New Delhi, Jan 11: The Ministry of Corporate Affairs on Sunday constituted a new three-member Satyam Board comprising HDFC Bank chairman Deepak Parekh, former NASSCOM president Kiran Karnik, and former SEBI member C Achutan.
"We will ensure that Satyam continues to function in the best interests of the company and its shareholders," Corporate Affairs Minister Premchand Gupta told reporters here, announcing the names of the new board members.
"The new board will meet in next 24 hours," the minister said a day after the company's founder-chairman B. Ramalinga Raju and his brother Rama Raju surrendered before the authorities for financial fraud and were remanded to judicial custody till Jan 23.
"Having considered all aspects, the government has decided to reconstitute the Satyam board with experts in different fields," Gupta said. "Such a board will provide necessary vision and accountable leadership to the company in the hour of crisis."
Lazard not to seek berth
He, however, declined comment when asked if investors in Satyam like Lazard and Life Insurance Corp of India would also be given representation on the company's board eventually.
UK-based Lazard Asset Management, the largest shareholder of troubled IT firm Satyam Computer Services, however said it has not asked for berth in the restructured board of the company.
"Reports that Lazard Asset Management has sought a seat on the Satyam board of directors are incorrect," the fund house said in an emailed statement.
The statement, however, said, "On behalf of our investment clients, we have communicated to SEBI, the Ministry of Corporate Affairs of India and to the interim management of Satyam."
The communication requested that as a large shareholder, the asset management company would like to be informed on all matters being considered regarding Satyam, it said. The asset manager holds about 7.4 per cent stake the troubled IT-firm Satyam
Gupta said the reconstituted board will make its own assessment of the situation and take appropriate decisions. "It would restore credibility to the company, customer confidence and boost employee morale."
On being asked about the possibility of appointing more members in the Board of Directors, Gupta said, “A board can have minimum three members and we can appoint up to 10 members in the Board.”
Gupta said that more members to the board would be nominated only if needed.
The new Satyam chief would also be decided by the new Board.
CLB had disbanded Satyam Computer’s board and announced that a 10-member board of new directors would be nominated soon.
The minister briefed Prime Minister Manmohan Singh here Saturday to discuss the developments surrounding Satyam, including the names of those proposed to become board members of the Hyderabad-based company, officials said.
The government sacked all members of the Satyam board Friday. Officials said the prime minister wanted a credible management at its helm so as to instil the necessary confidence among various stakeholders.
Board to restore confidence
Asked about the priorities before the board, HDFC Chairman Deepak Parekh told reporters that restoring confidence was clearly the first priority before the board.
The newly appointed board members would be reaching Hyderabad tonight, when they would hold an informal meeting. This will be followed by a full board meeting tomorrow in Satyam premises on 9.30 am, Parekh said.
"I'm yet to talk to the other members," Parekh said. Karnik, former President of NASSCOM, also said that the three newly named board members would meet as soon as possible and that the first priority is the arrangement of an operational management.
"We are trying to ensure that India continues to be safe, secure and reliable destination for IT services," he said.
The government named three Board members with one each having legal, financial and IT expertise. While Karnik hails from the knowledge sector, Parekh has been in the banking sector and Achutan has had a stint with SEBI in the past.
Reactions
"This is not only a welcome step but also a speedy decision. The government must be congratulated for prompt action which was the need of the hour," said Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII).
"All three people named are leaders in their respective field - one knows the IT industry inside out, the second is an expert regulator and chartered accountant, and the third has phenomenal understanding of corporate governance," Banerjee told IANS, referring to Karnik, Achuthan and Parikh, respectively.
"I am sure the government will consider more such people," he added.
"We are confident that this will help to ensure business continuity, build confidence and protect the interests of all the stakeholders - the employees, customers and investors," said Som Mittal, president of Nasscom.
"By acting in this bold and coordinated manner, the government has sent the right signals to the global community and set an example of what governments can do to protect stakeholder interests while ensuring strict adherence to the rule of law."
Officials familiar with the developments said that the markets regulator would soon seek permission from the Sixth Additional Chief Metropolitan Magistrate D. Ramakrishna who has the Satyam brass under custody to record their statements.
Following their former chief Ramalinga Raju five other directors of Satyam had also put in their papers, leaving the strength of the board at just three.
Ramalinga Raju had resigned from his post earlier and admitted to falsification to the tune of 7,000 cr in the company's books.
