The Hindu : Front Page : India Inc. welcomes constitution of new Satyam board

Online edition of India's National Newspaper
Monday, Jan 12, 2009
ePaper | Mobile/PDA Version

Front Page

Front Page

India Inc. welcomes constitution of new Satyam board

Special Correspondent

This will help ensure business continuity: Nasscom
Confidence-building measure for Indian business: Assocham

NEW DELHI: The appointment of a three-member board for the scam-ridden Satyam Computer Services on Sunday was hailed by India Inc. as well as the Hyderabad-based IT major itself.

While Satyam described the government’s action as the beginning of a “new chapter” in the company’s 20-year-old history, the corporate world expressed relief as the step would go a long way in restoring investor confidence.

“This is a vital stabilising development for Satyam, and it marks the beginning of a new chapter in the company’s history,” Satyam’s spokesperson said.

“It is the best news we have received in the past four weeks,” a company statement said, ever since the startling admission of financial fraud by its erstwhile chairman, B. Ramalinga Raju.

According to Satyam, the reconstitution of the board will “ensure the company’s continued operations, help maintain customer confidence and associate morale, and restore investor trust.”

Apex IT industry association Nasscom, in a statement, said: “This will help ensure business continuity, build confidence and protect the interest of all stakeholders – employees, customers and investors.”

Industry chamber FICCI’s president Rajeev Chandrasekhar said in a statement that the government’s priority “should be to ensure that the Satyam board immediately arranges financing to ensure that salaries and payrolls of the 50,000 plus employees are met without disruption.”

The decision to appoint HDFC Chairman Deepak Parekh, the former Nasscom President Kiran Karnik and the former SEBI member C. Achutan as a three-member board “will restore confidence of global investors in India Inc.,” he said.

CII Director-General Chandrajeet Banerjee said the three members appointed as Independent Directors on Satyam’s board “have deep understanding of corporate governance. I presume that more eminent people will be inducted in the board quickly.”

Apex chamber Assocham’s Secretary-General D.S. Rawat viewed that the reconstitution of the board and the government taking charge of the troubled company would send the right signals. “The move will save the company from the collapse. It is a confidence-building measure not only for the employers and stakeholders but also the Indian business as a whole,” he said.

A number of Satyam’s major stakeholders such as LIC and Lazard also hailed the move. Commenting on the board reconstitution, LIC Managing Director Thomas Mathew said the appointment of the eminent three persons would restore confidence among the investors, clients and shareholders.

Corporate analysts termed the government’s decision a “smart” move, as the three-member board comprised a financial wizard (Mr. Parekh), an IT genius (Mr. Karnik) and a wily investigator (Mr. Achutan).

The three best brains in their respective fields would have a legitimate claim to seek each and every piece of paper that could be related to the unprecedented financial fraud in India’s corporate history.

The trio would also be able to aid investigations being carried out by market regulator SEBI and the Serious Fraud Investigation Office of the Ministry of Corporate Affairs.

Printer friendly page
Send this article to Friends by E-Mail

Front Page