UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
SIFY LIMITED
(FORMERLY SATYAM INFOWAY LIMITED)
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(Name of Issuer)
EQUITY SHARES
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(Title of Class of Securities)
804099208
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(CUSIP Number)
G. Jayaraman
Vice President Corporate Affairs and Company Secretary
Satyam Computer Services Limited
Satyam Technology Center
Bahadurpally Village
Qutbullapur Mandal,
R.R. District - 500855
Hyderabad, Andra Pradesh
India
(91) 40-309-7505
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(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
DECEMBER 16, 2002
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d- 1(g), check the following
box: [X]
The information required in the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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CUSIP NO. 804099208 Page 2 of 7 Pages
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1. Name of Reporting Person:
SATYAM COMPUTER SERVICES LIMITED
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2. Check the Appropriate Box if a Member of a Group
(a) [_]
(b) [_]
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3. SEC Use Only
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4. Source of Funds (See Instructions):
NOT APPLICABLE
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5. Check if Disclosure of Legal Proceedings Is Required Pursuant
to Items 2(d) or 2(e):
NOT APPLICABLE
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6. Citizenship or Place of Organization:
India
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7. Sole Voting Power
NUMBER OF 12,182,600
SHARES -----------------------------------------------------------
BENEFICIALLY 8. Shared Voting Power
OWNED BY 0
EACH -----------------------------------------------------------
REPORTING 9. Sole Dispositive Power
PERSON 12,182,600
WITH -----------------------------------------------------------
10. Shared Dispositive Power
0
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11. Aggregate Amount Beneficially Owned by Each Reporting Person
21,855,624 (Note 1)
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12. Check if the Aggregate Amount in Row (11) Excludes Certain Shares:
NOT APPLICABLE [_]
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13. Percent of Class Represented by Amount in Row (11)
66.64%
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14. Type of Reporting Person
CO
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1. See Item 6 herein. Includes 12,182,600 equity shares beneficially owned by
Satyam Computer Services Limited ("Satyam" or the "Reporting Person") and
an aggregate of 9,673,024 shares beneficially owned by SAIF Investment
Company Limited ("SAIF") and Venture Tech Solutions Private Limited
"Venture Tech"). The Investor Rights Agreement provides for, under certain
conditions, the designation by each of Venture Tech, SAIF and Satyam of a
member or members of the board of directors of the Company and the election
of each such designated member by all of the Company's equity shares held
by SAIF, Satyam and Venture Tech. By virtue of the Investor Rights
Agreement, the Reporting Person may be deemed a group with Venture Tech and
SAIF within the meaning of Section 13(d)(3) of the Act, and as a result, to
have beneficial ownership of the equity shares beneficially owned by
Venture Tech and SAIF. The Reporting Person disclaims such beneficial
ownership and is filing this Schedule 13D on behalf of itself and not on
behalf of any other person or entity.
ITEM 1. SECURITY AND ISSUER
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CUSIP NO. 804099208 Page 3 of 7 Pages
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This statement relates to the ordinary equity shares, par value Indian
Rupees 10 per share (the "Equity Shares"), of Sify Limited, a company
incorporated in India (the "Company"). The address of the principal executive
offices of the Company is Tidel Park, 2nd Floor, No.4, Canal Bank Road,
Taramani, Chennai, 600113, India.
ITEM 2. IDENTITY AND BACKGROUND
(a) Pursuant to Rule 13d-1(a) of Regulation 13D-G of the General Rules
under the Securities Exchange Act of 1934, as amended (the "Act"), the
undersigned hereby file this Schedule 13D Statement on behalf of Satyam, a
company incorporated in India.
The Investor Rights Agreement (the "Investor Rights Agreement"), dated
October 7, 2002, among the Company, Satyam, Venture Tech and SAIF provides for,
under certain conditions, the designation by each Satyam, Venture Tech and SAIF
of a member or members of the board of directors of the Company and the election
by each such designated member by all Equity Shares held by the Satyam, Venture
Tech and SAIF. By virtue of the Investor Rights Agreement, Satyam may be deemed
to be a group with Venture Tech and SAIF within the meaning of Section 13(d)(3)
of the Act, and, as a result, to have beneficial ownership of the Equity Shares
beneficially owned by Venture Tech and SAIF. The Reporting Person disclaims such
beneficial ownership and is filing this Schedule 13D on behalf of itself and not
on behalf of any other person or entity and understands that Venture Tech and
SAIF have each filed a separate Schedule 13D.
(b) & (c) The principal business address of Satyam, which also services
as its principal office, is: Satyam Computer Services Limited, Satyam Technology
Center, Bahadurpally Village, Qutbullapur Mandal,, R.R. District - 500855,
Hyderabad, Andra Pradesh, India. The principal business of Satyam is providing
software services.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Satyam acquired its equity shares of the Company (the "Equity Shares")
as a parent holding company prior to the registration of such securities
pursuant to section 12 of the Securities Act and previously filed a Schedule 13G
to disclose the beneficial ownership of these shares. Satyam did not acquire any
further equity shares of the Company in the transaction which accompanied the
Investor Rights Agreement under which Venture Tech and SAIF acquired Equity
Shares of the Company.
