Unseen presence of Raju - Satyam chants 'don't know', ex-chief and brother still on board
Read more below
- Published 8.01.09
|BRAVERY OR BRAVADO? Satyam employees — palms coloured after making a handprint banner — shout slogans expressing solidarity with their company in Hyderabad on Thursday. (AFP)|
Hyderabad, Jan. 8: The haze continues to hang over Satyam Computer Services.
Satyam’s new management team headed by interim chief executive officer Ram Mynampati stonewalled a barrage of questions at a crowded media conference here today with a stock answer: “I don’t know.”
The frustrating reply left no one any wiser about the true state of affairs within the company.
There was also a nagging suspicion that the Rajus — who hold just 2.34 per cent of the stock after lenders sold some more pledged shares today — continued to hover on the sidelines, orchestrating the damage control exercise within the beleaguered company.
Mynampati and other team leaders failed to throw light on how much cash the company had on its books and why the company had failed to file a criminal complaint against Ramalinga Raju after he confessed to a Rs 7,136-crore financial fraud.
The new interim CEO said he had been propelled into the hot seat by the board which is due to meet on January 10 to induct new directors and decide who would clean up the company’s fudged books.
But the most startling indication was that the Rajus — Ramalinga and his brother Rama — still continued to be on the board and could attend the meeting on Saturday.
In filings with the bourses in India and the capital market regulator in the US, the company had said the Rajus would stay on until a new set of directors came on board. Theoretically, this means that they could attend the crucial board meet whose agenda hasn’t been clearly defined.
Mynampati said he wasn’t sure where Raju was. “We have had no contact with him since a conference call within half an hour of the email he sent us yesterday,” the new CEO said. “He could be in Hyderabad.”
“Raju is in Hyderabad and amenable to the process of law,” his lawyer S. Bharat Kumar said in a statement later in the day.
Chief financial officer Srinivas Vadlamani has resigned, though he is helping company officials set its books in order. “We have not accepted his resignation,” Mynampati said.
PricewaterhouseCoopers — the audit firm that had failed to detect irregularities in Satyam’s books — is being retained. Mynampati said PwC would prepare the third quarter results which are due later this month.
It wasn’t clear whether a mandatory forensic audit by another firm would be completed by then. PwC issued a statement in which it claimed that the Satyam audit was supported by appropriate evidence. Raju said he had been cooking the books for years.
The company has paid the December salaries and the first instalment of the US payroll. But its finances are precarious and the executives weren’t sure whether there was enough cash to pay salaries in January and clear vendor payments.
Mynampati said the company intended to appoint an investment banker to replace DSP Merrill Lynch which had terminated a contract to find a suitor for the company.
He also said the company was looking at a variety of options to raise cash and did not rule out some asset sales.
A fire sale of assets could be a tough option as the company had reported just over Rs 1,486.53 crore of fixed assets during the year ended March 31, 2008. This included computer and software assets valued at a little over Rs 1,000 crore and land and buildings of Rs 164.23 crore.
A five-member Sebi team landed in Hyderabad and started investigations at the software firm even as the Centre ordered the inspection of eight subsidiaries: Maytas Properties, Maytas Infrastructure, Satyam BPO, Nipuna Services, Knowledge Dynamics, Nitor Global Solutions, CA Satyam ASP and Satyam Venture Engineering Services.
But the police did not move in — maintaining there was no complaint — even as Andhra Pradesh chief minister Y.S. Rajasekhara Reddy put the onus of taking action on the Centre.
However, the state government has made out a case for a CBI inquiry into the sordid affair.