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Satyam's new board: Govt sees no conflict of interest
January 12, 2009 15:43 IST
Last Updated: January 12, 2009 16:31 IST
The government does not see any conflict of interest in HDFC [Get Quote] chairman Deepak Parekh and former Nasscom President Kiran Karnik, who are directors on the board of Satyam's [Get Quote] competitors, being on the troubled company's board.
"There is no conflict of interest," Corporate Affairs Minister Prem Chand Gupta said when asked whether there could be a clash of interest in Parekh joining the Satyam board.
Karnik, who was nominated to the board of Saytam Computer Services by the government on Sunday, is also a board member of the Emergency Management and Research Institute (EMRI), a company promoted by disgraced Satyam Founder B Ramalinga Raju.
Karnik past-president of the Nasscom, is also a director on the board of EXL Services, a business process outsourcing (BPO) unit having direct competition with the Satyam BPO. Similarly, Parekh is on the board of WNS Global Services, another rival of Satyam BPO.
The spokespersons of EXL Services and WNS Global Services confirmed that Karnik and Parekh continue to be on their respective boards.
"It is up to the government and the Company Law Board to take a call on this matter," said WNS Global Services spokesperson.
In addition to Parekh and Karnik, the government on Sunday appointed past presiding officer of Securities and Appellate Tribunal C Achutan as a member of the new board of Satyam to steer the company out of the crisis.
Shares of Satyam were being traded at Rs 35.95 on the Bombay Stock Exchange, up 50.73 per cent over the previous trading session.
Corporate Affairs Minister Gupta further said that the new board of Satyam would do whatever is necessary in the interest of the company.
On whether the company could have problems in giving salary to its 53,000 employees, he said, "Let us not presume things.... We will see what is required to be done to keep the company afloat."
The three-member board, according to a statement issued by the government on Sunday, "would be an independent board with full authority to act in the interest of the company, the shareholders and all other stakeholders".
The new board has also been authorised, "to make its own assessment (of situation) and take appropriate decisions".
Although the government has appointed three-member board to take care of the IT major, as per the interim order given by the Company Law Board, the board can have a maximum of 10 members.
Gupta had earlier said more appointments could be made as and when the need arises.
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