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Satyam board to meet tomorrow, to tie up funds

January 21, 2009 12:37 IST
Last Updated: January 21, 2009 14:15 IST

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Two weeks after the Satyam [Get Quote] fraud came to light, its new board member, Deepak Parekh, said on Wednesday the company was in the process of securing funds and retaining its international clients.

Satyam has initiated discussion with a host of banks and institutional investors to get funds to keep its business afloat and has pledged some of its receivables to secure funding, Parekh told reporters in Mumbai on Wednesday.

"We are in the process (of raising funds). . .unless the accounts are restated and reach some level of accuracy, banks will be hesitant to lend to Satyam," Parekh said.

Satyam's new board will meet on Thursday and the day after to discuss issues including appointments of top executives and ways to raise funds, Parekh said.

The fourth-largest Indian IT major is in talks with its domestic and overseas clients to regain their lost confidence but has received a mixed response from clients on the continuity of their contracts, Parekh said.

"We are in talks with our clients...we have got a mixed response...they are not happy with the current status of the company's accounts," said Parekh, who is also chairman of HDFC [Get Quote].

Some of the documents of the company were found to have been forged and investigations into the scam would take some more time, Parekh said.

"Some of the documents are forged...there are many agencies involved in the case and it may take time (to find out the facts)," he said.

The IT major has received around 40 applications for the post of the top job in Satyam and would consider appointing the CEO and CFO in Thursday's board meeting, he said.

"I have personally got 40 applications...all of us are in the process of finding a good candidate (for the post of CEO)," Parekh said.

Satyam has large receivables and asked its sales team to recover those as early as possible, Parekh said.

"We have a large set of receivables to recover and we have asked our sales team (to get the receivables back as early as possible)," Parekh said, adding, "the board has kept all options open (to meet the fund requirements)".

Hyderabad-based Satyam Computer plunged into a grave crisis after its founder and former Chairman B Ramalinga Raju admitted to massive frauds in the company.

The corporate governance structure of India Inc. continued to be strong despite the Satyam episode, Parekh said.

"I strongly believe that the basic corporate governance framework continues to be robust in India and a few stray instances of misgovernance will not mar our standing," he said.

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