The new board had promised employees and investors on January 23 that a new CEO and CFO would be in place this week. But it could not come to a conclusion on the appointments.
The government-appointed board of the fraud-hit Satyam Computer Services did a too-little-too-late job on Tuesday, again indicating it may be hemmed in by what seems to be a turf war between the ministry of corporate affairs and the directors.
The new board had promised employees and investors on January 23 that a new CEO and CFO would be in place this week.
But it could not come to a conclusion on the appointments at a meeting on Tuesday in Hyderabad.
Senior company executives have been expressing inability to move forward in the absence of a full-time chief executive. “Suddenly, there is a lot of bureaucracy in the company. We fear it will be converted into a public sector undertaking at least in terms of decision-making,” a company source said.
Though there were no important decisions by the board on Tuesday, it waited three hours for the ministry’s clearance on its decisions before putting them out in the public domain.
The only employee-friendly announcement from the new board is an assurance on salaries for this month.
Salaries for January 2009 will be paid on scheduled and it will be achieved from its internal accruals and receivables.
The board also announced the appointment of Goldman Sachs and Mumbai-based Avendus Advisors as investment bankers to advise the company on the way forward and to explore strategic options.
The board approved Boston Consulting Group as management advisors to support the directors and the company’s leadership team. However, BCG will do the job free, deploying a three-member team at Satyam.
Though the board claims discussions relating to financing requirements were concluded, details are being closely guarded.
L&T is said to have tightened its grip on Satyam, but the board has not commented on any such moves. It said identifying strategic investors, obtaining expressions of interest and ensuring a fair, transparent approach to the process were being evaluated.
Though not naming L&T, the company statement quoted Manoharan, a special director on the board, as saying, “The reasons for the same are best explained by the purchaser (of shares). It should not be taken as an indication of support by the government-nominated board, for change of control of Satyam, at this stage. Appropriate, fair and transparent measures for enabling open bids will be devised by the company’s board in consultation with SEBI and the government of India, since adequate number of bidding interests have been evinced to the new board. It is important to keep in view that this is now a government-administered company, reporting to the Company Law Board and Ministry of Corporate Affairs.”
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