ITEM 4. PURPOSE OF TRANSACTION
The Reporting Person intends to review its investment in the Company
from time to time and, depending upon, among other things, the price and
availability of the Equity Shares, subsequent developments affecting the
Company, the Company's business and prospects, other investment and business
opportunities available to the Reporting Person, general stock market and
economic conditions, tax considerations and other factors deemed relevant, may
decide to investigate, enter into negotiations or engage in transactions which
could result in a decrease of the size of its investment in the Company,
including the sale of all or a portion of the Equity Shares in the open market
or in private transactions at any time or from time to time.
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CUSIP NO. 804099208 Page 4 of 7 Pages
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In addition, in connection with the purchase of Equity Shares by SAIF
and Venture Tech, the Reporting Person entered into the Investor Rights
Agreement (as described in Item 6 below), which contains provisions regarding,
among other things, the acquisition, registration, disposition and voting of
Equity Shares as well as certain provisions regarding the composition of the
Company's board of directors (the "Board"). Except as set forth in this Item 4,
the Reporting Person has no present plans or proposals which relate to any of
the events described in clauses (a) through (j) of the instructions to Item 4 of
Schedule 13D of the Act.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) The aggregate number of Equity Shares that the Reporting Person
may be deemed to own beneficially, pursuant to Rule 13d-3(d)(1)(i) of the Act,
is 21,855,624 (including 12,182,600 Equity Shares beneficially owned by the
Reporting Person and an aggregate of 9,673,024 Equity Shares beneficially owned
by Venture Tech and SAIF), which constitutes approximately 66.64% of the
outstanding Equity Shares.
By virtue of the Investor Rights Agreement, the Reporting Person may be
deemed to be a group with Venture Tech and SAIF within the meaning of Section
13(d)(3) of the Act, and, as a result, to have beneficial ownership of the
Equity Shares beneficially owned by Venture Tech and SAIF. The Reporting Person
disclaims such beneficial ownership.
(b) The Reporting Person has the sole power to vote or to direct the
vote and to dispose or to direct the disposition of 12,182,600 Equity Shares.
(c) On October 7, 2002, the Company entered into Subscription
Agreements with SAIF and Venture Tech (the "Investors") whereby the Investors
agreed, pursuant to the terms contained therein, to purchase an aggregate of
9,593,024 Equity Shares. The Reporting Person was not a party to these
Subscription Agreements. The transactions contemplated under the Subscription
Agreements were privately negotiated and closed on December 16, 2002.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
The information set forth in Item 4 of this Schedule 13D is hereby
incorporated by reference.
INVESTOR RIGHTS AGREEMENT. In connection with the Investors'
purchase of Equity Shares, the Company, Satyam, Venture Tech and SAIF
entered into the Investor Rights Agreement. The Investor Rights
Agreement provides for each of Satyam, Venture Tech and SAIF to vote
its Equity Shares for the purpose of designating members to the Board
on the following terms:
- Two individuals shall be designated by each of Satyam,
Venture Tech and SAIF (for so long as Satyam, Venture Tech and SAIF, as
the case may be, hold in aggregate at least 10% of the outstanding
Equity Shares) and one individual designated by each of the Satyam,
Venture Tech and SAIF (for so long as the Satyam, Venture Tech and
SAIF, as the case may be, hold in aggregate at least 5% of the Equity
Shares).
- One individual shall be designated by South Asia Regional
Fund Limited
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CUSIP NO. 804099208 Page 5 of 7 Pages
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("SARF"), a Mauritius company (for so long as SARF is entitled to
appoint one member to the Board pursuant to a Share Subscription and
Shareholders Agreement, dated as of February 5, 1999, by and among
SARF, Satyam and the Company (as amended on September 14, 1999).
- The members to the Board described above along with the
managing director of the Company shall appoint by majority vote such
number of additional members to the Board from a list of independent
directors nominated in accordance with the provisions of the Investor
Rights Agreement such that the number of members to the Board is
increased to nine.
- The chairman of the Board shall be appointed from among the
members of the Board by a majority vote of the directors nominated by
the Investor and SAIF.
- One director nominated by each of Venture Tech and SAIF
shall be appointed to each of the audit committee, the nominating
committee and the compensation committee (to the extent permitted by
requirements of law).
The Satyam, Venture Tech and SAIF are also required to
cooperate in the removal and replacement of any director designated by
the Satyam, Venture Tech and SAIF, as the case may be.
