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| 'Fear of US lawsuits kept govt away from Satyam revamp' |
| Press Trust of India / New Delhi Jan 07, 2010, 17:47 IST |
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Fear of legal action against damages by the US prevented the government from becoming a party to rehabilitation of the crisis-ridden Satyam Computer Services, said former Corporate Affairs Minister Prem Chand Gupta.
"Although some of my colleagues had given public statement that the government would provide funding to Satyam...If the government had become a party in the whole issue, there would have been class suits (in the US) against the government for not performing duty of corporate governance," he told PTI.
Gupta was the Corporate Affairs Minister when a letter of admission of accounting fraud by Satyam Computer Services founder B Ramalinga Raju to Securities and Exchanges Board of India (SEBI) shook the corporate world.
"It (Raju's confession) was like a jolt to me...As the company had operations in about 60 countries and employed about 53,000 people," he said, recalling the e-mail sent by Raju to SEBI on January 7 last year.
Although Satyam has been bought over by Tech Mahindra after competitive bidding, it is facing about 12 class action suits in the US that may result in huge liabilities to the firm.
During the process of rehabilitating Satyam, the government acted as a facilitator carrying out the Company Law Board's orders and did not take any financial liability. The government, however, did order an enquiry by its arm Serious Fraud Investigation Office and the CBI to punish the guilty.
Recalling the steps government took to salvage Satyam, Gupta said: "I consulted the Prime Minister Manmohan Singh, there was a meeting in his house attended by cabinet colleagues and senior officials and ultimately my view was taken by them. I told the PMO that if we become a party unnecessarily then this (suits) would be the next thing. My view was appreciated."
Asked if the government is prepared to prevent such frauds in the future, he said, there are enough checks and balances. "However, if somebody is determined to do wrong, nothing can stop him," he said, adding, "If the government keeps on intervening in every fraud, then there would be no end, there would be many Satyams."
Satyam, now, is almost back on its foot. The headcount has been rationalised. As against 50,000 last January, the current headcount stands at 30,000. From April, till date about 40 new clients have been added, taking the total client number to over 400.
Today, Gupta feels a content man at the way the whole Satyam gamut was handled.
"I am getting hundreds of phone calls, SMSes, emails, about the firm determination with which we revived Satyam from the crisis. This thing has been appreciated world-over, discussed in various international platforms and it was appreciated all over," said Gupta.
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