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Shares in Satyam Computer Services Ltd (SATY.BO) could jump 20-30 percent on Monday after the government stepped in to appoint a three-man board in a bid to restore confidence in the outsourcing company rocked by the country's biggest corporate scandal.

Chairman of Satyam Computer Ramalinga Raju has resigned from the company’s board. In a shocking disclosure, he has revealed some financial irregularities in the company, including an inflated cash balance of Rs 5,040 crore.

Satyam Computer Services Ltd., which abandoned a $1.6 billion bid to buy companies linked to its chairman, gained in Mumbai trading after a report that Tech Mahindra Ltd. has proposed an all-stock merger.

Indian software services firm Tech Mahindra Ltd has approached embattled rival Satyam Computer Services for an all-share merger, the Economic Times reported on Tuesday, sending shares in both companies higher.

Disgraced former chairman of Satyam Computer Services B Ramalinga Raju and his brother were arrested late Friday night, two days after making a startling disclosure of about Rs 7,800 crore financial fraud in the IT company.

Minister for Corporate Affairs PC Gupta said the government has elected three members to the board of Satyam: HDFC chief Deepak Parekh, former Nasscom president Kiran Karnik and former Sebi member C Achuthan. Further appointment, Gupta said, will be made subsequently as required.

Investors have lost a whopping Rs 13,600 crore ($2.82 billion) in Satyam [Get Quote] shares in less than a month, since the skeletons started tumbling out of the company's cupboards.

B Ramalinga Raju’s startling admission of padding profits and cooking up bank balances at Satyam Computer has erupted into what can be described as India’s biggest corporate fraud to date. However, this is only a part of the big horror show.

Some of the big names in corporate India are believed to be in talks with some leading private equity funds to team up to acquire a strategic stake in Satyam Computer Services