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Kamal Narang

Mr P.C. Gupta, Minister for Corporate Affairs, addressing a press conference in the Capital on Sunday. —

Our Bureaus

New Delhi/Mumbai, Jan. 11 Mr Deepak Parekh, Mr Kiran Karnik, and Mr C. Achutan have been mandated by the Government to shoulder the uphill task of crisis management at the beleaguered Satyam Computer Services. The three-member Board is to meet on Monday in Hyderabad.

The urgency on part of the Government to appoint members for the re-constituted board is understood to have been triggered by a legal corporate governance requirement. According to official sources, the vacuum created by disbanding the previous board, pursuant to a Company Law Board (CLB) order on Friday, could have led to delisting of the company from the stock exchanges.

Though the CLB has allowed the appointment of up to 10 members, the Government on Sunday appointed three eminent citizens who have the acumen to stir the company out of the current financial imbroglio. “If required, the Government will appoint more directors,” said the Corporate Affairs Minister, Mr Prem Chand Gupta, while announcing the names on Sunday.

However, there were indications that names of 2-3 additional members could be announced shortly. As regards who would head the Satyam board, Mr Gupta said that this decision would be left to the members. “The first priority would clearly be to restore the company’s credibility, customers’ confidence and employee morale, as also to safeguard the interests of investors and other stakeholders.

“Having said this, it is important to underline the fact that this would be an independent board with full authority to act in the interest of all stakeholders. The board will, therefore, make its own assessment and take appropriate decisions,” he said.

According to sources, there are indications that the first board meeting (on Monday) is likely to be chaired by Mr Parekh since he is the senior-most among the three members. In fact, the appointed members enjoy tremendous credibility in the corporate world, which has welcomed their positions on the board.

They have specifically appreciated the Government’s effort to rope in experts from the key fields. While Mr Parekh, Chairman of Housing Development Finance Corporation Ltd, comes with a knowledge base in banking and finance, Mr Karnik brings with him vast experience in information technology and is past president of Nasscom. Mr Achutan, from the legal background, is a former member of SEBI and past presiding officer of Securities Appellate Tribunal.

Agreeing that a company of Satyam’s size would require a Managing Director or CEO to look after its day-to-day operations, sources said, “A decision would be taken after the newly constituted board has assessed the situation.”

The Ministry indicated that it would like to keep an arm’s-length approach with the company, leaving it to the board to take the final call on important issues. On whether the Government would consider the request of existing stakeholders like Lazard for a berth on the board, the Minister reiterated, “we have received a letter from them. My officers are looking into it.”

On whether the ongoing inspections by the Ministry’s field officers in coordination with SEBI officials have given any preliminary indications of siphoning of funds by the management of Satyam, the Corporate Affairs Minister said, “I don’t want to say anything at present, as I don’t want to speculate. We at the Ministry would wait for the Registrar of Companies report, which is expected by January 14, and then take a call on further course of action.”

Speaking to Business Line after the announcement, Mr Karnik said, “Our immediate focus would be to ensure Satyam’s stability and business continuity, while minimising disruptions.” Both Dr Parekh and Mr Achutan maintained that they would first have to meet, and understand the magnitude of the issues.

More Stories on : Economic Offences | People | Policy | Satyam Computer Services Ltd | Software

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