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Former Satyam management cannot sell assets

BS Reporter in New Delhi | January 22, 2009 10:20 IST

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The Hyderabad branch of the Company Law Board on Wednesday restrained Satyam's [Get Quote] former whole-time directors, chairman, chief financial officer and company secretary from selling or mortgaging their assets.

The CLB order comes a day after the government filed a petition seeking restraint orders so that these five former members of the top management would not divert or siphon off funds from Satyam.

The directors who have come under this CLB order are former chairman and founder of Satyam B Ramalinga Raju, erstwhile whole-time directors B Rama Raju and Rammohan Rao Mynampati (who briefly functioned as interim CEO after the January 7 crisis), former chief financial officer Srinivas Vadlamani and company secretary G J Jayaraman.

These five have to submit details of their bank accounts and movable and immovable properties in India and abroad by February 20 this year, said Prem Chand Gupta, minister for corporate affairs.

This is the second CLB order in the government's favour, after the company affairs ministry obtained a favourable interim verdict to supersede Satyam's board. At present, there are six government nominees in the board of Hyderabad-based software services firm.

After B Ramalinga Raju confessed to manipulating Satyam's accounts, government investigators from the Serious Fraud Investigation Office have confiscated documents to discover how the fraud was committed. Two days back, the government extended the SFIO probe to cover two related firms of Ramalinga Raju -- Maytas Properties Ltd and Maytas Infra Ltd, to check whether these two realty and construction firms were used to divert funds from Satyam.

Asked about potential buyers for Satyam, Gupta said, "Today the priority before the board is to bring back Satyam from its crisis so that it can restore confidence with clients and employees."

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