The Hindu : Front Page : Three-member board constituted for Satyam

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Monday, Jan 12, 2009
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Front Page

Front Page

Three-member board constituted for Satyam

Ashok Dasgupta

Centre names Parekh, Karnik and Achutan; new board meets today

Kiran Karnik

NEW DELHI: In a swift action to salvage the beleaguered Satyam Computer Services, the Centre on Sunday set up a three-member board by nominating HDFC chairman Deepak Parekh, the former Nasscom president, Kiran Karnik, and the ex-SEBI member, C. Achutan, as independent directors to take charge of the Hyderabad-based IT major and chart out the future course of action.

The new board is to hold its first meeting on Monday.

Making the announcement at a hurriedly convened press conference here, Corporate Affairs Minister Prem Chand Gupta said: “The board is expected to meet within 24 hours and decide [on] the further course of action.”

More members soon

The board could have a maximum of 10 members, as per the order of the Company Law Board, and therefore more persons would be inducted soon.

On Friday, the government sacked the remaining three directors on Satyam’s erstwhile board within days of its founder-chairman B. Ramalinga Raju, owning up a Rs. 7,100-crore accounting fraud and quitting his post.

According to Mr. Gupta, it “would be an independent board with full authority to act in the interest of the company ... It will make its own assessment and take appropriate decisions.”

Deepak Parekh

Its priority would be “to restore the company’s credibility, customer confidence and employee morale, as also to safeguard the interest of investors and other stakeholders.”

As all the three members would act as independent directors, the Minister expressed the hope that the new board would be able to provide the “necessary vision, along with responsible and accountable leadership, to the company in this hour of crisis.” With regard to the institutional investors’ demand for representation on the board, Mr. Gupta said: “All options are open in the interest of the company … Further appointments to the board may be made subsequently as required.”

An important step: CII

M. Rajeev reports from Hyderabad:

Confederation of Indian Industry director-general Chandrajit Banerjee said swift action by the government was required to save Satyam and the appointment of the new board was “an important and clear step” in that direction.

Speaking to The Hindu over the telephone, Mr. Banerjee said the board now had a “good combination,” as the three members were reputed in their fields for their practices in corporate governance.

Related stories:

Ramalinga Raju sent to judicial custody

Probe to cover eight other family firms

Raju treated with kid gloves

SEBI likely to move court to quiz Raju

Raju led the Board of Directors up the garden path

Ramalinga Raju surrenders to police

Centre disbands Satyam board

Satyam takeover not possible for now

Government seizes Satyam's documents

SEBI begins probe into Satyam fraud

No arrest based on statement, say police