Until the date that neither Venture Tech (together with its
permitted transferees) nor SAIF (together with its permitted
transferees) holds at least 7.5% of the non-diluted Equity Shares, the
Company is prohibited by the Investor Rights Agreement from taking any
of the following actions without the approval of three-fourths majority
of the aggregate number of Equity Shares held by the Investor (together
with its permitted transferees) and SAIF (together with its permitted
transferees):
- Any change in the capital structure of the Company or issue
(other than employee shares options) Equity Shares or equivalents or
other rights to subscribe for, acquire or call for shares or redemption
or purchase by the Company of shares or a reduction in the share
capital of the Company or in any way change the share capital of the
Company;
- The issue of any debenture, the making of any loan or
extension of any indebtedness by the Company or the granting of any
credit or creation of any encumbrance over any of the Company's assets,
or the entering into of any guarantee or indemnity except in limited
circumstances such as in the ordinary course of business and as
contemplated by the Company's business plan;
- Appoint any director of the Company or member to any
committee except in accordance with the Investor Rights Agreement;
- The merger, acquisition or winding up of the Company or
participation in any scheme of reconstruction or any settlement
involving the Company or liquidation or dissolution of the Company;
- Any acquisition of the whole or substantially the whole of
the assets and undertaking of the Company or an acquisition by the
Company of any part of (or the whole of) the stock or assets and
undertakings of another company;
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CUSIP NO. 804099208 Page 6 of 7 Pages
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- The assignment, sale or other disposal, lease or lending in
any twelve month period of any asset or related group of assets of the
Company having a net book value in aggregate in excess of 10% of the
net book value of the assets of the Company;
- The declaration of any dividend, distribution of Company's
share capital or purchase, redemption or any kind of acquisition of any
of the Company's capital stock or equivalents (other than pursuant to
the Investor Rights Agreement);
- The Company establishing or materially varying any share or
share option plan for any director or employee of the Company. Any loan
to or repayment of debts to directors, officers or affiliates of the
Company except as may be agreed by the Investor prior to the date of
the Investor Rights Agreement;
- Any transaction by the Company with any shareholder or any
associated company of any shareholder or any directors of the Company
or the related parties of any of them involving consideration given or
received in excess of US$100,000; and
- Any change in the nature or material modification of the
business undertaken by the Company.
The Investor Rights Agreement also provides for transfer
restrictions on the Equity Shares held by Satyam, Venture Tech and
SAIF, including the following:
- RIGHT OF FIRST OFFER. In the event that Satyam, Venture Tech
or SAIF wishes to transfer any restricted Equity Shares to a third
party, each of Venture Tech (and its permitted transferees) and SAIF
(and its permitted transferees) shall have the right to purchase a
proportionate number of the offered restricted Equity Shares at the
offered price per share.
- TAG-ALONG RIGHT. In the event that Venture Tech (or its
permitted transferees) are transferring any restricted Equity Shares to
a third party, then Satyam shall have the right to require the third
party to purchase a proportionate number of restricted Equity Shares
held by Satyam at the same price per share to be received by the
Investors.
- DRAG-ALONG RIGHT. In the event that SAIF (or its permitted
transferee) wishes to sell all or a portion of its Equity Shares to a
third party in a transaction approved by three-fourths majority of the
aggregate of the Equity Shares held by Venture Tech (and its permitted
transferees) and SAIF (and its permitted transferees), then SAIF shall
have the right to require Satyam and Venture Tech to sell all or a
portion of their Equity Shares to such third party at the same price
per share to be received by SAIF.
- PRE-EMPTIVE RIGHTS. Except with respect to certain exempt
issuances described in the Investor Rights Agreement, if the Company
wishes to issue any share capital or other securities convertible into
share capital to any person, then the Company shall offer a
proportionate amount of such share capital or other securities to each
of Satyam, Venture Tech and SAIF at a price per security equal to the
Company's offered price.
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CUSIP NO. 804099208 Page 7 of 7 Pages
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References to, and descriptions of, the Investor Rights Agreement in
this Item 6 is qualified in its entirety by reference to the copies of the
Investor Rights Agreement which is included as Exhibit 1 to this statement and
which are incorporated by reference in this Item 6 in its entirety where such
references and descriptions appear.
Except as set forth herein or in the Exhibit filed or to be filed
herewith, there are no contracts, arrangements, understandings or relationships
with respect to the Equity Shares owned by the Reporting Person.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Exhibit 1 - Investor Rights Agreement, dated October 7, 2002, by and
among Sify Limited (formerly Satyam Infoway Limited), SAIF Investment Company
Limited, Satyam Computer Services Limited and Venture Tech Solutions Pvt. Ltd.
incorporated by reference to the Investor Rights Agreement included as Exhibit
99.3 to the Form 6-K furnished by Sify Limited on October 10, 2002.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated as of March 20, 2003
SATYAM COMPUTER SERVICES LIMITED
By: /s/ G. Jayaraman
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Name: G. Jayaraman
Title: Vice President Corporate Affairs and
Company Secretary
The original statement shall be signed by each person on whose behalf
the statement is filed or his authorized representative. If the statement is
signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of the filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement: provided, however, that a power of attorney for this purpose
which is already on file with the Commission may be incorporated by reference.
The name and any title of each person who signs the statement shall be typed or
printed beneath his signature.
Attention: Intentional Misstatements Or Omissions Of Fact Constitute
Federal Criminal Violations (See 18 U.S.C. 1001)