Corporate affairs minister P.C. Gupta in New Delhi on Sunday. (PTI)

Mumbai, Jan. 11: The new board at Satyam Computer Services has a tough task to perform when it hunkers down for its first meeting tomorrow.

The immediate task will be to induct new directors after carefully poring over the competing claims for board positions.

Lazard Asset Management — which claims to be the largest shareholder in the company with a stake of over 7 per cent — is lobbying hard for at least one board seat. It sent a letter to the ministry of corporate affairs staking its claim and has apparently been fobbed off.

Lazard had been building up its stake over the past few weeks after scooping up Ramalinga Raju’s pledged shares that the lenders were selling.

Other institutional investors, which have demanded board positions, include the Life Insurance Corporation, which has a 4 per cent stake, and ICICI Prudential.

The new board will then have to put in place a credible management team that will ensure continuity and yet not carry a stigma of association with the previous Raju regime.

There is a possibility that Ram Mynampati — the interim chief executive officer who was named to that position in Raju’s confessional letter to the board of directors last Tuesday — won’t be heading the team. But the other members on Mynampati’s team — all senior Satyam officials who haven’t been tarred by the scandal as yet — will probably stay on.

It will also have to announce the name of an auditor who will go over the books to determine when the fudge really began.

In his letter, Raju had said that he had been padding profits and overstating cash and bank balances for years. It is not clear how many quarters of financial results will need to be restated.

There could be one thumb rule here: Raju had said in his confessional statement that the cash and bank balances had been overstated by Rs 5,040 crore, with Rs 588 crore being padded in the second quarter ended September 30.

Assuming that the fudge has been incremental and built quarter by quarter, the auditors may have to restate figures for at least 10 to 11 quarters, which takes us back to the quarter ended March 31, 2006.

At this point, no one is relying too much on the authenticity of Raju’s figures because that is predicted on a shaky proposition: that the company was operating at a 3 per cent margin against the earlier postulated figure of 24 per cent. No one in the software industry believes that Satyam was operating on such a wafer-thin margin.

Satyam was due to come out with its third-quarter results later this month. That is unlikely to happen if the board decides to review and restate the financial results for the previous years.

Another major task will be to raise short-term working capital to keep operations going. Deepak Parekh’s connections will help in this regard. But long-term lenders will probably prefer to wait for a clearer picture about the state of affairs at the company before they release funds.