Australian telco Telstra is pulling the plug on a A$32m contract with Satyam and handing the work to EDS.

The telco's annual applications support contract will not be renewed, despite a visit from Satyam's chief executive A S Murty last week.

Sources blamed either under-performance by Satyam or its ongoing financial scandals.

Meanwhile iGate is talking to private equity firms to get help and advice for its takeover bid for Satyam. Despite its serious financial problems - company founder Ramalinga Raju admitted inflating revenues by more than $1bn - the company is a tempting target because its shares have fallen so far.

But any bidder would need courage - the true state of Satyam's finances is still not known.

Indian media have also confirmed that the Central Bureau of Investigation is investigating the scandal and is questioning the Raju brothers and the arrested auditors from PwC.

IGate, along with Spice Group, Tech Mahindra and Larsen & Toubro have all been named as possible bidders. Satyam said last week it had received several bidders including private equity firms.

Satyam has begun the process of approving bids - companies must provide proof of funds to be considered. ®

Related stories

• Satyam sold to BT-backed Indian firm (14 April 2009)
• Indian Feds arrest more for Satyam fraud (7 April 2009)
• Satyam races to find buyer ahead of Indian election (31 March 2009)
• Satyam board mulls buyers shortlist (13 March 2009)
• Satyam gets greenlight for sale (6 March 2009)
• Satyam sale possible before probe ends (2 March 2009)
• PwC auditors fingered for Satyam fraud (30 January 2009)
• Satyam boss 'invented' thousands of staff (22 January 2009)
• Satyam investigators start to chase missing money (19 January 2009)
• Indian police raid PWC in Satyam probe (13 January 2009)
• Indian government holds Satyam execs in jail ahead of trial (12 January 2009)
• Police probe Satyam over $1bn blackhole (9 January 2009)
• Satyam chairman quits, admits faking accounts (7 January 2009)
• Big Indian outsourcer admits big problems (29 December 2008)
• Satyam investors blow roof off building firm takeover bid (18 December 2008)