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Full-time directors for Satyam in a week
Sapna Dogra & John Samuel Raja D in New Delhi | January 14, 2009 02:22 IST
The government is planning to nominate full-time directors while inducting the remaining seven members in the reconstituted board of Satyam Computer Services Ltd [Get Quote], said a top corporate affairs ministry official.
The ministry of Corporate Affairs (MCA), which got an interim order from the Company Law Board to supersede the existing board of the Hyderabad-based company, is planning to make the announcement within a week to ensure smooth functioning at Satyam.
"We feel there is a need to have people who can devote full time to running the company, as the current directors have prior commitments", said the same official. MCA is yet to decide how many full-time directors it wants to nominate.
The government appointed three directors- Deepak Parekh, Kiran Karnik and C Achuthan � to the newly constituted board of Satyam on Sunday. In addition, the government also has initiated investigation by the serious fraud investigation office (SFIO) based on a report submitted by the registrar of companies (RoC) today.
The markets seem to have welcomed the government nominees as shares of Satyam went up by 45 per cent on Monday in Bombay Stock Exchange (BSE). However it fell 9 per cent on Tuesday.
Even as the government has taken control of Satyam, it is finding it difficult to convince people to become director of Satyam.
"The fear of legal liability is preventing people from accepting the role. With so many class action suits being filed, it's getting difficult to find", said a government official who is involved in the search process.
In addition, the board of Satyam also has to find a new chief executive officer (CEO) and chief financial officer (CFO) - a statutory requirement under the Companies Act and also under clause 49 of listing agreement, which deals with corporate governance norms.
The government is likely to initiate steps to ensure that Satyam's over 50,000 employees get their salary in time. The finance ministry is assessing the cash needs of the company and may advise banks to give loans to the company to meet salary commitments, which needs to be immediately attended to, said a senior finance ministry official.
"Debtor and creditor issues can be handled later", said the same official.
Satyam and banks are likely to work out a cash flow statement as to when the company will get payments from clients and when it has to make payments. Banks, in turn, will ensure that the company is not starved of cash.
Meanwhile, the prime minister today held a meeting at his residence to assess and decide on the future course of action with regard to Satyam.
TV reports say government is looking at a bailout package between Rs 1,600 - Rs 2,000 crore to Satyam to pay their monthly salaries for the next three months.
The meeting was attended by commerce minister Kamal Nath, Montek Singh Ahluwalia, deputy chairman of planning commission, home and former finance minister P Chidambaram and Prem Chand Gupta, minister of corporate affairs. Details of the meeting were not known.
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