Satyam board meets again, still no plan

Satyam's board meets again Saturday inconclusively

The newly reconstituted board of financially troubled Indian outsourcer Satyam Computer Services met for the second time on Saturday, and the company's future remains unclear.

The Indian government this week nominated three new members to the board, taking the total to six. It also ruled out any immediate plans for financial assistance to Satyam, which could be facing a liquidity crunch.

The board last met on Monday.

Satyam was plunged into a crisis earlier this month when the company's former chairman B. Ramalinga Raju resigned, after admitting that the company had inflated profits for several years.

Satyam's board has said that the company's liquidity position looks good, although a final determination would require a restatement of its finances. That task was assigned on Wednesday to accounting firms KPMG and Deloitte Touche Tohmatsu.

The board, which met in Hyderabad, said in a statement on Saturday that it is engaged in discussions with banks and financial institutions. The last week had seen definite improvements on collections, and this is expected to be a major priority for the board in the ensuing weeks, it added.

All efforts are being made to ensure that Satyam's employees are paid their salaries on time, the board said.

The board is still searching for a new chief executive and new financial officer. It did not confirm as interim CEO Ram Mynampati, a former Satyam business unit head. The board said it was interested in bringing in "fresh blood" for the CEO role.

Until a new CEO and CFO are appointed, the board will meet weekly to address ongoing issues, it said.

The board members have been in contact with customers, who in turn have expressed their continued support. The board also has not heard of deliveries to customers being affected in any way, it added.

Some analyst firms have warned that continued uncertainty at Satyam could lead customers to look to alternative suppliers in India.

Also on Saturday, a court remanded Raju, his brother and former managing director of Satyam, B. Rama Raju and the former CFO Vadlamani Srinivas to police custody for four days. They were earlier in judicial custody.

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