Satyam Appoints Internal Auditor, Legal Advisors; CEO & CFO Search On

19 January, 2009

The board of directors of Satyam Computer Services has named an internal auditor and has also formed an audit committee to look into the accounts of the company. The borad, which met on Saturday, named Brahmayya & Co — a Chennai-based chartered accountancy firm — as its internal auditor with immediate effect. It has also appointed Amarchand & Mangaldas and Suresh A. Shroff & Co as legal advisers to the board.

A statement issued after the board meeting said an audit committee had been formed with T.N. Manoharan (former ICAI chairman) as chairman and C. Achuthan and S.B. Mainak as members. However, the board failed to name a chairman. As of now the board meetings will be chaired by members of board on a rotating basis. The new board has also not been able to name a chief executive or a chief financial officer yet.

Meanwhile, a court in Hyderabad sent Satyam founder B. Ramalinga Raju, his brother Rama Raju and former chief financial officer Vadlamani Srinivas to police custody till January 22. Investigating agencies have been allowed to interrogate them in the presence of their counsel between 7am and 5pm over the next four days, news reports say.

Satyam’s expanded board of six directors will meet again within a week. Deepak Parekh chaired Saturday’s meeting. The other board members include C Achuthan, Kiran Karnik, Tarun Tas, T N Manoharan and Balakrishnan.

The board is also in the process of raising capital to meet the working capital requirements of the company.  Apparently, officials from several banks, including Citibank and ICICI Bank, have been in discussion with the new leadership, reports suggest.

The board had earlier appointed KPMG and Deloitte as consutants to lookin into the accounts of the tech company. But the Institute of Chartered Accountants of India (ICAI) – which governs accountants in India – had objected to this saying both were not registered with ICAI as auditors. The ICAI had asked the board to reconsider the appointment since KPMG was not registered with the institute.

The board said until they find a new CEO and CFO for Satyam, they would continue to meet every week “to address ongoing issues”.

 


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1 Comment
JR . 5 years ago

I think the whole issue of “what Satyam means for Indian companies” is way overblown. For one, the US has such massive fish to fry in its own backyard that no one is really taking note. Secondly, by now even the worst US xenophobes can not deny that the US is not scandal-free and thus may not point the moral finger at anyone. Finally, those objecting to outsourcing have long said that India is no better than the US; fine, than the other side of the coin is that India is no worse. Let’s just say that a good corporate scandal or two is nothing more than India’s coming out party. In a strange way, it may make corporate America feel better: like English, corporate shenanigans are yet another commonality.

Satyam Appoints Internal Auditor, Legal Advisors; CEO & CFO Search On

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