"We will ensure that Satyam continues to function in the best interests of the company and its shareholders," Corporate Affairs Minister Premchand Gupta told reporters here, announcing the names of the new board members.
"We will ensure that Satyam continues to function in the best interests of the company and its shareholders," Corporate Affairs Minister Premchand Gupta told reporters here, announcing the names of the new board members."The new board will meet in next 24 hours," the minister said a day after the company's founder-chairman B. Ramalinga Raju and his brother Rama Raju surrendered before the authorities for financial fraud and were remanded to judicial custody till Jan 23.
"Having considered all aspects, the government has decided to reconstitute the Satyam board with experts in different fields," Gupta said. "Such a board will provide necessary vision and accountable leadership to the company in the hour of crisis."
Lazard not to seek berth
He, however, declined comment when asked if investors in Satyam like Lazard and Life Insurance Corp of India would also be given representation on the company's board eventually.
UK-based Lazard Asset Management, the largest shareholder of troubled IT firm Satyam Computer Services, however said it has not asked for berth in the restructured board of the company.
"Reports that Lazard Asset Management has sought a seat on the Satyam board of directors are incorrect," the fund house said in an emailed statement.
The statement, however, said, "On behalf of our investment clients, we have communicated to SEBI, the Ministry of Corporate Affairs of India and to the interim management of Satyam."
The communication requested that as a large shareholder, the asset management company would like to be informed on all matters being considered regarding Satyam, it said. The asset manager holds about 7.4 per cent stake the troubled IT-firm Satyam
Gupta said the reconstituted board will make its own assessment of the situation and take appropriate decisions. "It would restore credibility to the company, customer confidence and boost employee morale."
On being asked about the possibility of appointing more members in the Board of Directors, Gupta said, “A board can have minimum three members and we can appoint up to 10 members in the Board.”
Gupta said that more members to the board would be nominated only if needed.
The new Satyam chief would also be decided by the new Board.
CLB had disbanded Satyam Computer’s board and announced that a 10-member board of new directors would be nominated soon.
The minister briefed Prime Minister Manmohan Singh here Saturday to discuss the developments surrounding Satyam, including the names of those proposed to become board members of the Hyderabad-based company, officials said.
The government sacked all members of the Satyam board Friday. Officials said the prime minister wanted a credible management at its helm so as to instil the necessary confidence among various stakeholders.
Board to restore confidence
Asked about the priorities before the board, HDFC Chairman Deepak Parekh told reporters that restoring confidence was clearly the first priority before the board.
The newly appointed board members would be reaching Hyderabad tonight, when they would hold an informal meeting. This will be followed by a full board meeting tomorrow in Satyam premises on 9.30 am, Parekh said.
"I'm yet to talk to the other members," Parekh said. Karnik, former President of NASSCOM, also said that the three newly named board members would meet as soon as possible and that the first priority is the arrangement of an operational management.
"We are trying to ensure that India continues to be safe, secure and reliable destination for IT services," he said.
The government named three Board members with one each having legal, financial and IT expertise. While Karnik hails from the knowledge sector, Parekh has been in the banking sector and Achutan has had a stint with SEBI in the past.
Reactions
"This is not only a welcome step but also a speedy decision. The government must be congratulated for prompt action which was the need of the hour," said Chandrajit Banerjee, director general of the Confederation of Indian Industry (CII).
"All three people named are leaders in their respective field - one knows the IT industry inside out, the second is an expert regulator and chartered accountant, and the third has phenomenal understanding of corporate governance," Banerjee told IANS, referring to Karnik, Achuthan and Parikh, respectively.
"I am sure the government will consider more such people," he added.
"We are confident that this will help to ensure business continuity, build confidence and protect the interests of all the stakeholders - the employees, customers and investors," said Som Mittal, president of Nasscom.
"By acting in this bold and coordinated manner, the government has sent the right signals to the global community and set an example of what governments can do to protect stakeholder interests while ensuring strict adherence to the rule of law."
Officials familiar with the developments said that the markets regulator would soon seek permission from the Sixth Additional Chief Metropolitan Magistrate D. Ramakrishna who has the Satyam brass under custody to record their statements.
Following their former chief Ramalinga Raju five other directors of Satyam had also put in their papers, leaving the strength of the board at just three.
Ramalinga Raju had resigned from his post earlier and admitted to falsification to the tune of 7,000 cr in the company's books.
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