Satyam's latest updates - May Axe 10,000 Employees: Headhunters

[dhilipkumar]

Satyam woes to help rivals TCS, Wipro & Infy

MUMBAI: The billion dollar scam at Satyam Computers has led to a rally in stocks of IT bellwethers, on speculation Satyam's clients might turn to its competitors.

At 2:45 pm, the BSE IT Index was up 1.65 per cent at 2163 on Friday. Shares of Tata Consultancy Services rose 6 per cent to Rs 535.10, Infosys Technologies advanced 3.32 per cent to Rs 1227 and Wipro gained 1.92 per cent to Rs 249.35. Justifiably, Satyam Computers tumbled 45 per cent to Rs 21.95. "Satyam's crisis should benefit the big three. They will likely gain volumes as customers consolidate work with them," said an analyst with large broking house.

Satyam counts ArcelorMittal, the world's largest steelmaker, and Nissan Motor Co, Japan's third-biggest carmaker, among its customers. The Satyam stock will be removed from the NSE's benchmark Nifty and BSE Sensex starting Jan 12.

Aberdeen Asset Management, Satyam's largest institutional investor as of Sep. 30, sold 36.14 million shares, or about a 5.4 percent stake in the company. Fidelity Management & Research Co, Swiss Finance Corp. (Mauritius), and Morgan Stanley Mauritius Co have also sold shares of the ailing company.Recently, Citigroup froze bank accounts of Satyam, probably to protect the bank's $70 million in loans to the Indian software company.

With less cash in the books of accounts and indeterminate depth of the fraud, the new management will have a huge task to revive the company.

[dhilipkumar]

Satyam withholds salaries for two months; layoffs feared

HYDERABAD/NEW DELHI: Satyam Computer on Friday announced holding back employees salaries for two months, even as rumours were rife that the company might lay off close to 15,000 workers in the coming days.

The offices of Satyam Computer were rife today with the talks about forthcoming pink-slips at the company, which needs over Rs 500 crore every month just to meet its staff costs and has admitted that its cash position was not encouraging. Employees said they have received an e-mail saying the company would hold back salaries for two months and asked staffers to bear with it. However, the company spokesperson declined knowledge of any such e-mail and the issue would be looked into.

Even as the company spokesperson denied any layoff plans as of now, the rumours put the estimated job cuts at close to 15,000 by the end of this month.

Employees at the company said on condition of anonymity that they were hearing about imminent lay-off of people who were sitting on the bench or were close to completing their assigned projects. Besides, those being retained would be asked to take substantial salary cuts, they added. At the same time, global HT consultancy firm Hay Group's Practice Leader Mark Thompson said that employees would suffer the most from the fraud.

Global HR consultancy firm HayGroup's Practice Leader Mark Thompson said: "Based on past experience ... as with Enron, Worldcom and the Mirror Group, it is likely to be the employees who will suffer most from the fraud perpetrated by their bosses." In early 2000, the collapse of energy trader Enron had left thousands of people out of work, another 8,500 had lost their jobs at accounting firm Arthur Andersen; and Tyco eliminated 15,000 employees in February.

[Kalyan]

Others may curse Ramalinga Raju; his village blesses him

For the whole world B Ramalinga Raju may be a villain, after the startling revelation of fraud in the company he founded, but for
residents of his native village in West Godavari district, he is still a good samaritan.

The non-descript village, Garagaparru, shot into the limelight with Satyam Computer growing to become the fourth largest IT firm in the country.

The villagers hail the development works undertaken by the Byrraju Foundation, the charitable arm of Satyam, and consider Raju as a good man.

"He has done many development works in this region. We hope he will tide over the present crisis," Rama Raju, a villager said.

Several other villagers have expressed similar feelings. The Satyam issue is the hot topic in the village ever since Raju tendered his resignation as chairman of the company.

The Byrraju Foundation has taken up a number of development work in the fields of education, health, drinking water and several others in hundreds of villages in the coastal districts of West Godavari, East Godavari, Krishna, Visakhapatnam and others.

However, the developments in the company came as a shock to hundreds of shareholders in the West Godavari district.

"I have lost Rs 64,000. Many others in the town too lost large amounts," a shareholder in Eluru, who refused to be named, said.

source : economic times

[Kalyan]

West Bengal government ready to give Satyam more land

KOLKATA: West Bengal government will give 25 acres land to scam-tainted IT company Satyam Computers in the state if they want it, Information Technology (IT) Minister Debesh Das said here on Friday.

"If they want it, we will definitely give it. Why should we pull out? Let us see what happens to the company," Das told reporters on the sidelines of the launch of a new mobile handset by Kolkata-based Gee Pee Infotech Pvt Ltd.

Satyam already has 2.77 acres in the city and has asked for another 25 acres from the state government to set up an IT special economic zone (SEZ). The company is yet to utilise the land given earlier.

"Since the land (2.77 acre) has already been allotted to Satyam, they now own it. There is no question of taking back that land," Das said.

Satyam founder-chairman Ramalinga Raju had asked for the land when he came to Kolkata a few months back to attend the National Association of Software and Services Companies (NASSCOM) meet, the minister added.

The government has identified the land in Rajarhat, in the north eastern fringes of the city.

courtesy : economic times

[dhilipkumar]

Satyam CFO Srinivas Vadlamani attempts suicide: Sources

HYDERABAD: Srinivas Vadlamani, the chief financial officer of Satyam, who is also allegedly involved in the IT company's financial fraud, attempted suicide early this morning, say market sources. He is, however, safe, sources add.

Disgraced former Satyam chairman Ramalinga Raju in his letter of resignation to Securities and Exchange Board of India (Sebi) and the company's board of directors admitting fraud, had not absolved the CFO.

Vadlamani's name is the only significant one missing from Raju's list of those who were 'unaware of the real situation' and the IT company's wrong-doings. Interim CEO Ram Mynampati in a press conference on Thursday said that Vadlamani had put in his papers. The decision on his resignation is to be taken in board's meeting on January 10.

The CFO has been absconding from his home in downtown Malkajgiri for the last two days.

He is said to have attempted suicide in the house of some relative in Ameerpet area, sources said.

Confirmation from the police about the incident is still awaited.

[Kalyan]

Lawyer Bharat Kumar says his client Ramalinga Raju of Satyam will appear before SEBI at 1600 hrs tomorrow.

[sajiv]

Satyam Auditing based on evidence, says Price Waterhouse

MUMBAI: With all the fingers now pointing at Price Waterhouse, the statutory auditors of fraud-hit Satyam Computer Services put a brave front on Thursday, saying the auditing of the company's accounts was conducted with the support of audit evidence. "The audits were conducted by Price Waterhouse in accordance with applicable auditing standards and were supported by appropriate audit evidence," Price Waterhouse said in a statement. "Given our obligations for client confidentiality, it is not possible for us to comment upon the alleged irregularities. Price Waterhouse will fully meet its obligations to cooperate with the regulators and others," it said on Thursday.

The auditing firm has been under media glare and scrutiny of the Government and chartered accountants regulator ICAI since the revelations were made. ICAI has sought explanation from PwC, while promising action in case violations were found. Since 1991, PriceWaterhouseCoopers has been auditing the accounts of the fourth largest IT company. The auditing firm has over 100 clients in India including Bosch, HCL Technologies, Lanco Infratech, Maruti Suzuki, Sulzer India and Swaraj Mazda.

[sajiv]

Govt puts accounts of eight Satyam arms under scanner

New Delhi: Only a day after Satyam Computer chairman B Ramalinga Raju's admission that he had manipulated the company accounts, the Government today ordered for an inspection into eight of its subsidiaries and asked ICAI to vet the internal audit documents of the IT major.

"We have ordered an inspection into eight subsidiaries of Satyam under Section 209 (A) of the Companies Act. We have also asked the Financial Reporting Review Board of ICAI to obtain internal working documents and audit and submit it within three days," corporate affairs minister Prem Chand Gupta told reporters here.

The subsidiaries, whose accounts would be verified, are Maytas Properties, Maytas Infrastructure, Satyam BPO, Nipuna Services, Knowledge Dynamics, Nitor Global Solutions, CA Satyam ASP and Satyam Venture Engineering Services.

The ministry, Gupta said, was exploring different options with regard to actions that could be taken against the erring company, directors, auditors and other officials. "The government is keeping all options open. We are in close interaction with all other regulators and authorities to take coordinated action," said Gupta, who earlier met officials from ministries of finance, law, and IT, ICAI and Sebi representative. FRRB, an entity under ICAI, has been asked to submit report in three days to the institute.

[sajiv]

Satyam episode may affect FDI inflows

New York: The massive fraud at India's software services firm Satyam Computer faced brick bats in the foreign media with some saying that this episode could threaten investment from abroad in the country and is likely to cast a cloud over growth in its outsourcing sector. "The scandal threatened to gobble up not just Raju, who resigned, but his company. Far beyond Satyam, it raised fears that similar problems might lurk in other Indian companies, particularly in its vaunted outsourcing industry," American daily the New York Times said.

Quoting Mr Jacob Rees-Mogg, the lead manager with Somerset Capital Management, a fund that specialises in emerging markets, the NYT said: "The fraud will make people more nervous about investing in India and other developing markets".

[sajiv]

Govt disbands Satyam Board, to nominate Directors

In an unprecedented move, the Government on Friday disbanded the Satyam Board and declared it would nominate 10 Directors to run the affairs of the crises ridden IT company.

Corporate Affairs Minister told Zee News that the Company Law Board had authorised the Govt to restrain the present Board from holding any meeting.

He said the Govt will nominate 10 persons of repute to the Board. This new Board will meet in seven days, cancelling the scheduled meeting of the now disbanded Satyam Board that was to take place on Saturday.

"The government is restraining all current directors from the board. So Satyam cannot hold its Board of Directors meeting tomorrow (Saturday)," Gupta told a news channel.

Three remaining Directors, including two independent ones have been sacked.

[sajiv]

Satyam investors lose over 13,000 cr in a month 

Investors have lost a whopping Rs 13,600 crore (USD 2.82 billion) in Satyam shares
in less than a month, since the skeletons started tumbling out of the company's cupboards.

The market capitalisation of Satyam fell to Rs 1,607.04 crore today from Rs 15,262 crore at the end of trade on December 16, 2008, the day when Satyam announced an USD 1.6 billion acquisition deal of two firms promoted by the kin of IT firm's former chairman Ramalinga Raju. However, the company aborted the deal hours later after the investors dissent.

