Satyam [Get Quote] Computer on Monday sank deeper into a crisis with two more directors quitting the board and the company announced that lenders were possibly selling promoters' equity that is entirely pledged with them.

Coinciding with dilution of the promoters' equity in the troubled company, suffering from an embarrassing failed-bid to acquire two firms promoted by the family of chairman B Ramalinga Raju, the firm announced that directors Krishna G Palepu and Vinod Dham have quit from the board of directors, taking the total resignation to three.

M Srinivasan quit last week over the abandoned deal. The board had nine members before the resignations.

With the chairman and promoters having no free equity, an analyst pointed out that issues of propriety and corporate governance would become more significant in the January 10 Satyam board meeting that would consider changes in board.

Speculation has intensified that Raju might be shown the door too, with institutional investors seeking a greater role for running the company.

Possibility of other players looking for management stake also could not be ruled out, a marketman said and pointed to a surge of over 10 per cent in stock prices at the bourse after the announcements by the company.

"The promoters informed Satyam that all their shares in the company were pledged with institutional lenders and that some lenders may exercise or may have exercised their option to liquidate shares at their discretion to cover margin calls," the company said.

Lenders often sell shares to meet margin requirements, especially after an erosion in the stock value.

Satyam chairman Ramalinga Raju's family holds 8.61 per cent through SRSR Holdings, while institutional investors such as ICICI [Get Quote] Prudential, Aberdeen Asset Management and Fidelity hold 60 per cent.

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