In less than a month, Satyam Computer Services [Get Quote], the disgraced Hyderabad outsourcing company, has come almost full circle. On Jan. 6, Satyam was being entertained as a desirable acquisition target by suitors from HCL Technologies [Get Quote] to Wipro [Get Quote] to IBM, Hewlett-Packard, L&T Infotech, and Tech Mahindra [Get Quote].

Even private equity firms like KKR and TPG were interested in Satyam. Then on Jan. 7, Ramalinga Raju, Satyam's chairman, confessed to having orchestrated a massive fraud at India's fourth-largest IT services company. Suddenly, Satyam became an untouchable, deserted by potential buyers who worried about the level of toxicity in the company.

Now suitors have begun cautiously to circle the company once again. Some of the previous wooers -- L&T Infotech and Tech Mahindra, for instance -- are back in the fray, although, with the stock price down 68% since Raju's confession on Jan. 7, the price tag to take over Satyam is now a lot lower.

Others reported to be interested in scooping up what's left of Raju's company include new potential bidders such as Hinduja Global Solutions, part of the British-based Hinduja Group.

A spokesperson for Hinduja would not comment. On Feb. 1, Spice Group, a telecom operator run by Indian industrialist B.K. Modi, offered to buy 51% of Satyam for $400 million. "That's a realistic bid," says Viju George, IT analyst at Mumbai's Edelweiss Broking.

Calming the Markets

What has changed for Satyam? Mostly this: The government-appointed board comprising Deepak Parekh, a respected businessman and chairman of mortgage lender HDFC [Get Quote], and Kiran Karnik, the former president of powerful software association Nasscom, has calmed the markets, Satyam's customers, and employees.

And it has restored some confidence in India's outsourcing business. Analysts say a Jan. 15 announcement of quarterly results made people view Satyam as a going concern, a real business with employees and some value, even if it has $1 billion in debt and, following the admission by Raju, a balance sheet that investors can no longer quite trust. "Satyam has assets, clients, and business, but we don't know how profitable it is," says Harit Shah, IT analyst at Mumbai's Angel Broking.

The new board has been busy. Its first order of business was appointing new auditors, KPMG and Deloitte Touche Tohmatsu, to restate Satyam's accounts, negating those done internally by Ernst & Young and endorsed externally by PricewaterhouseCoopers.

On Jan. 14 it announced a search for a new chief executive and chief financial officer to replace Raju and ousted CFO Srinivas Vadlamani, then appointed a new audit committee and new legal adviser, arranged for additional funding to pay salaries through March, and reassured key customers of the firm's viability.

Finally on Jan. 27 it appointed Boston Consulting Group as a management adviser, and investment banks Goldman Sachs and Mumbai's Avendus to "advise the company on several strategic options including identification of strategic investors."

As for the buyout bids Satyam has been receiving, board member T.N. Manoharan says the company is not considering selling parts of Satyam separately. "It would be contrary to the Indian government's mandate regulating the company's affairs as a going concern," he said in a press statement after a Satyam board meeting on Jan. 15.

 "It is important to remember that Satyam is a government-administered company reporting to the Company Law Board and the Ministry of Corporate Affairs."

Lingering Doubts

The fear about Satyam's viability, however, lurks, and while the situation is certainly better than a few weeks ago, new problems keep emerging with regularity. Newspapers recount bizarre confessions from Raju family aides about being instructed by the Raju family to load original documents into cars and keep them mobile around the city of Hyderabad so investigators wouldn't find them.

And television shows are full of stories pertaining to Raju's deep political links in Andhra Pradesh state and questions about why the Securities & Exchange Board of India (Sebi) has not yet been allowed to question Raju while he is in police custody, or why none of his assets had been attached. The regulator says the matter is in court and it cannot comment. Raju's lawyer S. Bharat Kumar was not available for comment.

There's more. On Jan. 24, the public prosecutor of the Andhra Pradesh Crime Investigation Dept. said that CFO Vadlamani admitted under police interrogation that the company actually had just 40,000 employees, vs. the 53,000 claimed officially.

The company's new board later insisted that the employee tally was indeed 53,000. PricewaterhouseCoopers has said its accounts could no longer be relied upon, and two of PwC's auditors are currently in police custody. On Jan. 27, PwC's India head, Thomas Mathew, resigned, and the firm's CEO, Sam DiPiazza, canceled a trip to the World Economic Forum in Davos and rushed to Mumbai.

The worry about fleeing clients has been of foremost concern to the new board, which has spent days talking to Satyam's customers and trying to persuade them to stay. Still, on Jan. 19, State Farm Insurance severed its long- and short-term contracts with Satyam, citing the uncertainties around the company as the cause.

Others seem determined to stay. On Jan. 29, Bombardier, which runs an engineering research center with Satyam, sent a letter to New Delhi declaring its hope that "the Indian government will make sure that the human capital and assets involved in the engineering center will be preserved."

Board Likely to Appoint New CEO Soon

Software industry executives say chief technology officers in the U.S. are sitting on edge, considering other vendors but waiting for definitive news about Satyam's continued existence in some form or another.

Indian competitors like Tata Consultancy Services [Get Quote], Wipro, and Infosys [Get Quote], concerned about their image locally and with customers, say they will not add to the mayhem by poaching Satyam staffers.

"We are not approaching any Satyam client or employee. If someone approaches us, we will take a call," said N. Chandrashekar, chief operating officer of TCS, during the company's quarterly results announcement on Jan. 15. Nasscom has also requested IT companies not poach from Satyam "as it would affect the business continuity of the company."

Multinational rivals like IBM and Accenture are therefore most likely to be the beneficiaries of the Satyam fallout; even before the scandal broke, both had announced plans to increase hiring this year.

Analysts in the tech sector have suspended their coverage of Satyam for now. They say they will resume when the uncertainty abates, most likely when the board appoints a new CEO or CFO.

That is likely to happen on Feb. 5, when the board reconvenes. On Feb. 1 securities regulator SEBI announced it would relax India's normally strict pricing rules for potential acquirers to make an open offer for Satyam, which Chandrakant Bhave, the chief of SEBI, called "an abnormal case."

The current rule says an investor holding a 15% stake in any company has to make an open offer for an additional 20%. The open offer has to be made at a price not less than the previous six-month average of the company's share price; but since Satyam's shares have plunged 75% in less than two months, SEBI will now amend the regulation to "enable a transparent process to arrive at a price."

Officials from the U.S. Securities & Exchange Commission are due to travel to India in two weeks to discuss the Satyam case with their Indian counterparts.

In the meantime, Richard Dailly, India head of risk consultancy Kroll, says that, as the matter drags on, the Satyam fraud will have wider consequences for India. "It will shake confidence. People in the West will be more skeptical about their vendors and think about business continuity in a different light."