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Satyam CEO, CFO should be insiders: Govt
Leslie D'monte & Aditi Phadnis | January 17, 2009 03:43 IST
The government has suggested that the new Satyam Computer Services [Get Quote] board should also look within the company to appoint a CEO and CFO.
"I have personally recommended this," said Prem Chand Gupta, minister of corporate affairs, "since it will take quite some time for a CEO from outside the company to take stock of a new business. And we do not have much time".
He explained the government also wanted a person for the top post who understood the client market closely and Satyam "does have many such good people".
Former vice-chairman of Wipro [Get Quote] and CEO of its global IT business Vivek Paul's name had emerged as the front-runner for the post of CEO of Satyam. Sources said Paul was being offered a 5 per cent stock option in addition to attractive pay package. "This is all media speculation," is all Gupta would say.
He also added there were 45-odd banks whose roles were being scrutinised for alleged involvement in Satyam's financial fraud and deals of the two Raju-owned Maytas properties. He hinted the banks were being scrutinised for conniving or not questioning the use of money being diverted to activities other than IT services (such as real estate) by former chairman Ramalinga Raju, who admitted to falsifying accounts.
Asked about the company's cash position, Gupta admitted that the situation was not encouraging. He reiterated board member Deepak Parekh's Thursday statement that the company had around Rs 1,700 crore in receivables from marquee clients. But owing to a forex loss of around Rs 200 crore and debt of Rs 200 crore each with Citibank and BNP Paribas, net receivables stood at Rs 1,100 crore, he explained.
He added, though, that the new board is negotiating with marquee vendors to halve the number of debtor days (to around 30) so that the company could have cash in hand soon.
"Satyam has great assets � people, clients and land too," Gupta said, adding: "We hope the employees stand by the troubled company and take a long-term view in this hour of crisis. On my part, I appeal very strongly to all IT companies that they restrain themselves from poaching Satyam clients. Satyam's fall will be the IT industry's loss."
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