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Our Bureau

Hyderabad, Dec. 29 A beleaguered Satyam Computer Services today suffered another major blow with three top independent directors quitting.

Mr Vinod K. Dham, Dr Krishna G. Palepu and Prof. Mendu Rammohan Rao resigned, under pressure from several quarters on corporate governance issues.

The resignations come on the heels of Dr Mangalam Srinivasan, the longest serving Independent Director quitting, owning moral responsibility for not casting a dissent vote against the $1.6-billion deal to buy Maytas firms.

Mr Vinod Dham, the father of Pentium chip, who had called for a special board meeting, had said that he would work with the management to enhance shareholder value. While Dr Palepu is a Harvard Business strategy Professor, Dr Rammohan Rao is the Dean of Indian School of Business.

Effectively, the nine-member Board is now reduced to five members – three whole-time directors (Mr B. Ramalinga Raju, Chairman; Mr B. Rama Raju, Managing Director; and Mr Ram Mynampati, President); and two independent directors (Mr V.S. Raju, former IIT Director, and Mr T.R. Prasad, former Union Cabinet Secretary).

Meanwhile, Mr G. Jayaraman, Satyam’s Global Head (Corporate Governance) and Company Secretary, told Business Line there would not be any quorum issues, following the resignations of the four members.

According to the Companies Act, the presence of at least three members or one-third of the board strength would do to carry on the board proceedings.

Mr Ramalinga Raju, Chairman of Satyam, had informed BSE that the promoter’s stake (8.65 per cent) might have been reduced as their lenders could have sold the shares pledged with them.

Repeated enquiries with top management to ascertain the effective shareholding (after the likely sale by the lenders) of promoters and the extent of the loans raised yielded no answers.

In all likelihood, the upcoming board meet on January 10 could result in a change of guard at the leadership.

While Mr Ramalinga Raju himself indicated that the Board would be recast, sources said at least two people in the top management have suggested to Mr Raju to step down.

They were reportedly perturbed by the developments in the last 12 days following the aborted bid to acquire the two Maytas firms.

Mr Raju reportedly convinced them that the management could survive the crisis and win back the investor confidence.

There was also considerable talk about possible suitors who could lead a change in the management.

The names of IBM, Reliance ADAG, an Indian IT major and private equity players focused on IT were being mentioned by people closely watching the developments.

FIIs which hold 47 per cent stake are likely to exert pressure to induct their own people on the board when it is revamped.

Meanwhile, the company is yet to send the answers to the queries posed by Registrar of Companies on the December 16 Board meeting. The deadline ends on Tuesday.

More Stories on : Software | Corporate Governance | Software | Satyam Computer Services Ltd

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