The Company Law Board on Wednesday asked the former founder of Satyam Computer Services B. Ramalinga Raju and two others to furnish their bank accounts and asset details while barring them from selling or pledging the company's shares till further notice.
“The orders have been issued by the Company Law Board. The details have to be given in a sealed cover by Feb 20,” Corporate Affairs Minister PC Gupta told reporters at a hurriedly convened press conference in New Delhi.
“They have been told they should not mortgage or sell any of their shares in the company,” the minister said, adding no decision was, however, taken on bypassing the boards of Maytas Properties or Maytas Infrastructure, also promoted by the Raju family.
The other two people who were issued the directives by the Company Law Board are Raju's brother and former Satyam managing director B. Rama Raju and former chief financial officer Vadlamani Srinivas.
Earlier in the day, Gupta said the government has taken no view on the proposals from domestic and international companies to buy the fraud-hit Satyam Computer Services and left the decision to its new board.
"There are many corporate houses, they are interested," Gupta said, when asked if the government was interested in hiving off the fraud-hit firm to engineering and construction giant Larsen and Toubro.
"The government has not taken any view on this. We feel it is for the board to take a call. As far as the government is concerned, there is no such thinking, no such move," he added.
The minister said Satyam had several Fortune 500 companies as clients, besides doing work for several governments. "The government would try to preserve the company so that it does not lose face in the international market."
In Mumbai, India's markets watchdog also decided to tighten the disclosure norms for company promoters who pledge shares with lenders after finding lapses during its probe into the Rs.70-billion ($1.43 billion) Satyam Computer Services scam.
“The founders must disclose shares with lenders,” C.B. Bhave, chairman of the Securities and Exchange Board of India (SEBI), told reporters in Mumbai after a meeting of the board of the markets watchdog.
“This will be mandatory for listed companies.”
He said such disclosures would be of two types. First, when the number of shares pledged goes beyond a particular limit, SEBI would call for event-based disclosures. It would also call for periodic filings by the promoters.
Bhave, however, did not specify what the watchdog meant by "particular limit". “We will define this in the coming weeks.”
The regulator also said that the Satyam scandal, in which its founder and former chairman B. Ramalinga Raju said he had inflated the company's cash balances and profits, would trigger a long-term system improvement.
“Whenever any such scandal happens, we need to look for long-term systemic improvements. Sometimes one can come up with quick solutions, like the one on disclosure of shares,” Bhave said.
He also maintained that the size of the Satyam scam was difficult to ascertain and that it was trying to ascertain how much cash the troubled IT firm actually held in different bank accounts.
“We will approach banks to verify the amount of Satyam's deposits.”
He also said while officers in his organisation had questioned the auditors and the finance department of Satyam, they had not been able to question the firm's founder Raju yet.
Officials of the Crime Investigation Department (CID) of Andhra Pradesh police are questioning Raju, his brother and the former chief financial officer.