Satyam’s Raju to face market regulator Saturday (Roundup)January 9th, 2009 - 10:01 pm ICT by IANS
Hyderabad, Jan 9 (IANS) India’s market regulator Friday summoned B. Ramalinga Raju, disgraced founder of Satyam Computer, to appear before it Saturday as it began a probe into his Rs.70-billion (Rs.7,000-crore) accounting fraud, even as the Andhra Pradesh police began an enquiry. A board meeting slated for Saturday was cancelled Friday.
In Delhi, the Company Law Board issued an order to the existing directors of the board to appoint new directors within seven days.
The 54-year-old Raju will appear before a team of the Securities and Exchange Board of India at the Satyam corporate office at 4 p.m. Saturday, his lawyer S. Bharat Kumar said.
SEBI wanted Raju to depose Friday itself but the lawyer sought a day’s extension as the time was too short.
“The regulator has granted my client (Raju) 24 hours for deposing before its investigative team on our request. My client has been directed to appear for the hearing at Satyam corporate office at 4:00 p.m. Saturday,” Kumar told IANS here.
The lawyer met the SEBI team at the Satyam office Friday evening and informed it that Raju was not keeping well and the time given for deposition Friday was too short.
“I requested the regulator in writing for one-day extension, as the summons were served today (Friday) at 2:30 p.m. for the hearing at 4:00 pm. As the summons were given at a short-notice, it was difficult for my client to rush for the hearing as he has also not been keeping well,” Kumar said.
In the absence of Raju or his family at his residence in the upmarket Jubilee Hills neighbourhood, the summons were handed over to the security officer on behalf of the regulator.
The Satyam board had nine members - Raju, his brother B. Rama Raju, wholetime member Ram Mynampati and six independent directors. Four of the independent directors quit the board in the wake of aborted bid by Raju Dec 16 to make Satyam buy two firms, Maytas Properties and Maytas Infra, run by Raju’s two sons.
With the resignation of Mangalam Srinivasan, Krishna Palepu, Vinod Dham (all three based in the US) and M. Rammohan Rao, the board now is left with Mynampati, T.R. Prasad, former cabinet secretary to the Indian government, and V.S. Raju.
The day began with speculation that Ramalinga Raju might be arrested though the Andhra Pradesh police had said Thursday that they cannot do so merely on the basis of his confession that he had rigged figures to inflate the company’s profits.
There were also an unconfirmed report that Satyam’s chief financial officer Srinivas Vadlamani had attempted suicide, but the company denied it. Vadlamani’s name does not figure among the people Raju has mentioned in his resignation letter absolving them of any wrongdoing.
Vadlamani Thursday sent his resignation to the interim chief executive Mynampati, who said the resignation has not been accepted.
There were also reports circulating that the interim team has also sent a mail to the employees saying they would not be paid salary for two months. Mynampati told a press conference Thursday that the December salary is being paid and the company has funds to meet salary commitments for January.
Mynampati said the interim management was scouting for a strategic investor as the company was facing severe funds crunch. He said the option of outright sale of the company was not ruled out.
He also said about 100 clients who contribute 80 percent of the $2 billion revenue had assured they would stay with the company.
The Satyam scrip was further mauled in Friday’s trading. At one point it was quoted at around Rs.6.
While the New York Stock Exchange had stopped trading in the scrip Wednesday, the day Raju stunned his investors, employees, clients and the people in general by his admission of the massive fraud, the Bombay Stock Exchange (BSE) had taken it out of its key 30-scrip index, the Sensex.