The meltdown in the scrip wiped off as much as Rs 13,655 crore in just 19 trading sessions.

The share price of Satyam plunged to Rs 23 today from over Rs 200 levels on December 16, when the fiasco began.

Investors received a rude shock on January 7, when Ramalinga Raju tendered his resignation and confessed to close to Rs 7,800 crore accounting fraud in the company. The stock had nosedived close to 80 per cent to Rs 39.95 after the starking revelations on that day.

The major erosion in the market cap was suffered in the past two trading sessions which wiped off Rs 10,460 crore with the scrip plunging as much as 86 per cent since January 7. Analysts believe the scrip is likely to stagnate at Rs 20 levels even as the Satyam counter was among the most traded on the bourses.

"The scrip is stagnating at Rs 20 levels. But we cannot fix the valuation of the company based on the current price movement. The scrip is more of news report driven and struggling to find some ground," SMC Global Vice President Rajesh Jain said.

Interestingly, Satyam shares had gained a combined 23 per cent in six consecutive trading sessions between December 26 and January 1, amid reports that the firm was ripe takeover target for rival IT firms and private equity investors.

The stock had also gained after the company announced that the board would consider a buyback of shares in its meeting scheduled for December 29. However, the company had postponed the board meeting to January 10.

[sajiv]

A tale of 2 Rajus haunts India Inc

A tale of two Rajus has surfaced to haunt India Inc and the stock markets, which tanked by seven per cent eroding shareholders wealth by Rs 2.5 lakh crore on Wednesday following a confessional statement by Satyam Chairman Ramalinga Raju that he had manipulated the accounts of the IT major.

One of the Rajus, Chairman of non-banking finance company Nagarjuna Finance, K S Raju, was arrested for defaulting on repayments of public deposits worth around Rs 100 crore.

More businessmen, including a renowned investment banker Nimesh Kampani, are likely to be arrested in the Nagarjuna case.

Mr Kampani was independent director on the board of Nagarjuna Finance about a decade ago. He was among the many senior functionaries of the company, who may be arrested.

The common factors between the companies — Nagarjuna and Satyam — are that both are run by Rajus, are based in Hyderabad and have created problems for the corporate world.

As the Satyam story unfolded, several independent directors, including Dean of the prestigious Indian School of Business, again based in Hyderbad, M Rammohan Rao, resigned. In wake of the problem, Mr Rao also quit the panel for selection of the Reserve Bank deputy governor.

[sajiv]

Govt disbands Satyam Board

New Delhi The government on Friday disbanded the current board of troubled IT company Satyam and would nominate 10 directors to the board.

"The current Board ceases to exist and there would not be any meeting tomorrow," Corporate Affairs Minister Prem Chand Gupta said.

"The Centre is considering appointment of suitable persons as directors of Satyam following interim permission by the Company Law Board," he said.

The new Board would meet in the next seven days. The current Board was left with only three members from the original nine.

Gupta said that the new Board would decide on the new management for Satyam Computer and there was no decision to take over the management as yet.

He also said that the IT firm's auditors PwC, if found guilty, would be banned in the country.

"The government has decided to approach the Company Law Board to ensure that the operations of the company continue uninterrupted," Gupta said, adding that the current board has failed in what it was supposed to do.

All the current board members were being removed and there would not be any meeting on Saturday, he added.

The government had approached the CLB, which has allowed it to restrain the current board members from functioning as the directors at the company.

On Wednesday, Sataym's founder and Chairman Ramalinga Raju resigned from the company after disclosing massive financial irregularities at the company, which emerged as the biggest corporate fraud in the country. On the same day, its CEO and MD Rama Raju also resigned, while the company's CFO also sent in his resignation on Thursday.

[Kalyan]

Govt takes charge of Satyam

The Satyam drama reached its climax on Friday evening with its promoters B Ramalinga Raju and B Rama Raju arrested by the
Satyam office Andhra Pradesh police and the Central government taking control at the tainted firm.

"We have arrested both Ramalinga Raju and Rama Raju based on a complaint registered by the criminal investigation department. We have initiated legal action and anyone who is guilty will be punished," said Andhra Pradesh DGP SS Yadav.

Ramalinga Raju, Satyam's disgraced chairman, along with former MD and his younger brother Rama Raju, was arrested late Friday night, two days after he confessed to perpetrating a Rs 7,000-crore financial fraud. The CID had registered a case against the Raju brothers based on his confessional letter to the Satyam board and SEBI. They have been booked for criminal breach of trust, cheating, criminal conspiracy and forgery under the Indian Penal Code.

Friday evening saw the corporate affairs ministry stepping in to salvage Satyam by replacing its existing board with 10 government-appointed directors. The move is aimed at preventing the existing board from taking any further decisions and to ensure the company continues its operations uninterrupted by an ongoing probe into the scam.


Corporate affairs minister Prem Chand Gupta told reporters late evening that the Company Law Board (CLB) has given an interim order to restrain Satyam's directors from acting in their board positions. "On the government's petition, CLB has also allowed the Central government to appoint 10 nominees to function as directors of the company," Mr Gupta told journalists. ET had first reported the government's plan to nominate directors on Satyam's board on January 8.

Late night meetings were on at the government level to finalise a new board for Satyam. Names doing the rounds include Nasscom's former president Kiran Karnik, SEBI's former chairman M Damodaran, MphasiS' former chief Jerry Rao and angel investor Saurabh Srivastava.

In view of the government's decision, the board meeting scheduled for Saturday will not take place. As per law, the new board will hold its first meeting within seven days, the minister added.

The government's decision came as it was concerned about the future of the company and its stakeholders, including employees. "We are determined to reach the truth (about the fraud) but are equally concerned with the fate of the employees and other stakeholders....It is the prime concern of the government to ensure that the operations of the company continue uninterrupted," Mr Gupta said. He also said the names of the government directors will be announced as soon as possible.

courtesy : economic times

[Kalyan]

The scrip continued to slide and ended 40% lower at Rs 23.85 on BSE on Satyam's board strength had been reduced to three from the original nine, as its directors quit after a controversial decision to acquire two property firms owned by Satyam promoters.

Corporate lawyers

told ET that the move would help to ensure that the investigation process does not affect the company's operations and ability to service its clients. A senior ministry official explained that allowing the existing board to continue would give them a chance to take decisions which may not be in the interest of the company, shareholders and other stakeholders.

"The new board of directors in Satyam can now suspend any key official, for example, a director or any other employee, who it feels could hamper the process of the inquiry and tamper with key documents," said law firm Luthra & Luthra's managing partner Rajiv Luthra.

Capital market regulator SEBI chairman CB Bhave described the Satyam episode as an aberration. "We need to assure investors that Satyam is a one-off phenomenon and accounting is not lax in all companies," he told reporters in Mumbai. SEBI office at Hyderabad has already seized documents of the company and the ministry of corporate affairs has sent a team of officers who are now inspecting Satyam's eight group companies, Mr Gupta said in Delhi.

Former Satyam independent director T R Prasad said that two days ago, Satyam's interim CEO Ram Mynampati had sent a mail on behalf of the remaining board members to SEBI, Central government, Confederation of Indian Industry, Nasscom, Andhra Pradesh government and CLB requesting them to form a new board. "However, we received no response except the dismissal today (Friday) in public. I am happy they are replacing the whole board as it will help restore credibility. Government has dutifully taken care of the issue," said Mr Prasad.

[Kalyan]

PwC Hyderabad staff asked to stay away from office

As the Satyam saga unfolded on television, the first to leave office weren't just Satyam employees, but employees of the company's
Staff audit firm Pricewaterhouse-Coopers (PwC) as well.

One PwC Hyderabad employee came to Bangalore on Friday and spoke to TOI on condition of anonymity: "Fearing that the employees might get caught for investigations or by the media, we were requested to not come to office. No timeframe was specified. While those who worked on the Satyam account were asked to stay in Hyderabad, the rest were told that they could leave town."

A special team from PwC Delhi has been asked to look into the matter under supervision from a team from the global headquarters in New York, which is likely to come down.

"Phones of most PwC Hyderabad employees have been switched off since friends and relatives have been hounding us with calls," he said. "Most of us are interacting with colleagues only through emails."

When contacted the PwC spokesperson denied any such thing. "Our office has been functioning normally with regular attendance. And no special team has gone from Delhi. We're all collectively looking into the matter," she said.

Everyone's favourite conspiracy theorythat Ramalinga Raju has diverted the funds for personal use, instead of inflating profits as he claimed - is being echoed at the PwC Hyderabad office too.

"Accounts may have been manipulated by showing land banks under litigation and exaggerating the BPO division's losses," said an official not part of the team handling Satyam.

courtesy : economic times

[Kalyan]

Raju may lose control of Maytas infra too

There is a question mark over whether the B Ramalinga Raju family can retain their grasp on Maytas Infra. It has now surfaced that a
Matro substantial portion of their shareholding in the company is under pledge with institutional lenders.

With the stock having dipped 61% since December 17, in all likelihood, the lenders have sought additional stock as margin from the Raju family and may have even sold some of the shares. In that case, the infrastructure company could slip away from the promoters' control just as Satyam.

At least 17.13% of Maytas Infra shares — around half of the promoter group's holding — has been pledged to raise Rs 125 crore, raising the prospect of a re-run of what happened with Satyam, when lenders sold shares pledged by SRSR Holdings, an investment arm of the Raju family.

Around 11.52% of Maytas shares have been pledged with IL&FS Trust Company to raise Rs 80 crore. The fund was raised by issuance of non-convertible debentures with shares serving as a security. A further 5.61% was pledged with Investsmart Financial Services for a short-term loan of Rs 45 crore, according to disclosures made to stock exchanges.


Maytas Infra is run by Teja Raju, the elder son of Satyam founder B Ramalinga Raju. The family patriarch on Wednesday admitted to fabricating accounts at Satyam in a fraud estimated at over Rs 7,000 crore.

The financial scandal at the IT services company began unfolding after a failed attempt last month by Satyam to acquire Maytas Infra and Maytas Properties, a real estate firm run by another of Mr Raju's sons.

