January 11, 2009, 6:34 PM — The Indian government appointed three members to the board of Satyam Computer Services on Sunday, promising that the new board will provide direction to the company which is reeling from a financial scandal.
The government, which was criticized for delaying action on Satyam, Friday dissolved the earlier board.
Local police in Hyderabad also arrested on Friday B. Ramalinga Raju, formerly chairman of Satyam, and his brother B Rama Raju who was the managing director. The company's chief financial officer, Vadlamani Srinivas was arrested Saturday.
Ramalinga Raju on Wednesday resigned as chairman from Satyam, after admitting to inflating the profits of the company.
The new board will have to appoint a new chief executive officer or confirm Ram Mynampati, interim CEO at Satyam, who was earlier a business unit head at the company.
The new board will also have develop a plan to raise funds for the company. At a press conference on Thursday, Mynampati cautioned that the company's balance sheet showed liquidity problems.
The new board consists of Deepak S. Parekh, the executive chairman of Housing Development Finance Corporation (HDFC); C. Achuthan, director at the country's National Stock Exchange, and former member of the Securities and Exchange Board of India; and Kiran Karnik, former president of National Association of Software and Service Companies (Nasscom), a trade association that promotes India's outsourcing industry.
The government said that the three-person board will meet on Monday. Further appointments to the board will be made subsequently as required, the country's corporate affairs minister Prem Chand Gupta told reporters on Sunday in Delhi. The government said on Friday it would nominate a total of 10 members to the board.
Nasscom welcomed the appointment of the new board saying that it would help to ensure business continuity, build confidence and protect the interests of employees, customers and investors.
