236m) up front for a 31% stake in Satyam with a commitment to make a tender off for an additional 20% of the company's shares - some of which are listed on the New York Stock Exchange - on the open market.

That puts the total value of the deal at about $592.4m (£397.5m). The auction for Satyam's assets began in early March and was supervised by the Indian Government.

For more, see India's legal elite on scandal, innovation and pressure for reform.

The Am Law Daily is the website of The American Lawyer, Legal Week's US sister title.