As the Satyam saga unfolds, what we are witnessing is vulture capitalism, a good thing for both the troubled company and its distressed employees. These opportunistic beasts will pick up whatever is of value and that includes all the engineers and other professionals trapped at Satyam.

The greediest vulture, and a clear front-runner, hovering over the Satyam carcass is Larsen & Toubro. The engineering firm has, for years, run an infotech division without quite breaking into the big league of IT providers. L&T CEO Anil Naik first preyed on Satyam stock after the aborted Maytas takeover plan. That was when Satyam stock plunged nearly 50% but before Ramalinga Raju confessed to fraud.

L&T picked up more than 4% and expected to leverage its stake for a strategic partnership that would bring it access to large overseas clients. When after the Raju fraud was revealed, L&T suffered steep losses and might have been seen holding worthless shares. But Naik is not giving up. Amid the turmoil, he has picked up another 8% and is now by far the largest shareholder. Still, Naik has denied reports that L&T would seek a takeover and that is understandable, given the unknown liabilities.

Another interesting candidate is iGate. It is another Hyderabad-based IT company with Indo-American roots. iGate is a second-tier IT services company desperate to make it to the top rung and is, like Satyam, known to bid low and operate on thin margins. CEO Phaneesh Murthy, a top executive at Infosys before a sexual harassment suit forced his exit, has openly proclaimed his interest in Satyam but obviously cannot make a bid before the accounting issues are resolved, and legal liabilities arising especially from the US lawsuits are estimated.

L&T, more than iGate, could be taking large risks. If some reports are to be believed, up to 30% of Satyam’s clients are in the process of walking out. Kiran Karnik, one of the six members of the government-appointed board, has said two clients have served termination notices. More valuable clients could walk out as the uncertainty continues with an interim management.

Conceivably, one of the three candidates short-listed by the board for the CEO’s position is one chosen by the L&T. Without leadership, Naik will be hard pressed to protect L&T’s interests and build value for his large investment.

Meanwhile, the investigations are ongoing and there are several revelations. But on the business side, there is little emerging to answer nagging questions about the fraud. And yes, there are contradictions too. While Andhra Police says Satyam inflated employee numbers by as much as 13,000, with all those salaries going allegedly to Raju’s coffers, the six-man board, report say, has found no evidence that the company falsely inflated headcount.

Also, no details have come from the office of Price Waterhouse, the auditors. Consequently, little of significance can be gauged about the financial state of affairs at Satyam. Anyway, keep watching this space as the Satyam story continues.