Satyam board to meet on January 17: Deepak Parekh

January 15th, 2009 - 6:53 pm ICT by ANI  

KPMG

New Delhi, Jan.15 (ANI): A member of the Board of Directors of Satyam Computer Services today said that the board of the Hyderabad-based firm would meet on January 17 to take stock of the situation arising out of Rs.7000 crore scam perpetrated by the previous board.
Board member Deepak Parekh told reporters here after a meeting with Corporate Affairs Minister Prem Chand Gupta that at present the company had receivables of Rs.1, 700 crore.
“Until we know the real position, how can we speak of bailout… the company has receivables of Rs.1, 700 crore,” Parekh said.
He also said that KPMG and Deloitte, the firms new auditors, have begun their work.
Parekh, the chairman of HDFC Ltd, was named along with former Nasscom president Kiran Karnik and Securities Appellate Tribunal’’s past presiding officer C Achuthan as members of the Satyam board last week.
Earlier in the day, Gupta said the fraud-hit Satyam Computer Services has not sought any financial help from the government as the new board is working on reviving the company.
Talking to reporters after a meeting of the Cabinet Committee on Economic Affairs here, Gupta said all clients of Satyam are AAA rated and have sufficient receivables.
“The company has not asked for any package or anything so far. They are on the job. The board has taken over only a few days ago. The board comprises of people of eminence so why are you so impatient about the finance of the company? The company may not need that. They have sufficient receivables. Now, it is for the new board to take a view,” said Gupta.
He also added that if the company required funds, it would raise them from the banks.
Shares of Satyam tumbled as much as 30 per cent on Thursday after one of its newly appointed directors dashed investor hopes for any government bailout.
Earlier, the Government ruled out any bailout package for Satyam Computer Services Ltd, but assured to do everything within the framework of its responsibilities to save the company’’s employees.
Minister of State for Industry Ashwini Kumar told the reporters here on the sidelines of a Petro-Tech 2009 Conference that the Government is not in favour of a bailout package for Satyam as such, and added that the new board of directors is the ones entitled to take such decisions.
His statement contrasted with Union and Commerce Industry Minister Kamal Nath”’’s assurance on January 13 to get a revival package for the injured company to keep it afloat amidst severe financial crisis.
According to analyst firm IDC, HCL and Tata Consultancy Services are the frontrunners to acquire Satyam, but second-tier multinationals such as Fujitsu, Atos Origin and Cap Gemini could also be in the running.
According to The Times, IDC forecasts acquisition as the most likely outcome for Satyam.
In its report it said the key unanswered question in the corporate fraud is the role that Satyams auditor PricewaterhouseCoopers played.
IDC believes that rival firms will be knocking on the door to scoop up Satyams customers and said there was already an opportunity for this as part of Telstras review of its application management arrangements with Satyam.
In a table in the report, IDC valued Telstras application management contract with Satyam at 32 million dollars, but said this expired in January 2008.
Other Satyam contracts with Australian customers listed by IDC include two custom application development (CAD) contracts with Qantas. One for 80 million dollars over five years, expiring in September 2011, and another for 55 million dollars over seven years, expiring in 2013.
It has a 12 million dollar deal to provide CAD services to Suncorp over three years, which expires in July 2010. It also has a three-year, 20 million dollar application management contract with an unnamed Australian transport company, expiring in July 2010.
The government has ordered the Serious Fraud Investigation Office (SFIO) to probe the Satyam Computer Services scandal.
The SIFO is expected to submit its report in three months.
The probe has been ordered after receiving a report from the Registrar of Companies (RoC) in Hyderabad, which inspected the books of accounts of Satyam Computer Services and eight other companies belonging to the kin of the former chairman B Ramalinga Raju. (ANI)

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