Two days after the Rs-7,800 crore Satyam scandal erupted,the Government disbanded the board of the beleaguered IT giant and decided to nominate 10 new directors.
Late on Friday evening,the Andhra Pradesh police arrested Satyams disgraced founder Ramalinga Raju and his brother Rama Raju on charges of criminal conspiracy,cheating,forgery,misappropriation of funds and criminal breach of trust.
The companys Chief Financial Officer Valdamani Srinivasan rumoured to have attempted suicide earlier in the day would be arrested tomorrow,DGP S S P Yadav said.
The current board ceases to exist and there would not be any meeting tomorrow, Corporate Affairs Minister Prem Chand Gupta said after emerging from a three-hour meeting with his ministrys top brass. The Centre is considering appointment of suitable persons as directors of Satyam following interim permission by the Company Law Board, which will meet in the next seven days.
The high-profile Satyam board was to meet in Hyderabad Saturday to discuss the fallout of the biggest accounting fraud in Indias corporate history,and the fate of Satyams 50,000 employees.
Investigators raided Satyams Hyderabad offices overnight and seized documents. Eight Satyam Group companies Maytas Properties,Maytas Infrastructure,Satyam BPO,Nipuna Services,Knowledge Dynamics,Nitor Global Solutions,CA System ASP and Satyam Venture Engineering Services are under the Governments scanner.
Satyams auditor Price Waterhouse which did not detect the fraud carried out over several years will have to wind up its Indian operations,if found guilty of any wrongdoing,minister Gupta said.
Satyams new board will decide on the new management of the company,the minister said. The Government has decided to approach the Company Law Board to ensure that the operations of the company continue uninterrupted.
There was,however,no decision yet by the Government to take over Satyams management,Gupta said.
Raju will appear before a Securities and Exchange Board of India (SEBI) probe team at 4 pm tomorrow to answer questions on the sale and purchase of Satyam shares during 2004 and 2009. His counsel Bharat Kumar appeared before SEBI on behalf of Raju today.