Board appointment marks new chapter in co's history: Satyam
Crisis-ridden Satyam Computer on Sunday described the government's decision to appoint a three-member board as the beginning of a new chapter in its 20-year-old history, even as India Inc expressed a sigh of relief saying the move would restore confidence of investors.india Updated: Jan 11, 2009 19:46 IST
Crisis-ridden Satyam Computer on Sunday described the government's decision to appoint a three-member board as the beginning of a new chapter in its 20-year-old history, even as India Inc expressed a sigh of relief saying the move would restore confidence of investors.
"This is a vital stabilizing development for Satyam, and it marks the beginning of a new chapter in the company's history", Satyam spokesperson said.
"It is the best news we have received in the past four weeks", a company statement said in eye of the storm following the startling disclosure of financial fraud made by its founder-chairman B Ramalinga Raju.
Ficci President Rajeev Chandrasekhar, said the priority of the government "should be to ensure that the Satyam Board immediately arranges financing to ensure that salaries and payrolls of the 50,000 plus employees are met without disruption."
The government's decision to appoint a three-member board comprising HDFC chairman Deepak Parekh, former Nasscom President Kiran Karnik and former Sebi member C Achutan, Ficci said, "will restore confidence of global investors in India Inc."
Satyam's domestic competitors such as Infosys and Wipro too have welcomed the move of the government to salvage the troubled company.
According to Satyam, the reconstitution of the board will "ensure the company's continued operations, help maintain customer confidence and associate morale, and restore investor trust."
The apex IT industry body Nasscom said, "this will help ensure business continuity, built confidence and protect the interest of all stake holders -- employees, customers and investors."
CII Director General Chandrajeet Banerrjee said the people selected for the board are most relevant, experienced and of highest quality.
"They have deep understanding of corporate governance. I presume that more eminent people will be inducted in the board quickly," Banerrjee said.
While, Assocham Secretary General D S Rawat said that the reconstitution of the board and the government taking charge of the troubled company would send right signal. "The move will save the company from the collapse. It is a confidence building measure not only for the employers and stake holders but the Indian business as a whole," Rawat said. Investors in IT services provider Satyam Computer Services, including major shareholder LIC and Lazard also hailed the government's move.
Commenting on the development, LIC Managing Director Thomas Mathew said the appointment of the eminent three persons will restore confidence among the investors, clients and shareholders.
Analysts have also welcomed the move of the government, albeit have expressed concerns regarding the huge amount of work to be done.
"(The) appointment of the three board members by the government today is a first positive step. However, the key issue is assessing the correct position of liabilities as well as liquidity," Forrester Research Senior Analyst Sudin Apte said.