The government today expanded the three-member Satyam board to six to include S Balakrishnan of Life Insurance Corporation, Tarun Das, chief mentor of the Confederation of Indian Industry and T N Manoharan, former president of the Institute of Chartered Accountants of India.
The expanded six-member board will meet Saturday, January 17, according to board member Deepak Parekh, who is also HDFC chief.
Satyam's share price, however, tumbled 33 per cent today after it became clear that the government has no plans for a financial package to bail out Satyam. Overall, Satyam has lost 89 per cent of its market value since Raju 's January 7 admission that he had padded the accounts for several years.
"The company has not asked for any package, it may not need that," Prem Chand Gupta, minister for corporate affairs, told reporters in New Delhi this morning.
At an evening press conference, Gupta, however, said the government would extend full support to the new six-member board, and hoped that Nasscom and other IT firms would also cooperate with the new board.
The induction of an LIC representative represents an acknowledgement for an institutional nominee on Satyam's board. The institutions collectively hold 76.4 per cent in Satyam, and LIC more than 4 per cent. Lazard had earlier requested the government for a board position.
The government had nominated Deepak Parekh, former head of National Association of Software and Service Companies Kiran Karnik and Securities and Appellate Tribunal former presiding officer C Achuthan January 11, after superseding the earlier board January 10.
Although the government had earlier said it would put in place a 10-member board to run the ailing company, several industrialists whom the Department of Corporate Affairs (DCA) approached have turned down the suggestion that they leverage their managerial experience to turn the company around. Industrialists M V Subbiah from the Murugappa group is one such.
In the circumstances, it may take time to get 10 directors on the board as was originally visualised.
Gupta also said Deloitte and KPMG have started work on restating the Satyam accounts and the report is expected in three months. He added the first impression from directors suggested that Satyam's operations are sound and investors are, by and large, willing to remain with the IT company.
Meanwhile, Parekh, who met Gupta and Montek Singh Ahluwalia, deputy chairman of the Planning Commission, today said the company had receivables from customers worth Rs 1,700 crore. "We are trying our best to salvage the situation. There are a large number of receivables. If they come on time, then we can generate cash by hypothecating some assets," he told reporters.
He added that bringing in a strategic investor could be an option before the board.
Mynampati seeks Rs 150 crore bailout: Economic Affairs Secretary Ashok Chawla today revealed that interim CEO and former board member Ram Mynampati had sought urgent assistance of Rs 150 crore to meet the health insurance liabilities of Satyam's employees in the United States.
Mynampati is currently in the US to meet clients and reassure them about the company's ability to continue serving them, besides restoring confidence among employees in the aftermath of Ramalinga Raju's disclosures.
On whether the government would provide indirect support to Satyam, Chawla said: "It depends on the board coming to kind of conclusion; what are their requirement and the actual accounts indicating what it is."