The newly-constituted board of Satyam Computer Services Ltd, convened for the second time in six days in Hyderabad to discuss immediate action plans for the beleaguered company, announced on Saturday that it was looking for funds, for which it has opened a dialogue with lenders, to ensure salaries to employees and normal business operations, even as the search for a new CEO and CFO continued.
As a first step, the board has constituted an audit committee comprising board members TN Manoharan (as chairman) and C Achuthan, and LIC?s SB Mainak. The board has also appointed Brahmayya & Co, Chennai-based chartered accountants, as internal auditors of the company with immediate effect and Amarchand & Mangaldas and Suresh A Shroff & Co as legal advisors.
The board confirmed that the search for a CEO and CFO still continued and that till such time these appointments are concluded, the board would continue to meet on a weekly basis to address the ongoing issues.
Saturday?s meeting, first following the decision of the ministry of corporate affairs to nominate additional three new members to the board, had extended deliberations on matters relating to enhancing liquidity, leadership issues and customer concerns.
On Thursday, the Centre had named three more directors to the Satyam board, including CII chief mentor Tarun Das, even as it rejected a bailout package for the fraud-hit company. The other two directors were noted chartered accountant and former ICAI president TN Manoharan and Suryakant Balakrishnan, a nominee of the Life Insurance Corp of India, which is one of the largest investors in Satyam. HDFC chairman Deepak Parekh, former president of the software sector’s umbrella body Nasscom Kiran Karnik, former Sebi member C Achuthan were earlier appointed on the troubled IT giant?s board by the government.
The board, which is still awaiting appointment of chairman by the Centre (in line with the directions of the Company Law Board), has decided that each of the six members will take turns to chair meetings. Saturday?s meeting was chaired by Parekh. In fact, this has raised eyebrows as the government had earlier said the board would appoint a chairman. However, there were no clarifications on this issue.
Outlining the priorities, the company said in a statement after the meeting that ?addressing the issue of liquidity the board confirmed that it is engaged in discussions with banks and financial institutions.
?The last week had seen definite improvements on collection and this is expected to be a major priority for the business leaders and the board in the ensuing weeks. All efforts are being made to ensure that associates (employees) are paid their salaries on time.?
The board members reiterated that they were in touch with key customers and so far have not heard of deliveries being affected in any way. Scheduling of vendor payments was also discussed. The board also reaffirmed its confidence in its associates (employees) and their ability to continue delivering high quality work, as per the stated service level agreements.
The board members said they had been in conversation with customers, who in turn have expressed their continued support, which is a very encouraging sign.
Business leaders of the company made detailed presentations to the board and they have been requested to lead their respective operations seamlessly.
Action plan
•A three-member audit committee has been constituted comprising board members TN Manoharan and C Achuthan, and LIC?s SB Mainak
•Brahmayya & Co has been named internal auditors of the company while Amarchand & Mangaldas and Suresh A Shroff & Co are legal advisors
•Till a chairman is appointed by the Centre, the six board members have decided to take turns to chair the meetings, to be held weekly