Satyam's board had approved a proposal to spend $1.6 billion on the acquisitions — $1.3 billion for Maytas Properties and $300 million for Maytas Infra. According to the plan, Satyam was to have used its cash reserves — now revealed to be non-existent — to buy a 31% stake in Maytas Infra from the promoters, the Raju family, at Rs 475 per share. The stock fell by 5%, its maximum daily limit, to close at Rs 151.10 on BSE on Friday. Maytas Infra says the promoters — the Raju family and their investment arms — together owned a 36.64% stake in the company at the end of September.

courtesy : economic times

[Kalyan]

"Pledging of shares is a personal decision of an investor. The company is not privy to this information. To the best of our knowledge, the shareholding pattern has not changed," a Maytas Infra official said when contacted by ET.

It was not possible to ascertain which of the promoters pledged their shares.

Since December 16, when the ill-fated announcement of the acquisition
of the Maytas companies was made, HDFC Mutual Fund has reduced its holding in Maytas Infra to 3.6% from 5.66%.

Maytas Infra is the leader of a consortium, which has won a Rs 12,000-crore deal to build a metro rail network in Hyderabad, but that contract could be in jeopardy now.

E Sreedharan, the head of the Delhi Metro Rail Corporation, had in 2007 labelled the project "a future political scam," questioned its operational viability and objected to the way the government allowed the private consortium to commercially exploit 296 acres of prime land.

But the Andhra Pradesh government reacted by threatening to sue Mr Sreedharan for defamation. Now, as voices linking politicians and the Satyam scandal to connections with real estate grow louder, the government remains a silent spectator.

[Kalyan]

Headhunters on prowl for Satyam top teams

The next few months are expected to bring a mixed bag of opportunities for Satyam employees. While large IT firms are ready to
snap up the top team, Satyam's junior and mid-level employees may find the going tougher.

Though Satyam's senior leadership said today it is committed to the company, headhunters say they are determined to make offers that would be hard to refuse. Rival IT firms have begun using head hunters to track and approach senior Satyam executives. The top names on the poaching list includes Manish Mehta (Satyam's global head for SAP, engineering & spatial services), Subu D Subramanian (director of manufacturing, automotive and A&D businesses), T R Anand (head of telecom, technical infra-structure, media, and semiconductors), and Virender Aggarwal (director of Satyam's APAC, Middle East, India & Africa business), said a senior executive at a Banglore-based search firm, who did not wished to be named.

"We have been approached by a number of IT companies to get in touch with senior Satyam executives and work out mutually-beneficial offers," said the headhunter. The process could take between three and six months.

Apart from the top leadership team, IT firms want to hire those Satyam employees who can bring with them critical projects and reel in more business. "They would look at regional and divisional heads who are in direct touch with clients because their contacts are useful," the search firm executive added. Even employees in mid-to-senior management are also being tracked. "A few top IT companies have approached us to talk to employees at the level of senior vice presidents and vice presidents. They will be able to shift to new jobs more easily and faster than the top brass,'' said Kris Lakshmikanth, CEO of search firm Head Hunters India. The packages on offer could include pay hikes of up to 50%, he added.

Leading HR solutions firm Adecco CEO Sudhakar Balakrishnan feels those Satyam professionals with niche skills will get new jobs
with more ease. "A good IT professional will always be on demand. At a time when the IT job market is already quite slow, only those Satyam professionals with special skills will get a job," he said.

Though the skills and contacts of Satyam employees may be in demand, recruiters are likely to be more careful while hiring. The HR head of a Hyderabad-based mid-size IT company said it has received several resumes from Satyam but has adopted a wait-and-watch policy. "At this moment, we do not want to recruit anyone from Satyam till the situation becomes clear," he said, on conditions of anonymity.

Other headhunters believe that junior employees will be offered new jobs only after extensive reference checks. "It can be safely assumed that junior employees are not part of the scam. But still employers will be doubly sure before employing anyone from Satyam. Reference checks are going to become much more stringent for these people and employers will also assess their job profile in Satyam. But senior professionals are unlikely to get a job immediately," said P Dwarakanath, immediate past president of National HRD Network, an apex body of HR professionals in India. Agrees Madan Padaki, CEO of MeritTrac. "... for professionals at middle and senior level, employers will create additional checks to assess their professional ethics since they will be under suspicion."

courtesy : economic times

[Kalyan]

No salary Cuts for now - Satyam Latest News!!!

Satyam has "good revenue", so says its HR. In response to a flood of queries by employees worried about their January salary, the HR is sending a stoic response: "Company has good revenue and impressive client and long standing engagement".

It is possibly for such reasons that employees are now seeking a professional "external and credible" management. While they have been flooded with e-mails over the last two days from manage-ment to keep their morale high, they say that the presence of the old set of management is not able to restore their confidence in the firm and its future.

A news agency's report that the firm would be holding back two months' salary was dubbed as a rumour by a Satyam official saying that no such mail was sent out. No employee ToI spoke with confirmed they had received such mails.

[Kalyan]

Satyam's staff rolls fudged?

Satyam's 53,000 employees are also inflated like the company's cash reserves to siphon off funds in the name of non-existent associates, say analysts. "The figure of 52,865 associates could actually be a much smaller number, with the additional numbers used for "other purposes."

    Sources say that two years ago the company was aiming at a headcount of 80,000 by Q1 2009 and Raju's ambition to turn Satyam into a multicultural enterprise helped the firm fudge employee figures.

    "Setting up offices in nations such as China and Malaysia required the company to ensure 80% of the employees were local. There was probably some fudge happening there," said a former HR manager of Satyam.

    "Few years ago Satyam was planning to set up offices in various other nations such as Mexico, Sweden, Brazil and was hiring students from those countries. All these added to the headcount confusion." He said that data collection and updation weren't exactly a Satyam strength.

    A source said that while the company has development centres in various locations such as Malaysia, South Africa and Egypt, the headcounts there are not very clear, particularly in the case of interns.
    "The salaries for training of interns in centres such as Malaysia are paid by the local government there and not Satyam but they reflect in the company's payrolls."

    Pertinently, Satyam writes on each of its mailers that the figure of 52,865 was valid as on September 30, 2008.
    Apart from the massive lay off exercise conducted by the company in the last quarter of 2008 which would have shrunk the numbers by a few thousands, bankers say they have a serious doubt on the veracity of the initial claim itself.

    "This was one way of siphoning off the company money. But how do you prove it? These bank accounts would be there on the names of employees but the operators of these accounts could have been somebody else," says a senior banker. The company, bankers say, "lack co-ordination and centralisation of data". While the number of employees on the company's address book as on January 9 showed 47,570, a figure that has remained consistent for the last month, sources say that the figure does not take into account the number of people who were fired or had left the firm.

    "Hundreds leave but the data never seems to get updated," says a senior source. Whether the headcounts of Satyam's associate firms as well as acquired ones such as the Singapore headquartered Knowledge Dynamics (acquired by Satyam on July 21, 2005) are also added up to Satyam's database is also being figured now.

[Kalyan]

Raju to face Sebi team today

The speed with which the Securities and Exchange Board of India (SEBI) team that landed in Hyderabad to probe into the Satyam scam is moving is quite fast. The team headed by general manager A Sunil Kumar landed here on Thursday and visited the various offices of Satyam and inspect its books.

    On Friday morning amidst speculation, Sebi issued summons to Ramalinga Raju to appear the Investigating authority headed by Sunil Kumar at Satyam's office in My Home Gateway, Madhapur the same day at 4:00 PM. Raju's advocate S Bharat Kumar told the media at about 3:30 pm that Raju was summoned by the investigating authority under sections 11 (3) and 11 (C) of the SEBI Act 1992 (act 15 of 1992) and he would represent his client before Sebi investigating authority instead. " The time given is too little. Further he is a little unwell too," the lawyer told mediapersons.

    An hour later, Bharat Kumar came out of the Satyam office and informed that he sought a time of 24 hours for presenting Raju before the investigating authority and was granted the request. Now, Raju would appear before the investigating authority on Saturday at 4:00 PM at the same location. That's provided he is not arrested before tommorrow evening.

[Kalyan]

Satyam fraud: Will the auditors walk away?

Angry shareholders of Satyam may be miffed with the statutory auditors who have come in for sharp criticism following the dramatic
Audit revelations of accounting fraud in what is being billed as the country's Enron. But there is not much clarity on the kind of action shareholders can take against the auditors PricewaterhouseCoopers under the laws.

"The contract that the auditor has with the company is not a contract the shareholders or other stakeholders are privy to. Hence, under Indian law, it would be difficult for the shareholders to take any action against the auditors under the Law of Contract," according to Namrata Mehta, corporate lawyer, Economic Laws Practice, a law firm.

"It is a ticklish issue. Since the statutory auditors are appointed by shareholders , they are entitled to take legal action. But investors have to prove that they suffered huge losses," says V Murali , central council member, the Institute of Chartered Accountants of India (ICAI).

The shareholders must establish that they relied on the auditors and that they suffered actual losses. If these conditions are satisfied, the claim could well lie against auditors.

Though the books of accounts are prepared by the company and looked in detail by internal auditors appointed by the management, statutory auditors cannot absolve themselves of their responsibilities, Murali notes.

"Action in law has generally been taken either in contract or in tort," Namrata says. Tort is a wrongful act done willfully in circumstances involving strict liability for which a civil suit can be brought. To establish a claim in tort, shareholders have to satisfy the court that auditors owe a duty of care to shareholders and that there was a breach of such duty.

Even if the company takes action against the auditors under contract it would be limited by the terms of the contract. Many accountancy firms limit their liability usually to an extent of the fees they receive from the company, Namrata says.

"How the court will view the liability of the auditors of Satyam will depend upon the extent to which the court is convinced about a claim for negligence."

Meanwhile, ICAI has taken up the issue "suo motu" and has referred it to its financial reporting review board.
"We would look at the sampling techniques adopted by the auditors and as to why the normal checks by auditors did not bring out the facts," Murali says.

source : economic times

[Kalyan]

Raju still a gentleman for them

The tiny village of Khajipalem where the in-laws of Byrraju Ramalinga Raju of Satyam Computers stay, has decided to throw its weight behind Raju who is now in thick of controversy and is charged with having committed Rs 7000-crore fraud.

The villagers observed bandh in the village on Friday and showered praises on Raju as being a very magnanimous person and demanded that the government consider the various aspects of his services before taking any serious action against him. A local youth V R Raju felt that though most of the villagers who had invested in Satyam shares had lost huge money
following a nose dive in the share price in last three days, they were not finding fault with Ramalinga Raju. "On the other hand we have decided to stand by him in this hour of crisis" , he said. "We might have lost money, but we don't mind it as our man is in more trouble," said M a h a l a k s h m a m m a , whose family lost about Rs 30,000.

