The management called off the deal Dec 17 bowing to pressure from institutional investors and analysts who questioned the board's decision and charged it with lacking transparency and corporate governance, as minority and other shareholders were not consulted or taken into confidence.

The resignation of the four directors reduces the effective strength of the Satyam board to six members from 10.

Of the six, three are independent directors (T.R. Prasad, V.P. Rama Rao and V.S. Raju), two executive directors from promoters (Ramalinga Raju and his brother B. Rama Raju) and a whole-time director (Ram Mynampati).

Meanwhile, the management has rescheduled the board meeting to Jan 10 from Dec 29 to consider a proposal for buy back of shares by promoters. Raju has also asked the board to include the possible dilution of the promoters' holding in the company in the agenda.

In a related development, the $2-billion company informed the Bombay Stock Exchange (BSE) that the minority holding of the promoters would have been diluted by institutional lenders with whom their shares were pledged through a holding firm.

'The promoters had pledged all their shares with institutional lenders through SRSR Holding Ltd in September 2006. Their holding would have been diluted if the lenders had exercised the option to liquidate the pledged shares,' the company said.

The promoters, including Raju's relatives, hold a minority stake of 8.61 percent in the company. SRSR Holding is a family-owned investment firm.

Foreign institutional investors (FIIs) collectively hold a majority stake in Satyam, with 48.22 percent of the total equity, while Indian financial institutions (FIs) hold 12.91 percent. Others, including retail investors have the remaining 30.38 percent of the equity.

Satyam's share price has plunged by about 35 percent from Rs..226.50 (Dec 16) to Rs. 148.10.

Source: IndiaPRWire