| Satyam embarks on damage control exercise | |
| Press Trust of India / Hyderabad January 8, 2009, 20:38 IST | |
Beleaguered Satyam today embarked on a major damage control exercise to pull itself from the brink, pushed to by founder Ramalinga Raju, saying arranging liquidity, assuaging fears of 53,000 employees and continuing the existing business would be its top priority.
Not ruling out initiating action against Raju or the auditors Price Waterhouse (PwC) for its complicity in fudging of accounts, the interim CEO Ram Mynampati said every possible action would be considered against Raju, who quit as chairman after making startling revelations on corporate India's biggest fraud entailing about Rs 7,800 crore.
Aimed at preventing panic exodus of highly talented workforce and top management, the interim CEO said that the December 2008 salaries has been paid and the management would be focusing on arranging funds, which at the present juncture was a cause for concern.
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"We do not rule out recommending action against Ramalinga. Many actions are possible for Satyam's future," he said, adding that the company was not aware of his whereabouts amid reports that the disgraced founder of the country's fourth largest IT company had left for the US yesterday before the news of his resignation and disclosure became public.
On the auditor Price Waterhouse, who have been authenticating year after year the company's accounts, which Raju admitted to fudging by inflating profits and creating fictitious assets, Mynampati said: "We have not verified what process PwC took to certify financial statement. We are not yet in touch with PwC."
In the middle of the press conference held by the interim management at Satyam's headquarters here, CFO Valdamani Srinivas, who is the financial custodian of the company, sent in his resignation but Mynampati said the board would decide on it on January 10 and anyway he has to serve notice period.
Interim CEO Ram Mynampati declared that the liquidity and cash-in-hand were not encouraging, although the company managed to pay salaries for December month.
"Some outstanding payment to vendors is yet to be made... We are verifying the liquidity and balance sheet... We have to raise liquidity in near term and are confident of raising it," said Mynampati, while adding that his appointment was legal.
On the financial irregularities disclosed by former Satyam Chairman Ramalinga Raju, Mynampati said the team was not yet in a position to answer these issues, as it is still ascertaining disclosures made by Ramalinga Raju and trying to correct financial irregularities.
He said the regulatory bodies have already started their inspection and a team of market regulator Sebi was in Satyam talking to associates.
He said the company has started to actively reach out to customers globally and has been heartened to receive strong expressions of confidence and
support from them.
"Our top 100 clients account for 80 per cent of Satyam's revenues," he said, adding that the top priority would be to clear pending contracts and continue with the business as usual.
The company founded by Ramalinga Raju in 1987 received its worst shock yesterday when he disclosed what has now become the country's biggest corporate fraud involving about Rs 7,800 crore.
Satyam is in the process of finding new investment banker as soon as possible to pursue strategic options left with the company and also expand the board, which is now left with only three members including Mynampati.
Shareholders would be consulted on whatever options there are before the company, he said to a question on whether the company would explore merging or being taken over.
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