Shops in the village were closed down voluntarily on Friday to extend their solidarity to Ramalinga Raju.

The youth who were working at Gram-IT which was set up by Satyam computers, also defended their former boss saying that he might not have eaten the money from the company. They said that there was something fishy which the government agencies should bring out. "Why should be ruin the company which he built up brick by brick," they said.

Nearly 720 youth were working in four gram-IT centres in Khajipalem (Guntur), West Godavari, East Godavari and Ranga Reddy districts.

The youth trained in these centres get absorbed as data entry operators. So far about 60 such people have found jobs with a salary of Rs 3,000- Rs 4000. Though some of them fear that they might be sacked in the coming days, many feel that it was not a big thing as they have gained a lot in terms of knowledge .

source : economic times

[Kalyan]

Ramalinga Raju, brother to be produced in court

Disgraced former chairman of Satyam Computer B. Ramalinga Raju and his brother and former company managing director B. Rama Raju will be produced before a magistrate Saturday, a day after they were arrested by the Andhra Pradesh police.

The duo, arrested on charges of cheating and forgery, spent the night in the custody of the Crime Investigation Department (CID) at the state police headquarters.

A cardiologist from Care Hospital was called to examine Ramalinga Raju after midnight following a request from his lawyer S. Bharat Kumar, who claimed that the former Satyam chief was feeling chest pain.

V.S.K. Kaumudi, inspector general of police, CID, told reporters late Friday night that both the accused would be produced before the magistrate within 24 hours.

CID officials interrogated both Ramalinga Raju and his brother for over three hours to collect evidence. The CID would produce the same before the court while seeking their custody.

Legal experts said the accused were not likely to get bail at least for 14 days. Ramalinga Raju's counsel said a bail petition would be moved after they were produced in court.

Amid high drama, Ramalinga Raju and his brother, accompanied by their lawyer, drove to the police headquarters around 10 p.m. Friday to surrender but the CID officials arrested them to show that they were taking "tough action".

Director General of Police S.S.P. Yadav told IANS that the state police arrested Ramalinga Raju and Rama Raju on charges of "criminal breach of trust, criminal conspiracy, cheating, falsification of records and forgery".

According to legal experts, the Rajus, if convicted, could be sentenced to 10 years in jail.

A few minutes before the Rajus surrendered to the police, CID had booked a criminal case against them in the Rs.70 billion financial fraud in the company.

Police sources said the case was registered on a complaint by a Satyam shareholder Leela Mangat. The former bank employee complained that she held 200 shares in Satyam and lost heavily due to Ramalinga Raju's action.

Ever since Ramalinga Raju Wednesday quit as chairman while admitting massive fraud in the company, the police had been maintaining that they could arrest him only if somebody lodges a complaint.

Police officer Kaumudi said the arrest did not preclude investigations being carried out against the accused by registrar of companies and market regulator Securities and Exchange Board of India (SEBI).

SEBI Friday served summons on Ramalinga Raju and his lawyer had announced that he would appear before SEBI officials at 4 p.m. Saturday. Following the arrest, the SEBI team is now likely to question him in CID custody.

Ramalinga Raju's lawyer told reporters that SEBI would have to seek permission from the court to interrogate him.

The SEBI team has been conducting the probe into the fraud since Thursday. It checked the books of accounts at Satyam offices here.

Meanwhile, police sources said the CID might also arrest Vadlamani Srinivas, who resigned as Chief Financial Officer (CFO) Thursday. The whereabouts of Srinivas were not known.

Chief Minister Y.S. Rajasekhara Reddy had ordered a probe by CID Wednesday to "look at the criminal angle into the entire episode".

The CID stepped up investigations following criticism by opposition parties that the Congress government was soft towards Ramalinga Raju.

courtesy : economic times

[dwarakesh]

Satyam takes baby steps toward recovery

Two days after Ramailinga Raju, disgraced chairman of Satyam Computer Services dramatically revealed presiding over a Rs-8000 crore fraud, the company is still in the throes of fighting for its survival.

The top priority, apparently, is to arrange funds for paying salaries for the month, besides trying to hang on to existing business. A daunting task given the financial and legal soup Satyam is faced with. To apply brakes on the all round freefall Ram Mynampati has been appointed interim CEO, as suggested by Raju's in his letter admitting the fraud.

The fate of Valdamani Srinivas, the CFO or the financial custodian of the company, who sent in his resignation earlier, is to be decided by the truncated board on January 10.

Current assets

Raju's letter to the board revealed a marked deviation from the figures provided in the balance sheet as of September 30, 2008.

• Inflated cash and bank balances of Rs 5,040 crore ($1 billion) as against Rs 5361 crore ($1.1 billion) reflected in the books
• An accrued interest of Rs 376 crore ($77 million), which is non-existent
• An understated liability of Rs 1,230 crore ($253 million) on account of funds arranged by Raju
• An over stated debtors position of Rs 490 crore ($100.6 million) as against Rs 2651 crore ($544 million) reflected in the books

Taking into account the new figures, Satyam is reported to have a negative balance of Rs 2,131.21 ($444 million) as on September 30, 2008.

Shares fall drastically

Shares of Satyam further slid to Rs 6.30, a dip of as much as 85 per cent from its last close on the National Stock Exchange's Nifty.  The scrip, which had witnessed nearly 78 per cent fall in the previous trading session on January 7, touched an intra-day low of Rs 11.50 on the Bombay Stock Exchange's Sensex.

"At this point of time it is not clear as to whether the stock should be allowed to be traded in the exchanges, when there is no clarity about the financial of the company," stockbroker said.

The BSE and the NSE, denied any move to suspend trading of Satyam's shares as of now, even though the company has been unceremoniously removed from the Sensex and the Nifty from January 12. Meanwhile, the New York Stock Exchange (NYSE) suspended trading on Satyam American Depository Receipts (ADRs). In a statement it said: "NYSE Regulation is currently evaluating the news relating to Satyam and will closely monitor further developments. The security will remain halted until further notice".

PWC and Satyam

Since 2001, PriceWaterhouseCoopers (PWC) has been auditing the accounts of Satyam. PwC sought to clear the air, saying audits were supported by appropriate evidence. Offering to cooperate with the regulators and others, the global audit firm said in a statement: "Given our obligations for client confidentiality, it is not possible for us to comment upon the alleged irregularities...".

Institute of Chartered Accountants in Ireland (ICAI) has sought explanation from PwC, while promising action in case violations were found. PWC found itself in the line of fire for not being able to detect the fraud of such a great magnitude, which cannot easily be attributed to oversight.

Legal action

Mynampati said that neither he nor other board members were in the know of the gigantic fraud. How a man could singlehandedly commit a fraud of this magnitude, by deceiving his board members, banks and auditors is unbelievable. If true, this shows a huge lapse in the existing corporate governance.

The Department of Company Affairs and the Securities and Exchange Board of India (SEBI), the regulator, have already started probes. The minister of state for industry, Ashwani Kumar did not rule out "custodial interrogation" of Raju.

The whereabouts of the company's disgraced chairman is unknown while Raju's lawyer claims he is in Hyderabad and is willing to submit himself to the laws of the land.

What to look forward to

According to Satyam, about 40 top managers from across the world have pledged their commitment to the company. Satyam plans to find new investment banker and to expand the board, which now has only three members including Mynampati. Mynampati said that shareholders would be consulted on future decisions regarding merger or acquisition.

Mynampati said that a task force was being formulated to address all ongoing operational concerns and to maintain customer confidence. Besides, the company is also working on an immediate customer outreach programme. Satyam is considering an independent audit and will also assess its financial liquidity position.

The Andhra Pradesh chief minister Y S Rajasekhara Reddy has requested the prime minister to form a team consisting of heads of corporate houses to salvage Satyam. There is also pressure on the government to take over the company.

[Kalyan]

CLB asks Satyam not to implement board decision; continue work

The Company Law Board has asked Satyam's interim management for not implementing the decisions of the board, but has allowed it to Satyam office continue its business, a senior executive of the firm said here today.

"We are asked by the Company Law Board not to implement the decisions of the Board. But we are allowed to continue our activity. The team which was constituted recently is continuing its work," Satyam Computer Head Global Marketing and Communications Hari Thalapalli told PTI.

Thalapalli further added that business was going on normally at Satyam Computer though an element of uncertainty has crept into the company following the suspension of the Board.

"We are continuing our business as normal. However, there is a movement of uncertainty due to suspension of the board," he said.

Thalapalli said the executives are continuing their job as usual, including collection of receivables, he said.

The government had yesterday disbanded the Board of Satyam and cancelled its meeting scheduled for today.

Union Minister for Corporate Affairs Premchand Gupta said a ten-member board will be constituted by the government which will take up its work in about a week.

