Three-member board constituted for Satyam

In a swift action to salvage the beleaguered Satyam Computer Services, the Centre on Sunday set up a three-member board by nominating HDFC chairman Deepak Parekh, the former Nasscom president, Kiran Karnik, and the ex-SEBI member, C. Achutan, as independent directors to take charge of the Hyderabad-based IT major and chart out the future course of action.

The new board is to hold its first meeting on Monday.

Making the announcement at a hurriedly convened press conference here, Corporate Affairs Minister Prem Chand Gupta said: “The board is expected to meet within 24 hours and decide [on] the further course of action.”

The board could have a maximum of 10 members, as per the order of the Company Law Board, and therefore more persons would be inducted soon.

On Friday, the government sacked the remaining three directors on Satyam’s erstwhile board within days of its founder-chairman B. Ramalinga Raju, owning up a Rs. 7,100-crore accounting fraud and quitting his post.

According to Mr. Gupta, it “would be an independent board with full authority to act in the interest of the company ... It will make its own assessment and take appropriate decisions.”

Its priority would be “to restore the company’s credibility, customer confidence and employee morale, as also to safeguard the interest of investors and other stakeholders.”

As all the three members would act as independent directors, the Minister expressed the hope that the new board would be able to provide the “necessary vision, along with responsible and accountable leadership, to the company in this hour of crisis.” With regard to the institutional investors’ demand for representation on the board, Mr. Gupta said: “All options are open in the interest of the company … Further appointments to the board may be made subsequently as required.”

Confederation of Indian Industry director-general Chandrajit Banerjee said swift action by the government was required to save Satyam and the appointment of the new board was “an important and clear step” in that direction.

Speaking to , Mr. Banerjee said the board now had a “good combination,” as the three members were reputed in their fields for their practices in corporate governance. Another key accused in the Rs. 7,100 crore Satyam Computer Services fraud, Vadlamani Srinivas, who was Chief Financial Officer and considered close to the ex-chairman, B. Ramalinga Raju, was remanded to judicial custody till January ...