Govt sacks Satyam Board, to appoint 10 new directors
The Govt on Friday disbanded the Board of scam-hit Satyam for "failing to do what they were supposed to" and would soon appoint 10 new directors, who would hold its first meeting within a week.delhi Updated: Jan 09, 2009 22:35 IST
The government on Friday disbanded the Board of scam-hit Satyam for "failing to do what they were supposed to" and would soon appoint 10 new directors, who would hold its first meeting within a week.
The decision was taken after the Company Law Board gave permission to the Government on its interim prayers, Corporate Affairs Minister Prem Chand Gupta told reporters in New Delhi. The Government had approached CLB as "it is the prime concern of the Government to ensure that the operations of the company continue uninterrupted," he said. It is learnt that the names of HDFC Chairman Deepak Parekh and Jayant Verma, professor with IIM Ahmedabad among others are being considered for the nominee directors in the board.
However, Parekh said he has not been contacted by the government.
"The (current) board ceases to exist. How can they take a meeting," Gupta said in reply to a query. He said the new board would hold its first meeting in seven days and would appoint the management, as it is not the jurisdiction of the Government to do so. The current Board of Satyam was left with only three members, as others resigned after Satyam landed in controversy, beginning its plans to take over Maytas, a company run by founder Chairman B Ramalinga Raju's family.
Gupta said the Centre decided to approach CLB, which on the petition of the government, has allowed its interim prayers to restrain the current directors of Satyam from acting as directors.
CLB also allowed the government to appoint 10 nominee directors to function as directors of the company. "Following this, the government is considering appointment of suitable persons as directors of Satyam," he said. Gupta said the developments so far indicate that the current board of Satyam has failed to do what they were supposed to do.
"Satyam case is an aberration. The credibility of Indian corporate sector, in general, and IT sector, in particular, should not be allowed to suffer because of this," he added. He said the Government is deeply concerned and determined to take all possible actions under the law to bring to book at the earliest, all those persons responsible for betraying the faith of lakhs of shareholders, thousands of employees and customers within and outside the country. "The greed and misdeeds of a few persons who were at the helm of affairs of the company could have caused the present unfortunate situation. We are determined to reach the truth but are equally concerned with the fate of employees and other stakeholders," he said.
He said if found guilty PriceWaterHouseCoopers could be banned. Also the apex chartered accountants institute ICAI has already initiated actions against the auditors of the Satyam Computer.