The members of disbanded board included the company's interim CEO Ram Mynampati, former Cabinet Secretary T R Prasad and an IIT Professor V S Raju.

courtesy : economic times

[nithyasubramanian]

HYDERABAD: The chairman of Satyam Computer Services was arrested on Friday on charges of cheating and forgery, and the government dissolved the outsourcer's board as authorities moved to limit fallout from India's biggest corporate scandal.
Chairman Ramalinga Raju, who resigned on Wednesday after revealing years of accounting fraud, was expected to appear before India's market regulator on Saturday.
In a late night development, Raju and his brother B. Rama Raju, Satyam co-founder and managing director, were arrested on charges of criminal breach of trust, criminal conspiracy, cheating, falsification of records and forgery, Reuters was told by S.S.P. Yadav, police chief of Andhra Pradesh, whose capital, Hyderabad, is home to Satyam.
Officials with India's Registrar of Companies searched Satyam's offices and seized papers and electronic documents, the company said late on Friday in a filing with the U.S. Securities and Exchange Commission.
Earlier, Corporate Affairs Minister Prem Chand Gupta said the government would appoint 10 new members to the Satyam board, which would meet within seven days. There was no move at this time to take over Satyam's management, he said.
"The government is considering appointment of suitable persons as directors of Satyam," Gupta told a news conference in New Delhi. "We are determined to reach the truth but are equally concerned with the fate of employees and other stakeholders."
A Satyam spokeswoman said the company welcomed the government's decision, which would restore the confidence of all employees, customers and shareholders. However, she said Satyam had no comment on the arrests.
In a bid to ease investors' concerns, the Securities and Exchange Board of India said auditors' certification of corporate results from the December quarter would be peer reviewed.
The government barred Satyam's board from holding its scheduled meeting on Saturday, called to consider options such as inviting a takeover or strategic investor and appointing an investment banker.
Analysts said Satyam's very existence was threatened by the scandal, which stand-in Chief Executive Ram Mynampati said has pushed the company into a crisis of unimaginable proportions.
Satyam shares slumped to 11.50 rupees (24 U.S. cents), their lowest since March 1998 and a far cry from a 2008 high of 544 rupees, before ending down 40 percent at 23.85 rupees ahead of the board's dissolution.
The company's market value has shriveled to $330 million, from more than $7 billion six months ago.
NONEXISTENT CASH
The chief financial officer offered to resign after Raju's admission that profit had been overstated for years and that about $1 billion, or 94 percent of the cash and bank balances on Satyam's books at end-September, did not exist.
"There's a big question mark over everything. We don't know what kind of business model they have now," said Amar Ambani, vice president of research at broker India Infoline.
"Raju's declaration says that at the operating level the margin was 3 percent, so at the net level it must have been a loss, which makes it extremely unviable. They have been borrowing to pay salaries, which means they have no cash at all," Ambani said.
The stock has fallen 87 percent in two trading days, pulling the broader market down. Shares in Satyam's main rivals, Infosys, Tata Consultancy Services and Wipro rose on expectations they would benefit from Satyam's circumstances.
Satyam will be cut from India's benchmark stock index, the Bombay Stock Exchange's 30-share Sensex from Monday.
Analysts said recent hopes that Satyam could survive by being taken over had been dashed, given the scope of the scandal and potential for big legal losses.
"The largest scandal in India's corporate history calls into question the viability of the company as an independent entity," consultancy Forrester said in a Jan. 8 research note.
"As a result, sourcing and IT executives need to actively review their exposure to the company and their options as a cloud of uncertainty hangs over the company.
"Both clients and employees will desert Satyam as a result of competitive wooing," it said.
Satyam specialises in business software and back-office services for clients including General Electric and Nestle.
National Australia Bank Ltd said it was reviewing a contract with Satyam for system development and support to 2011.

L&T SITTING PAT

The chairman of Larsen & Toubro, India's leading engineering and construction company, said the uncertainty around Satyam meant L&T had no plans to alter its near 4 percent stake in the outsourcer, which it built up in early January.
"When we invested, our idea was to strike some sort of go-to-market strategy, some sort of strategic alliance, if it was possible," A.M. Naik told CNBC TV18. He noted that Satyam's share price was about 188 rupees before Raju's resignation bombshell, far higher than when L&T bought it.
Naik did not rule out an alliance with Satyam once there was clarity on its losses and liabilities, including any from law suits. L&T runs a mid-sized outsourcing unit called L&T Infotech.
Several securities fraud class action lawsuits have been filed in the United States on behalf of investors who bought Satyam American Depository Receipts (ADRs) in the last five years.

[nithyasubramanian]

Satyam shows system stinks

The scale of the Satyam scandal is stupefying.
It had a supervisory board where the promoter- family were a minority; they had a tiny share of all equity. The independent directors were all highly regarded personalities. Its accounts were certified by the Indian arm of a globally top name in audit. It was subject to all sorts of independent regulators. Its senior executives were top-notch.
Yet, its founder-head admits Satyam's accounts have been falsified on an increasingly massive scale for years, showing thousands of crores of non-existent revenues and profits. That comes right after the World Bank blacklisted Satyam for data theft and bribery of the former's staffers.
Exactly what is the regulatory structure we have and what is it worth? Infosys' Nandan Nilekani's shocked observation was that it is clearly not enough to have rules. But we were supposed to have all sorts of independent and high-minded people enforcing the rules here. Was it all as much of a sham as Satyam's accounts? The auditors, for instance, don't seem to have even once physically checked the firm's cash balance in seven years. An audit committee of three independent directors is supposed to meet at least four times a year and monitor procedures here.
Where do the lies end? All sorts of probes have been promised now; they need to be both comprehensive and brisk, while being convincing. The questions are many, starting with what audit and regulation are supposed to be about and why we had such a mockery of both. Some developed countries insist on joint annual inspections of companies by at least two separate audit firms and a change of auditors every three years. There is the related question of whether professional bodies can ever satisfactorily regulate their members without outside scrutiny and involvement, as with the Institute of Chartered Accountants now; what sort of "due diligence" was on all these years by the various investors and partners in Satyam, let alone those who were to oversee stock listing norms? It is only three weeks since Satyam's blue-chip ones went along with a deal to use Rs 7,000 crore of shareholder money to buy shares of the promoter family in non-IT businesses, junked after an unprecedented retail revolt. We need clear measures to address each of these and other issues thrown up in the scandal, to ensure a system which works and honestly.

[nithyasubramanian]

HYDERABAD:  A day after corporate India was shocked by one of the worst frauds, serious questions are being raised over the claim made by Satyam founder Ramalinga Raju, that cash reserves reflected in the books over the years have never existed.
Information gathered from various sources, including mutual funds, shows that the company did have substantial cash reserves, if not Rs 5,000 crore (now termed non-existent), and that this money has gone out of Satyam. Where, is the question to which answers may be available only after the probe by various agencies is over.
Industry sources confirmed to The New Indian Express that a diversion of funds would have happened only in the last couple of years, which incidentally coincides with the rise of the two infrastructure companies held by the same promoters - Maytas Infrastructure and Maytas Properties.
It's in this two-year period that Maytas Properties acquired a large component of the land bank it now owns. Again, it was during this period that Maytas Infrastructure bagged major contracts from the Andhra Pradesh Government worth over Rs 15,000 crore, in the areas of major irrigation, highways, port development at Machilipatnam in Krishna district and Hyderabad's metro rail.
Maytas has some experience handling highway projects, but none in irrigation, port or rail projects.
If industry insiders are to be believed, Raju may have spent significant money "managing the system" to bag the contracts and to acquire land.
Significantly, Ram Mynampati, interim CEO of Satyam, is not willing to confirm Raju's statement.
He says the new management is verifying Raju's claim of non-existent cash reserves.

[sajiv]

Hyderabad hurting after Satyam scandal

Mumbai: In India's biggest corporate scandal in memory, the city of Hyderabad has achieved what it has long yearned for: clamorous media attention and recognition.

Once touted as a rival to Bangalore, for long the first choice of local and foreign software firms, Hyderabad never quite achieved the fame of a Bangalore or Mumbai despite its efforts.

For the 400-year old city, where crumbling mosques and minarets sit amicably by the side of gleaming malls and gated communities, Satyam Computer Services was a showpiece company with which the state lured other local and foreign firms.

Its former chairman Ramalinga Raju, who on Wednesday admitted to inflating profits for several years, was regarded as a true son of Andhra Pradesh, and called the "Narayana Murthy of Hyderabad", in a reference to the well-regarded founder of larger rival Infosys Technologies.

Now, the "pride of Andhra Pradesh has been hurt", local newspapers rued, its reputation damaged by "India's Enron".

"Hyderabadis are taking it very personally," said R. Prasad, a software engineer at a multinational firm in the city. "Everyone was very proud of Satyam and of Raju."

Raju was regarded as a close ally of former chief minister Chandrababu Naidu, who is credited with the vision of attracting investors and transforming Hyderabad into "Cyberabad" to rival Bangalore, considered the Silicon Valley of India.

Fiscal sops and a focus on improving infrastructure drew several global giants including Microsoft, Dell, Oracle, Amazon and Google to Hyderabad even as Bangalore, with its gridlocked roads and power outages, began to look increasingly unattractive.

Microsoft's sprawling facility, with its tennis courts and football tables, is its largest outside its Redmond headquarters.

Far From Over
First-time visitors to Hyderabad, famed for its lustrous pearls and flavourful biryani, are often pleasantly surprised by its charming gardens and modern airport, one of the first examples of a successful public-private partnership.

"Naidu marketed Andhra and Hyderabad very aggressively, and there was a huge investor interest," said V.K. Jairath, a consultant and former bureaucrat in Maharashtra state.

"It had the advantage of a talent pool for IT, and it was a smaller city whose growth could be properly planned," he said.

A significant number of professionals at India's top software firms Tata Consultancy Services, Infosys and Wipro, as well as at Microsoft and other global firms come from Andhra Pradesh.

In addition to its mission to create a software hub, Hyderabad had other grand plans: a film city to rival the one in Mumbai, home to Bollywood, and a business school to outclass the elite Indian Institutes of Management.

[nithyasubramanian]

With a big questions mark on its cash position and a minimum outgo on salary estimated at Rs 500 crore a month, Satyam may lay off over 10,000 employees next month, says a recruitment firm.

"It is most likely that Satyam will cut 10,000 jobs next month as the company is left with no cash to pay the salaries. The current fiasco is likely to put pressure on salaries, which may reduce by 10 per cent due to the surplus of about 20,000 people in the jobs market," Headhunters India CEO Kris Lakshmikanth said.

Satyam interim CEO Ram Mynampati while admitting that the cash position is not encouraging, the company, however, has taken care of salary for December. Lakshmikanth said till Tuesday evening there were about 7,800 people from Satyam who had posted their resumes on job sites and by Wednesday afternoon, it has gone up to 14,000.

The uncertainty about jobs is killingly painful for the 53,000 employees of Satyam, especially when the industry is going slow on recruitment. Further, possibility of a takeover too looks distant as the accounting fraud done by the company would make it difficult for any firm to evaluate its correct market value, which is compounding the worries of the employees.

IT-BPO union Unites Professionals general secretary Karthik Shekhar said, "In case of any lay off at Satyam, we may take legal action." "We have received over 7,000 hits since the news break.

On Wednesday, in one hour we have seen over 800 hits (no of people visiting the site) from Hyderabad. People have been enquiries on how the union can help them," Shekhar added.

[sajiv]

Over half-a-million have stake in Satyam survival: Kamath 

The big question on survival of Satyam Computer is giving anxious moments not only to its over 50,000 employees but also to over half-a-million people, who would get impacted indirectly if the IT firm does not come out of the trouble, CII President K V Kamath said on Saturday.

