The Hindu Business Line : Satyam has time till June 27 to fill up board vacancies

Hyderabad, Dec. 31 Satyam Computer Services appeared to be gearing up to face some daunting challenges that confront it at the turn of the year, even while trying to wriggle out of the ‘messy’ deal with the Maytas duo.

Winning the confidence of investors and shareholders, taking on the Upaid case on intellectual property in the US, filling up the vacancies on the board which has failed to meet requirements of both Indian and US Exchanges are the major tasks ahead of the over $2-billion software major.

In an interesting development, Satyam has admitted that it is not in compliance with Indian stock exchanges with regard to the number of independent directors, following the exodus of the four independent directors from its nine-member Board. The exchanges in India require at least 50 per cent of the directors on the company board to be independent.

Following the resignation of the four independent directors (Dr Mangalam Srinivsan, Prof. Mendu Rammohan Rao, Dr Krishna G Palepu and Mr Vinod K Dham), only two independent directors (Mr V. S..Raju and Mr T. R. Prasad) remain on the Board.

“However, rules allow us to comply with the requirement by June 27,” Mr G. Jayaraman, Global Head of Satyam’s Corporate Governance and Company Secretary, said.

Informing the New York Stock Exchange, he said that the company would fill up the vacancies as soon as possible.

Satyam faces a similar situation in the Audit and Compensation Committee’s as well. The Board is scheduled to meet on January 10 to sort out the issues.

Meanwhile, a Satyam spokesperson said the company would reply this week-end to the notices served on it in the case filed by the online payment services company, Upaid, in a Texas district court.

Upaid had earlier moved the court against Satyam claiming damages to the tune of $1 billion.

After the failed Satyam-Maytas deal, Upaid had approached the court again, seeking the deposition of Mr Ramalinga Raju (Chairman), Mr Vadlamani Srinivas (Chief Financial Officer) and Mr Jayaraman. The case is posted for a mid-January hearing.

Reacting sharply to the reports that top IT players might take over the company, the executive said that there was no truth. “It is nothing but speculation,” she said.

On the question of reserves to the tune of Rs 8,500 crore with the company, there was no response.

MD’s letter

A day after Mr Ramalinga Raju shot off a letter to the staff, his brother and Managing Director, Mr Rama Raju, followed suit listing the company’s achievements during the year.

“Let us not allow the past two weeks to cloud an entire calendar year of successes which included crossing the $2-billion turnover mark and listing on NYSE’s Euronext platform,” he wrote on the New Year eve to the staff.

Customer Response

The company has started getting feedback from large customers, reposing their faith in Satyam and its business, according to Mr Hari Thalapali, the Head of Marketing and Communications.

The company was also working on follow-up measures regarding the row with the World Bank. It believes that the news was consciously released coinciding with the failed Satyam-Maytas deal. The technicalities are being looked into, he added.

Related Stories:
3 more Satyam directors quit
Upaid adds new clauses to lawsuit with Satyam
Satyam loses patent related case in UK; may appeal against order

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