CLB allows govt to recall four nominees from Satyam board

After over six months of presiding over the operations of fraud-hit Satyam Computer Services (now Mahindra Satyam) and successfully leading the company out of the crisis, the company law board (CLB) on Friday allowed the government to recall four of its nominee directors on the board of the company. However, as per the CLB order, two government nominees will continue on the board for a period of three years ?to ensure that the bid conditions and conditions imposed by the CLB are complied with in letter

and spirit?.

Out of the six government-appointed members on the board of Satyam in January this year,?C Achuthan, former chairman of Securities Appellate Tribunal, and TN Manoharan, former president of Institute of Chartered Accountants of India,?will continue post the CLB order. Meanwhile, former Nasscom president Kiran Karnik, HDFC chairman Deepak Parekh, CII?s chief mentor Tarun Das?and Suryakant Balkrishna Mainak will

opt out.?

?The principal bench of the Company Law Board, allowing the application of the Central government in this regard, passed the order which it had reserved on the date of hearing on July 2, and said that the remaining directors will continue till such time the Central government desires to continue them. However, it will not be beyond a period of three years,? said the statement from the ministry of corporate affairs.

The statement added that the two members ?shall not be included in counting the maximum number of directors that the company can have as per its articles?.??Satyam?s board at present constitutes six government nominees and four directors from Tech Mahindra, which holds 31% stake in

the company.

Kiran Karnik, chairman on the board of Satyam, told FE, ?The investigations in the fraud are still on and the matter is still before the CLB. This is the reason why two members have been retained on the board?. He added that the CLB would want to be kept informed of the activities of the company at

the board level.

According to the CLB order, as long as the two directors remain on the board, any decision regarding the share purchase agreement could be taken only in the presence of at least one of them. It adds that the presence of one of these two directors is also necessary for any decision to be taken in accordance with the conditions imposed as per the bid documents for taking over Satyam.