Kamath said each of over 50,000 Satyam employees supports a family of four. "Every white collar job creates four another jobs. (So) you are talking about anything between half-a- million to a million people, who could directly or indirectly have been impacted by this single event," Kamath said.

He said the crisis had such a social magnitude that made the government act swiftly and save the company.

Besides CII, Assocham and Ficci have also welcomed disbanding of the Satyam board of directors by the government.

They expressed hope that the move would help restore investor confidence not only in Satyam but in corporate India in general.

[sajiv]

New Satyam board to meet within 7 days

New Delhi: Company Affairs Minister Premchand Gupta on Saturday assured that all the actions will be taken against the culprits in the mega Satyam fraud of Rs 7,000 crore. He further said that the new board constituted by the government will meet within seven days to chart out next course of action.

"All actions will be taken by the government in a co-ordinate manner. We will not spare the guilty," Gupta assured while speaking to reporters here today.

The minister further informed that the new board constituted by the government will meet within seven days to plan further steps to be taken. He, however, cancelled the scheduled meeting of the now disbanded Satyam Board that was to take place today.

"It is up to the new board to steer the company through the crisis," he added.

The government had yesterday disbanded the Satyam Board and declared it would nominate 10 directors to run the affairs of the crisis-ridden IT company.

The Corporate Affairs Minister had yesterday told Zee News that the Company Law Board had authorised the government to restrain the present board from holding any meeting.

"The government is restraining all current directors from the board. So Satyam cannot hold its Board of Directors meeting on Saturday," Gupta told yesterday.

However, the minister did not respond to a media report that he is to brief the Prime Minister Manmohan Singh today on the Satyam scandal.

He also dismissed accusation that the Andhra Pradesh government has shown laxity in action against Satyam ex-chief.

"There was no delay by Andhra Pradesh police in taking action against Satyam founder Ramalinga Raju," he said.

Meanwhile, Home Minister P Chidambaram, Planning Commission Deputy Chairman Montek Singh Ahluwalia and top Finance Ministry officials are likely to meet Prime Minister Manmohan Singh today and brief him on developments at Satyam and the arrest of its founder Ramalinga Raju.

[nithyasubramanian]

NEW DELHI: Indian police detained the chief financial officer of embattled outsourcing giant Satyam Computers on Saturday, the third executive to enter police custody in the wake of a massive fraud scandal.
Vadlamani Srinivas was detained Saturday night for questioning in the southern city of Hyderabad, said S.S. Yadav, the top police official in Andhra Pradesh state, where Satyam is headquartered. He could be arrested later in the night, police officials said.
Satyam's founder and former chairman, B. Ramalinga Raju, was arrested Friday, two days after he confessed to filling the company's balance sheets with "fictitious" assets and "nonexistent" cash in a letter to the company's board.
His brother, former managing director B. Rama Raju, was also arrested Friday. They were both charged Saturday with criminal conspiracy, forgery, criminal breach of trust and falsifying documents, said senior police official S.K. Kumudi. They face up to life in prison, he said.
The Ministry of Corporate Affairs dissolved Satyam's board, including the company's interim head, late Friday night.
Minister for Corporate Affairs Prem Chand Gupta condemned "the greed and misdeeds of a few persons who were at the helm of affairs of the company."
"The current board of Satyam has failed to do what they were supposed to do," he said in an official statement.
The statement said the central government will appoint 10 people "to function as directors of the company," but no one had been named to the seats.
Satyam Computer Services Ltd. employs 53,000 people — among the 2 million Indians working in the country's booming high-tech industry, which last year brought in an estimated $40 billion. Satyam's clients include a slew of Fortune 500 companies including Nestle, General Electric and Ford Motors.

[nithyasubramanian]

BJP demands PM's assurance on Satyam

NEW DELHI: The Bharatiya Janata Party demanded that Prime Minister Manmohan Singh, who holds the finance portfolio, should come out with a statement to restore investor confidence after the disclosure of massive financial fraud at Satyam Computers.
"All the regulatory agencies and ministries had failed to check the fraud and the prime minister must make a statement to restore investor confidence," senior BJP leader Murli Manohar Joshi told reporters.
He said the centre should also set up a central regulatory agency to prevent such frauds in the future, and demanded an investigation into the role of the Securities and Exchange Board of India (SEBI), the ministry of corporate affairs (MCA), the income tax department, the stock exchanges and the registrar of companies in the scandal.
"It appears that all the agencies - whether regulatory, monitoring or assessing - have failed to discharge their responsibility, leading lakhs of small investors to lose their hard-earned money," Joshi said.
"Besides small investors, a public firm like Life Insurance Corporation of India has lost crores invested in Satyam and a number of banks also have an outstanding debt of over Rs.2.5 billion," he added.

[sajiv]

3rd Satyam exec detained after fraud scandal

NEW DELHI - Indian police arrested the chief financial officer of embattled outsourcing giant Satyam Computer Services Ltd. on Saturday, the third executive to be charged in a massive fraud scandal that threatens to roil India's flourishing tech industry.
The arrest of Vadlamani Srinivas came as authorities tried to contain the $1 billion fraud scandal by dissolving the company's board, including the interim head, and announcing plans to name 10 new replacements.

The scandal broke Wednesday when Satyam's founder and former chairman, B. Ramalinga Raju, confessed to filling the company's balance sheets with "fictitious" assets and "nonexistent" cash in an extraordinary letter to the company's board.

The company — which is now fighting for its life — could no longer conceal the $1 billion hole after a deal intended to save the struggling company was abandoned, Raju said in the letter.
He resigned from Satyam — Sanskrit for "truth" — that day, along with his brother, former managing director B. Rama Raju. The siblings have been arrested and were charged Saturday with criminal conspiracy, forgery, criminal breach of trust and falsifying documents, said senior police official V.S.K. Kumudi. They face up to life in prison, he said.

Srinivas, the third-ranking executive at Satyam, was arrested and charged with the same offenses Saturday night, Kumudi said.

Satyam, which is headquartered in the southern Andhra Pradesh state, employs 53,000 people — among the 2 million Indians working in the country's booming high-tech industry, which last year brought in an estimated $40 billion. The company's clients include a slew of Fortune 500 companies including Nestle, General Electric  and Ford Motors.

Corporate Affairs Minister Prem Chand Gupta dismissed Satyam's board late Friday night and in an official statement condemned "the greed and misdeeds of a few persons who were at the helm of affairs of the company."

The statement said the central government will appoint 10 people "to function as directors of the company," but no one had been named to the seats.

Although Satyam is a publicly traded company, the government is able to intervene in extraordinary circumstances to stabilize the company.

Gupta told reporters the new board would hold its first meeting in one week and will appoint a new management team.

Archana Uttapa, a Satyam spokeswoman, said the company did not know who would be named to the new board. A board meeting previously scheduled for Saturday was canceled, she said.
Uttapa said the "business side continues," with work scheduled to return to normal on Monday. She denied Indian media reports that the company was considering firing 10,000 employees.
While media have speculated about mass layoffs and whether the company can meet its payroll, Uttapa said employee salaries have been paid through December and cleared for January. She declined to comment further.

Gupta expressed concern that the scandal would bleed beyond Satyam's offices and into the rest of the outsourcing industry, which has been a catalyst of India's economic growth in recent years.
"The Satyam case is an aberration," he said. "The credibility of the Indian corporate sector in general, and IT sector in particular, should not be allowed to suffer because of this."

The president of the Confederation of Indian Industry said the Satyam scandal — already being called "India's Enron" — could have a ripple effect far beyond the company's employees.
K.V. Kamath said hundreds of thousands of workers outside Satyam could also be affected by the scandal, according to the Press Trust of India news agency, although he did not explain how.
A judge on Saturday ordered Raju and his brother to be held in judicial custody until Jan. 23 while the investigation continues, said Raju's lawyer, S. Bharat Kumar.

Police questioned the brothers throughout Friday night but Raju, who has diabetes and hypertension, saw a doctor at 3 a.m. for complaints of discomfort and chest pain, said Kumar.
Beginning Monday, the Bombay Stock Exchange will replace Satyam with Sun  Pharmaceuticals Ltd. on India's benchmark Sensex stock index.

The scandal comes at a delicate time for India's information technology companies, which are struggling against a global slowdown and waning economic growth at home. India's IT firms derive 40 percent of their global revenues from financial services clients.

Holders of the company's U.S.-listed shares — which have been halted from trading on the New York Stock Exchange while regulators investigate — have filed at least two class action suits against Satyam, the law firms representing the investors said in separate statements.

The suits filed by Vianale & Vianale LLP and Izard Noble  LLP allege Satyam and its top executives issued false and misleading financial statements and violated federal securities laws, said the statements on their Web sites.

Five more lawsuits were reportedly filed in the United States by Glancy Binkow and Goldberg LLP, Harwood Feffer LLP, Federman and Sherwood LLP, Finkelstein Thompson LLP, and Brodsky and Smith LLP, according to Mint, an Indian business newspaper.

[sajiv]

Ramalinga Raju, brother sent to jail 

HYDERABAD: The former chairman of Satyam Computer Services, B. Ramalinga Raju, and his brother and former Managing Director, Rama Raju, were remanded to judicial custody till January 23 in the Rs. 7,100 crore scam that rocked the company.



The Raju brothers were sent to the Chanchalguda Central Jail here after investigators of the Criminal Investigation Department (CID) of police produced them before the Sixth Additional Chief Metropolitan Magistrate, D. Ramakrishna. Since the court is on vacation for Sankranthi, the judge heard the case at his residence in the Judges Quarters at West Marredpally.

Counsel for the Rajus S. Bharat Kumar said he would move their bail application in the appropriate court on Monday. He said the judge ordered the jail doctor to monitor the health of Mr. Ramalinga Raju regularly as his blood pressure fluctuated abnormally. Despite his health condition, Mr. Ramalinga Raju did not seek the judge's permission to be shifted to a hospital, he added.

A doctor examined the former Satyam boss when he was in CID custody after he gave himself up at the office of the Director-General of Police (DGP) on Friday. He was interrogated by the CID sleuths during the night and again on Saturday. As a large media contingent kept a vigil outside the DGP's office throughout the day, the detenus were taken to the judge's residence in the evening.

Srinivas Vadlamani, who resigned as Chief Financial Officer of Satyam, was also arrested in the evening and taken to the CID office, according to Inspector-General V.S.K. Kaumudi. He is being viewed by the investigators as a co-conspirator with Mr. Ramalinga Raju. Teams from the Securities and Exchange Board of India (SEBI) and the Serious Frauds Investigation Office (SFIO), who have been here since two days, could not examine the ex-Satyam chairman as police asked them to take permission from the court.

