Larsen & Toubro Ltd denied media reports on Thursday it would put a revival plan to the board of fraud-hit Satyam Computer Services Ltd.
Larsen was a front-runner to buy the Hyderabad-based outsourcer, the Business Standard said, adding Satyam's institutional investors such as Life Insurance Corp and ICICI Prudential Life Insurance backed a bid.
Larsen, which holds about 4 percent in Satyam, had previously said it may look for an alliance with the software services exporter once the company's accounts had been fully investigated.
The Economic Times, citing investment banking and government sources, said Larsen would put a price on its bid once KPMG and Deloitte, Satyam's new auditors, had released restated results.
A spokesman for L&T said the company was not presenting to Satyam's board. "This is totally incorrect. We are not making any presentation. L&T is refuting all these media reports," D. Morada told Reuters.
Satyam, India's fourth-largest software services exporter, has been battling for survival since founder Ramalinga Raju resigned as chairman earlier this month, revealing profits had been falsified for years and $1 billion of cash on the books did not exist.
Separately, Maytas Infra Ltd, a building firm founded by Raju's family, said the Serious Fraud Investigation Office was investigating its accounts, delaying its quarterly results beyond a Jan. 31 deadline.
Raju, his brother, Satyam's ex-managing director, and the company's former CFO, are in police custody. A senior police official said the authorities would likely seek on Thursday to keep hold of the former executives over the weekend as questioning had not yet been completed.
The Economic Times said telecoms software firm Tech Mahindra Ltd, part of Mahindra & Mahindra Ltd, was also a strong contender to take control of Satyam.
India's federal corporate affairs minister has said several companies were interested in acquiring Satyam.
Satyam's new, six-member, government-appointed board begins a 2-day meeting on Thursday to look at how to secure emergency funding to tide the company over in the wake of the country's biggest corporate scandal.
The board is also expected to consider appointing an investment banker to aid the rescue effort, as well as pick a chief executive and a chief financial officer.
JPMorgan and Goldman Sachs are among banks shortlisted to advise Satyam, banking sources said, and could be tasked with finding a strategic investor.
"The top priority at this point is to ensure that customers are not impacted because of this scandal," said Avinash Vashistha, chief executive at consultant Tholons Inc. "Then, you have to assure employees they will be paid and the company will not collapse tomorrow."
The Hindustan Times quoted board member Kiran Karnik as saying Satyam had received notice from two large customers that they were terminating their contracts.
"Two large customers have given us notice on leaving, but others are there and many of them have indicated they would like to renew and expand," Karnik told TV, the newspaper said, without naming the clients.
Satyam said on Monday that U.S.-based State Farm Insurance had cancelled its contract with the company. Other major clients include Nestle and General Electric.
Board member Deepak Parekh has said Satyam has 17 billion rupees ($350 million) in receivables, and the board is in talks with banks over funding and was doing all it can to pay staff.
Analysts have said any deal could be difficult until the full extent of the Satyam fraud is known. Lawsuits arising from the scandal could also deter any would-be suitors.
"What is unknown at Satyam is its liabilities because of the nature of the accounting fraud and because of the legal issues," Vashistha said. "I can't think of any Indian or foreign firm who will be interested in buying Satyam in the present shape."