Satyam appointing new accounting firm to restate accounts

The government-appointed board at financially troubled Indian outsource Satyam Computer Services has decided to appoint an accounting firm in the next 48 hours to restate the company's accounts.

The three-member board, which was appointed Sunday, did not however discuss at a press conference on Monday any specific plans to raise working capital, which it acknowledged is a key issue for the company.

Until the accounts are restated and authenticated, neither banks nor the board know the real figures, said Deepak S. Parekh, executive chairman of the Housing Development Finance Corporation (HDFC), a home loan company in India, and a member of the board.

The new board had its first meeting on Monday in Hyderabad, where Satyam has its headquarters.

The working capital crisis may not be acute, as the company has large receivables due and minimal debt, Parekh said. However the company can plan various strategies only if it is sure the figures for the receivables and debt are correct, he added.

Saving Satyam, whose former chairman, B. Ramalinga Raju, resigned after admitting to inflating company profits for several years, may prove to be what Parekh described as a " medium-term process." The board is not ruling out mergering Satyam with another company.

The board did not confirm Ram Mynampati, interim CEO at Satyam, who was previously head of a company's business unit. The board is interested in bringing in "fresh blood" for the CEO and CFO (chief financial officer) positions, and that will take some time, Parekh said.

The government is also being expanding the company's board. After the expansion is complete, a chairman of the board will be selected, Parekh said. The board is to meet frequently to size up the rapidly evolving situation, he added. The government said Friday it would have up to 10 of its nominees on the board.

"We are still at the stage of understanding, absorbing," said Kiran Karnik, another member of the board, who was formerly president of the National Association of Software and Service Companies.

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