Meanwhile, Andhra Pradesh Chief Minister Y.S. Rajasekhara Reddy explained to Prime Minister Manmohan Singh the developments in the wake of the arrest of the former Satyam chairman. During his brief telephonic conversation, the Chief Minister is understood to have said that the State government would have no objection if the case was handed over to the Central Bureau of Investigation and appealed to him to protect the jobs of 53,000 Satyam employees.

[Sudhakar]

As I have read all the informations today.

There will not be any Salary Cuts in Satyam's Future.

The HR Department, said they have Good Customer base and enough funds .

An News or Media company or a Job Portal company would have made this wrong comment just to get good scope and they were tried to utilize the situation for their business convertions. 

None of the Satyam reported that they have received any emails from the management about Salary Cuts.

* How Strange Our People in giving false statements. 

[sajiv]

Ramalinga Raju to get no special treatment

HYDERABAD: The disgraced ex-Chairman of the Satyam Computer services, B. Ramalinga Raju would be sharing the claustrophobic confines of the admission block in Chanchalguda Central Prison with 26 other persons remanded to judicial custody on Saturday.

Prison authorities said there were 'clear and strict' instructions that Mr. Raju should not be shown any preference and should be treated equal along with other remand prisoners. These orders come in the backdrop of the sudden shift of the prison superintendent Chandrasekhar just a day earlier.

Authorities say Mr. Chandrasekhar was given the marching orders on charges of showing a 'favour' to the other high-profile remand prisoners, K.S. Raju, chairman of the Nagarjuna Finance Limited (NFL) and P.K. Madhav, a former NFL director, who were shifted to Gandhi Hospital a fortnight ago on medical grounds. Senior authorities felt it was an 'improper' act and transferred him. Another officer Mr. Newton was posted in his place.

When Mr. Raju was produced before the Magistrate in the evening, his advocates sought proper Medicare in the jail claiming that he was suffering from acute Hepatitis-C infection and heavy fluctuations in his Blood Pressure. The magistrate had ordered that he be provided with proper Medicare in jail. Significantly, no plea was made to refer him to a hospital.

In the jail, Mr. Raju would be eligible for 650 grams of rice provided thrice a day along with 250 grams of vegetable curry and 125 grams of dal as per the jail manual. Tea would be served twice a day. He would be given a dhurrie, a blanket and a bed sheet. There would not be any television in the barrack and only one newspaper would be provided in the entire admission block.

On being admitted to the jail, he was asked whether he would require any medical examination, but a composed Mr. Raju declined the offer and had even informed the authorities that he was not hungry too indicating that he did not want supper.

[sajiv]

FBV suggests coop model for Satyam

VISAKHAPATNAM: The Forum for Better Visakha has suggested that Satyam Computer Services could be run as an employee-cooperative or a company whose equity is owned entirely by the employees.

In a statement issued on Saturday, FBV convener E.A.S. Sarma expressed support to talented workforce of the company who brought glory to the country the world over with their effort and professional inputs.

He said that the people of the State were anxious to see the company rehabilitated at the earliest so as to enable it reach newer heights in the IT industry.

He called upon the employees to view the unfortunate incidents as a transient aberration in the growth of Satyam and see an excellent opportunity in this to re-design the corporate structure of the company to make it an employee-owned and employee-managed company that can function with greater vigour and determination.

Mr. Sarma said that the new avatar of Satyam could be trendsetter for the rest of the industry not only in India but also around the world.

In that way, Satyam could generate more social capital than in its earlier corporate form.

[nithyasubramanian]

Govt may announce names of new directors of Satyam

The government is likely to announce the names of news board members of Satyam, sources said.

On Friday, the government had disbanded the board of Satyam Computer for "failing to do what they were supposed to".

Meanwhile, Satyam's fallen promoters Ramalinga Raju and his brother Rama Raju will spend the next two weeks in judicial custody at the high security Chanchalguda prison in Hyderabad. They have been remanded to judicial custody till January 23.

They were interrogated for 18 hours on Saturday and their bail pleas have been rejected. V Srinivas, the chief financial officer of Satyam was also arrested late Saturday night.

While Raju's counsel is expected to apply for bail on Monday, police will push for custody.

The CID has raided various associate companies of Satyam. The stock market watchdog SEBI has also filed a petition to interrogate Ramalinga Raju.

Meanwhile, the CID has formed teams to arrest the other directors of Satyam Computer and auditors of PricewaterhouseCoopers who have been listed as the accused in the case.

[Kalyan]

Big clients plan to exit Satyam

Major clients of Satyam Computer Services, such as General Electric (GE), Nestle and British Petroleum, have started exploring
Satyam office alternative options such as moving work to other outsourcing vendors

GE, the largest client for Satyam, is learnt to be evaluating options of inducting the Satyam team working on its IT project or convincing other IT vendors to merge this team with their resources to ensure continuity of work. A source familiar with the matter said talks are on with other outsourcing vendors. Satyam's bigger rival Tata Consultancy Services (TCS) already provides services to GE.

Replying to an e-mail questionnaire, a GE spokesman said the company has no comment to offer.

Nestle, the world's largest food company, has been a Satyam client since 2004. In 2007, it extended its engagement with the Indian IT firm for another three years, landing it a new multi-million dollar contract. The Switzerland-based company says Satyam has guaranteed it normal continuation of services and it also has robust internal resources to provide it necessary IT support. However, it is not resting assured. "Alternative solutions are being considered and no disruption of Nestlé's IT operations is expected," a Nestle spokesman said in an e-mail.

Outsourcing analysts say clients are worried about continuity of their work being handled at Satyam where employees are looking for another job. "Clients are evaluating options as their business continuity is at risk. Other suppliers are also working overtime to poach some of these marquee clients," sourcing advisory firm Everest principal Nikhil Rajpal said.

Satyam's clients such as British Petroleum have sought assurance from the Indian IT firm that their work will not be impacted. "We are seeking further information and assurance from Satyam that our services will not be impacted by the situation. We will also prudently consider what other actions may be needed in order to best safeguard our systems," BP group media director David Nicholas said in an e-mail.

While Indian vendors such as TCS, Infosys and Wipro could bag more work from Satyam's customers, analysts say multinational outsourcing firms such as IBM and Accenture could use the financial scam at the Indian firm to their advantage. "We don't rule out the possibility of MNC competition playing Satyam's fiasco as a selling point against the offshore Indian players," brokerage firm Emkay Global Financial Services said in a note.

courtesy : economic times

[Kalyan]

Satyam fraud could net politicians too

In September, when the forthright chairman of the Delhi Metro Rail Corporation (DMRC) warned that the Hyderabad metro rail project won
by a consortium led by Maytas Infra could be "a future political scam", a furious Andhra Pradesh government threatened to sue him for defamation. E Sreedharan had touched a raw nerve by suggesting that the proposed metro rail project was essentially a sideshow and real estate was the main thing.

Four months on, a Rs 7,000-crore financial scam has been exposed at Satyam Computer Services, and it threatens to engulf the politicians in the scam that Mr Sreedharan had warned about. On January 7, Satyam's founder B Ramalinga Raju claimed that the account books of the software company were manipulated for years to make it look much bigger than it actually was.

Mr Raju, whose son runs Maytas Infra, said sales, profit and cash balances were inflated and that he had pledged his shares to raise some Rs 1,230 crore and keep the company running.

But not too many people believe that Mr Raju, as he has admitted, is just a liar, and point to his claim about Satyam's operating margin of 3% between July and September 2008 as proof that there is more than meets the eye. "If one goes by Mr Raju's confession, Satyam's operating margins is 3%, which is way less than the industry average. While large IT companies have an operating margin of over 20%, mid-caps have about 13-14%.

Considering that Satyam has some large clients, it prompts us to believe that cash reserves existed with the company and that the promoters siphoned off the money," said Apurva Shah, head (research) at broking house Prabudhas Lilladher.

If the company actually had the cash and Mr Raju's version of what happened cannot be true, how did the money disappear from Satyam and where did it go? Those who should have a pretty clear idea by now are the software company's main bankers—ICICI Bank, Bank of Baroda, BNP Paribas, Citibank, HDFC Bank and HSBC. In the normal course, Satyam's statutory auditor PricewaterhouseCoopers would have demanded certificates from banks attesting to the existence of money in the IT firm's accounts. Did the banks indeed certify that they had the money? Or were certificates forged and presented to PricewaterhouseCoopers?

And what about the tax that has been deducted at source for the interest earned on the money said to be in deposit accounts? Were tax deduction certificates forged? The fact now is that Satyam has almost no cash in either its current or deposit accounts with banks.

Then, was the money diverted into companies connected possibly with the Raju family?

And were the deposits with banks used as security to enable loans for entities controlled by the Rajus? If so, was there a board resolution authorising such transactions? If cash was flowing out of Satyam's bank accounts, bank records can throw light on where it went.

"Money going out of Satyam's accounts could possibly have been shown as payments to vendors. Whatever may be our conjecture, a comparison of deposits and withdrawals by Satyam with various banks will definitely give a clear picture of what actually happened," said a Bangalore-based chartered accountant.

courtesy : economic times

[dwarakesh]

Satyamites' hopes rest on new directors

HYDERABAD: 'Ground Zero' will welcome the three-member team of Kiran Karnik, Deepak Parekh and C. Achyuthan when they meet at Satyam Infocity at 9.30 am on Monday.

The first and the foremost concern of this mission-critical team is to ensure that the 53,000 associates, who kept their fingers crossed, get their January salaries. An empty cash book, rudderless finance department and "boss less" IT behemoth are craving for a perfect bailout from the storm in which they were caught in.

Kiran Karnik, the former chairman of Nasscom, is viewed as the face of Indian IT industry. Battered by the turn of events, the confused folk of highly talented engineers of Satyam Computers are reposing confidence in him. A senior General Manager said that the three people appointed by the Government of India are of impeccable credentials and they would steer the troubled ship to safe shores.

