Board may see govt nominees in shake-up
The interim management of Satyam Computer Services Ltd could face a barrage of tough questions as the company’s new board, superseded by government intervention, involves regulators, report Gaurav Choudhury & Sandeep Singh.india Updated: Jan 09, 2009 21:09 IST
The interim management of Satyam Computer Services Ltd could face a barrage of tough questions as the company’s new board, superseded by government intervention, involves regulators and law enforcement agencies to rehabilitate the company after stunning revelations of India’s biggest corporate fraud yet.
Among the disgraced firm’s immediate priorities are a reconstitution of the board and there could be several government nominees in a new set-up.
Chairman and founder B Ramalinga Raju and his brother and managing director B Rama Raju had resigned from the board and it is not clear whether any or both of them would be attending a rescheduled meeting.
Raju, in his letter on Wednesday confessing the financial irregularities, said he would continue as chairman until the board had been strengthened.
The agenda of the new board is likely to include the appointment of a full-time chief executive officer. “There is a possibility that interim CEO, Ram Mynampati might be appointed as the full-time CEO,” a senior executive to private institutional investor said on condition of anonymity.
The new board, sources said, might also discuss the appointment of a new investment banker mandated with the task of thrashing out a turnaround strategy or scouting a possible strategic investor.
DSP Merill Lynch, brought in by Raju, had opted out of its services in the wake of the financial irregularities.
“The liquidity on the balance sheet at this point of time is not very encouraging and the immediate job is to ensure higher liquidity by looking at various options including outstanding receiveables,” a senior government official, involved in the investigations of the alleged financial fraud, said.
Satyam has to address the issue of paying salaries to its 53,000 staff that would total nearly Rs 500 crore per month.
The board would also take up the matter of appointing a new statutory auditor, after questions were raised about existing firm Pricewaterhouse’s work with allegations of negligence.