The government on Sunday put the future of Satyam Computer Service in the hands of a new board and gave it the mandate to do everything possible to put the scam-hit software giant back on its feet.
Karnik, former president of NASSCOM, was the guiding force for the Indian IT industry during the outsourcing backlash. A former MD at Discovery Networks India, Karnik is a post-graduate from IIM, Ahmedabad and worked for over two decades at ISRO.
HDCF Chairman Deepak Parekh has played a key role in the country’s banking and financial sector reforms. A CA by training, Parekh is part of the Investment Commission.
The first presiding officer of Securities Appellate Tribunal (SAT), Achuthan is an eminent legal expert and was also a member of market regulator SEBI. He is currently a director on the board of National Stock Exchange.
The board will have only three members for now: Housing Development Finance Corporation chairman Deepak Parekh, former chief of National Association of Software and Services Companies Kiran Karnik and a former member of the Securities and Exchange Board of India, C. Achutan.
Company affairs minister P.C. Gupta said, “It will function independently, make its own assessment and take appropriate decisions.” In short, fix the mess left behind by the founder chairman B. Ramalinga Raju.
A senior government official who requested anonymity as he is not supposed to talk to reporters said the government was “keeping all options open”. But he refused to specify whether options included a state-assisted bailout package.
The new board will assess Satyam’s cash position, precariously positioned as employees await the latest monthly salary, and prepare a proposal to raise funds to find the money to run the company.
The board may consult the government before approving any proposal to inject liquidity into the company strapped for funds after Raju confessed to financial irregularities adding up to Rs 7,000 crore last week.
The reconstituted board would also decide on whether to continue with interim CEO Ram Mynampati or induct a new management leadership team to take operational control of the company.
The members will choose a chairman from among themselves and induct more members in consultation with the government. “The first priority would be to meet as soon as possible,” Parekh said. Karnik said the first priority of the board would be to “ensure business continuity.” Achutan agreed with the two members and said the first board meeting will discuss ways on restoring the company’s battered image.
“This is a vital stabilising development for Satyam.... It is the best news we’ve received in the past four weeks,” a company spokesperson said.
He could have been speaking for the rest of Satyam’s 53,000 employees.