FIFA to be assured

The three-member team will also look into the receivables from various customers and establish contacts with companies like Microsoft, Oracle and other major clients to secure clearance of the dues. The team will also send a reassuring message to the Federation of International Football Association (FIFA) about the competency of the company in executing the contract already awarded what with the availability of sharply focussed IT engineers. Meanwhile, the only available whole time Director on the disbanded board Ram Mynampati is said to have come under the radar of the State CID's team. Mr. Mynampati and the various heads of the verticals, who formed into the leadership team may also have to depose before the numerous agencies like the CID, the SEBI, the Company Law Board, the Serious Fraud Investigation Office and the Central Board of Direct Taxes.

The new set of Directors will also get in touch with people of high standing for their induction on to the Board to fill the remaining seven vacancies and choose a chairman as directed by the Centre. The Board might also look into the report submitted by Ernst and Young evaluating the value of the land bank of Maytas Properties Private Limited. The timing of the report of Ernst and Young would also be called to question.

Notices

Meanwhile, the Company Law Board slapped notices on all the existing and resigned independent Directors of the erstwhile Board of Satyam Computers. The police too might question them. Asked if the police plan to question them and also have Vinod Dham and Krishna G. Palepu, who are based outside India, be summoned for questioning, CID IG V.S.K. Kaumudi did not rule of the possibility and said- "We will cross the bridges when we reach there."

[dwarakesh]

Satyam fiasco affects techies in city

KOCHI: The shock waves generated by the Satyam fiasco have dashed the hopes of hundreds of B.Tech students in the city who have got placement offers from the Hyderabad-based company.

A preliminary estimate revealed that at least 300 youngsters from premier colleges and second-rung institutions in the city have been awaiting the final call from the company. They were part of the 6,500 fresh recruits across the country who received offer letters during campus recruitments from Satyam in 2008.

Cochin University of Science and Technology alone has nearly 60 students (July, 2008 pass-out) waiting to hear from the HR department on their joining dates.

Model Engineering College (MEC) at Thrikkakara was not behind, with almost the same number (around 60, June 2009 pass-out) expecting the call from the company headquarters in Hyderabad. An exact number of the hopefuls could not be ascertained, as the company had also given offer letters to candidates based on a test conducted by a private recruitment agency.

Confirming that many of his friends, who received placement offers from Satyam, had failed to receive proper intimation on the joining dates, N. Sadashiv of MEC said that the company authorities had asked the students to update their profiles but they could not give any assurance on the possible date of joining.

The news that broke on Thursday that Satyam may lay off over 10,000 employees next month has virtually sealed the dreams of the young techies. Mathew Koshy (name changed), a B.Tech mechanical student, who had received the job offer from Satyam, said that the company was left with no cash to pay the salaries, according to reports in the media.

Remya Nair (name changed), another student who got an entry-level offer at Satyam, said that she also came across reports that about 20,000 employees of Satyam had posted their resumes on job sites.

"How can we expect a call when the existing employees themselves are trying to get out of the company?" she asked.

Sidhharth V., a B.Tech computer science student, who had been waiting for the joining letter for the past six months, said that the company authorities had given them false hopes by saying that they would honour each and every offer letter issued.

Shankar Vasudev, a student of electrical and electronics branch, said that the meltdown has actually trimmed the number of campus placement offers. "Satyam was my only option. I had turned down offers from companies based in Kerala before accepting Satyam's offer ," he said.

Admitting that the campus recruitment scene in the State was worse, George Mathew, faculty-in-charge, Training and Placement Cell at the School of Engineering under the Cochin University of Science and Technology, said that companies had stretched the joining date by six to eight months for students who had passed out in July.

"Earlier, some of the companies had told students that they could join by the end of December. But going by the current situation, I do not think when these companies could take in the students," he said.

[Kalyan]

Govt announces three-man army to steer Satyam board

Days after sacking Satyam's tainted board, the Centre moved swiftly on Sunday to resurrect the company, appointing a three-member board to manage the company. The new board consists of HDFC chairman and the government's perennial trouble-shooter Deepak Parekh, former Nasscom chairman Kiran Karnik and former Sebi member C Achutan.

    The new board will meet on Monday at Hyderabad under the chairmanship of Deepak Parekh, who will be formally appointed to the post by the board members. The government has already sounded out the board members on Parekh's appointment. The board will later be expanded by the government in consultation with the chairman and other two newly appointed members.

    The government had sought permission from the Company Law Board to appoint 10 board members. But the final number may be restricted to five or seven members, according to a senior official.

    Only three members were appointed initially since that is the minimum number required for a board to meet. In order to ensure smooth functioning of the board, it was decided to first select a core team first and later expand it.

    The source said that as the board would also be involved in the dayto-day functioning of the company, it would meet frequently to take decisions. Having a large board could create logistical problems. Hence, the decision to keep the final size of the board at five-seven directors.

    The source said that some representation in the board could be given to institutional investors like Life Insurance Corporation. One nominee may also be appointed to represent lenders, who offer the company money to take care of working capital.

    Corporate affairs minister Prem Chand Gupta, who announced the appointment of the three board members on Sunday, said, "The board's first priority would clearly be to restore the company's credibility, customer confidence and employee morale, as also to safeguard the interest of investors and other stakeholders."

THE TRIO OF TROUBLESHOOTERS

Deepak Parekh

Highly respected banker and govt's favourite troubleshooter, Parekh is chairman of HDFC Ltd & HDFC Bank Chaired committee set up to bail out UTI in 2002 when it was on the verge of collapse, which could have had disastrous effect on India's financial sector Chairs several govt committees on real estate & economy-related issues A CA by training, will play key role in ensuring working capital for cash-strapped Satyam
The first priority of the new board will be to instill confidence among clients and investors

Kiran Karnik

Former chief of Nasscom and South Asia head of Discovery. Prior to that, worked for over 20 years in Isro. But questions raised over his being board member of EMRI, another Ramalinga Raju company

C Achutan

Legal expert Achuthan is a former head of the Securities Appellate Tribunal, which hears appeals against Sebi orders. He was also on the Sebi board

Salvaging Satyam

Govt may finally appoint 5-7 board members. One nominee may be from LIC, another from lenders who offer Satyam working capital
New board will assist probe and ensure guilty are punished: Achuthan

B Ramalinga Raju, his brother Rama Raju and Satyam CFO V Srinivasan sent to judicial custody till January 23 Strong rumour does rounds that a PwC staffer has been taken into custody by Andhra CID. Both Andhra cops and PwC deny report Andhra Pradesh CM YS Rajasekhara Reddy asks chief secy to probe all Maytas projects, says CBI welcome to probe Satyam fraud

[VelMurugan]

Satyam withholds pay for 2 months

Satyam Computer today announced holding back employees salaries for two months, even as rumours were rife that the company might layoff close to 15,000 workers in the coming days.

The offices of Satyam Computer were rife today with the talks about forthcoming pink-slips at the company, which needs over Rs 500 crore every month just to meet its staff costs and has admitted that its cash position was not encouraging.

Employees said they have received an e-mail saying the company would hold back salaries for two months and asked staffers to bear with it.

However, the company spokesperson declined knowledge of any such e-mail and the issue would be looked into.

Even as the company spokesperson denied any layoff plans as of now, the rumours put the estimated job cuts at close to 15,000 by the end of this month.

Employees at the company said on condition of anonymity that they were hearing about imminent lay-off of people who were sitting on the bench or were close to completing their assigned projects. Besides, those being retained would be asked to take substantial salary cuts, they added.

At the same time, global HT consultancy firm Hay Group's Practice Leader Mark Thompson said that employees would suffer the most from the fraud.

Global HR consultancy firm HayGroup's Practice Leader Mark Thompson said: "Based on past experience... as with Enron, Worldcom and the Mirror Group, it is likely to be the employees who will suffer most from the fraud perpetrated by their bosses."

In early 2000, the collapse of energy trader Enron had left thousands of people out of work, another 8,500 had lost their jobs at accounting firm Arthur Andersen; and Tyco eliminated 15,000 employees in February.

Source : IndiaTimes

[VelMurugan]

Satyam woes to help TCS, Infy, Wipro

The billion dollar scam at Satyam Computers has led to a rally in stocks of IT bellwethers on speculation that Satyam's clients might turn to its competitors.

At 2:45 pm, the BSE IT Index was up 1.65 per cent at 2163 on Friday.

Shares of Tata Consultancy Services rose 6 per cent to Rs 535.10, Infosys Technologies advanced 3.32 per cent to Rs 1227 and Wipro gained 1.92 per cent to Rs 249.35. Justifiably, Satyam Computers tumbled 45 per cent to Rs 21.95.

"Satyam's crisis should benefit the big three. They will likely gain volumes as customers consolidate work with them," said an analyst with large broking house.

Satyam counts ArcelorMittal, the world's largest steelmaker, and Nissan Motor Co, Japan's third-biggest carmaker, among its customers.

The Satyam stock will be removed from the NSE's benchmark Nifty and BSE Sensex starting Jan 12.

Aberdeen Asset Management, Satyam's largest institutional investor as of September 30, sold 36.14 million shares, or about a 5.4 per cent stake in the company. Fidelity Management & Research Co, Swiss Finance Corp. (Mauritius), and Morgan Stanley Mauritius Co have also sold shares of the ailing company.

Recently, Citigroup froze bank accounts of Satyam, probably to protect the bank's $70 million in loans to the Indian software company.

With less cash in the books of accounts and indeterminate depth of the fraud, the new management will have a huge task to revive the company.

Source : IndiaTimes

[dwarakesh]

Liquidity crunch: Satyam may shut many facilities

Even as the new Satyam board is set to meet for the first time on Monday, eyebrows are being raised in the real estate circles on whether the company would continue to operate so many facilities across Chennai and Hyderabad.

"The liquidity situation is very tight. In fact the interim CEO Ram Mynampati did admit to tight cash position in the company. The new board should find ways and means of lining up credit lines to ensure continuity of operations. In such a scenario, I do not foresee the company operating so many fragmented centres," a senior Satyam official confided.

The problems are many. But, the main focus of the new board is to have a new management team which will take care of day-to-day operations.

"First priority is to build confidence among the employees. They are the brand ambassadors of the company. Simultaneously, address client issues and assure them of continued high class delivery. These two will take care of the third section, which is the investor community," he said.

Clearly the shoe is beginning to bite. With so many centres across Chennai, Vishakapatnam and Hyderabad, there is bound to be rationalisation of operations, going forward.

The company may not have enough resources to pay lease rentals of most of these premises.

It is bound to seek time from the owners and even re-negotiate the terms of lease. In worst case, it might just log out of some of these centres.