January 16, 2009 6:12:16 pm
Satyam’s expanded board will meet on Saturday with the focus on raising funds to keep the business alive and may also have to deal with complaints on its choice of auditor to restate the company’s financials.
The board,whose strength was doubled with appointment of three members by the government yesterday,would meet to find ways to insulate the company’s stakeholders from the impact of a Rs 7,800 crore fraud disclosed by its founder Ramalinga Raju last week.
“The priority is… to safeguard the interest of employees,customers and investors,” board member Tarun Das said today.
Das,also chief mentor of industry body CII,was appointed along with T N Manoharan and S Balakrishna Mainak to the board,which already has Deepak Parekh,Kiran Karnik and C Achuthan as members.
Parekh has said the company can raise funds by mortgaging assets,besides having receivables of nearly Rs 1,700 crore. The board,which has roped in auditors KPMG and Deloitte to restate the IT firm’s books,is also expected to elect its chairman and also launch a search for a new CEO and a CFO.
Meanwhile,chartered accountants regulator ICAI President Ved Jain told reporters: “We have written to Satyam board that KPMG cannot be appointed auditor… as they are not our members. We expect the board will consider the issue…”
A KPMG spokesperson said: “It is our understanding that the scope of work (at Satyam)… is not reserved for CAs registered with the ICAI.”
The company’s scrip settled 20.44 per cent higher at Rs 24.45 on the Bombay Stock Exchange. A Hyderabad court,meanwhile,posted the bail plea of Raju for hearing on January 19,the same day as a prayer by regulator SEBI for interrogating the IT company’s founder and two others.
The court also reserved its order on the police’s petition seeking custody Raju,his brother Rama Raju and Satyam’s former CFO Vadlamani Srinivas for seven days.
The board held its first meeting on January 11 when it met with senior Satyam executives to assess the company’s health in the wake of Raju’s revelation that he had been cooking the company’s books for years.
Satyam’s statutory auditor Price Waterhouse,which is under attack for overlooking the fraud at Satyam,today lost its mandate as the knowledge partner for industry body Ficci’s flagship annual entertainment event — FRAME.
“From this year,Ficci has partnered with international auditing firm KPMG for FRAMES,” a senior official of the chamber said.
Elsewhere,trouble was brewing for other Raju-family promoted companies. Government-run trading firm MMTC decided to withdraw from equity participation in a firm to be promoted by Maytas Group for setting up a multi-services Special Economic Zone.
“In view of the recent developments related to Satyam Computer Services… the board of directors of MMTC at its meeting today reconsidered the investment proposal,” MMTC said.
The CPI-M separately demanded that the about 17,500 acres of land given to Satyam and two Maytas companies by the Andhra Pradesh government be confiscated and that the proceeds be used to pay the salaries of the IT company’s 53,000 employees.
Shares Surge 40%
The battered Satyam Computer on Friday got some respite and surged as much as 40 per cent in early morning trade on the Bombay Stock Exchange after the government appointed three more directors to salvage the tainted firm.
Satyam Computer opened firm on the BSE and then rallied further to witness an intra-day high of Rs 28.40,a jump of 39.90 per cent from its previous closing price.
Similarly,on the National Stock Exchange,the scrip opened at Rs 21,touched an intra-day high of Rs 28.40,a rise of 39.90 per cent from its last close.
The government has appointed three more professionals on Satyam’s board,even as member Deepak Parekh said the IT firm can raise funds by mortgaging assets,dispensing with the need for central assistance.
On the volume front,good movement was witnessed as over 2.98 crore shares exchanged hands on the BSE and over 5.89 crore shares got traded on the NSE.
Apex industry association CII’s chief mentor Tarun Das,noted chartered accountant and a past president of ICAI T N Manoharan and S Balkrishna Mainak of LIC,a major investor in Satyam,would join Deepak Parekh,Kiran Karnik and C Achuthan at the board.
The government-appointed board of crisis-ridden Satyam Computer will meet again on Saturday to take stock of the situation.
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