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| Satyam's top 20 clients are delighted: Karnik | | Q&A: Kiran Karnik |
| Leslie D`Monte / New Delhi Apr 20, 2009, 00:18 IST |
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 Kiran Karnik wanted to stay out of the limelight and take life a bit easy after seven years as Nasscom president. But Satyam happened and he was back in action, fire-fighting almost non-stop for over three months. In an interview with Leslie D'Monte, the Satyam Chairman discusses the road ahead — for Satyam and himself. Excerpts:
The Company Law Board (CLB) wants the current board to remain. Till when?
It could be a month; it could be six weeks; it could even be more. Frankly, I don't know how long. The government may have a very good reason for wanting the board members to continue, some of which I perfectly understand. However, what I do know for sure is that all six of us need not be on the Satyam board. Some of us can go, and should go. It's a private company. The government stepped in with good reason. It should now fully hand over the reins to the private company at the earliest. As for me, I would like to move out. The job is pretty much over.
How will the handover to Tech Mahindra take place?
The mechanics are being worked out. We are trying to put a very good transition plan in place. All that I can say at this moment is that Tech Mahindra is a good company, with able people on board. It should be able to handle things independently. Besides the two conditions — one of not selling the equity for three years and the other of no asset sale for two years — Tech Mahindra can do whatever it deems fit to run the company.
Does that imply that it can also ask surplus employees, if any, to leave?
In theory, it can do so except the 100 people which are in the list and cannot be touched for a year (a condition that the board, and not the government, inserted). There's no legal restriction.
But does Satyam have surplus employees?
I can’t put an exact number to this. The number is surely not in 100s but neither is it as exaggerated as some reports claim [he hints it is 4,000 to 5,000]. Tech Mahindra has a few options before it: First, it can lay off these surplus people. Second, it can try to bring in more business using these people, who have excellent skills and high-quality training. I know the environment is tough for getting new business, but things are bound to improve by the end of the year. Third, it can urge all Satyam employees to take a 10 per cent salary cut. This would ensure there are no lay-offs.
Have you, or any other board member, discussed this with the Mahindra group?
We cannot formally discuss anything with the new buyer till it deposits the entire amount. These are just suggestions. The final decision, of course, will lie with the Tech Mahindra board that also has to look at its bottom-line. However, the Mahindra group is a good and well-known group and I believe it is capable of handling the people issue with the sensitivity that is required.
How are Satyam clients reacting now?
I’ve spoken to the top 20 clients personally and they feel the uncertainty is over. They are delighted that the Mahindra group, which is a large and well-known brand, is buying Satyam. This has had a very positive impact. Only one client from the automotive sector felt that it could have a conflict of interest, so it would have to consult its board before taking a final decision. Of course, in this case too, I believe it will be solved, since there are major Indian IT firms that belong to groups that have similar conflicting interests. I’m also very hopeful that clients who walked away may choose to come back. Moreover, I also believe there will be more business coming from clients who were waiting for this uncertainty to end.
Does that mean that the Tech M-Satyam combine will emerge the fourth largest Indian IT services player?
I do believe there’s a very good possibility of this happening [Karnik was President of software body Nasscom, which does the annual industry ranking].
What about the claims arising from the Upaid case?
Satyam has a strong case but Tech Mahindra may not want to get into needless rounds of court cases. It may prefer an out-of-court settlement as a matter of convenience. But that’s a matter for the Tech Mahindra management to decide. As for Ramalinga Raju’s claim, we have strong legal opinion that the case will not hold water (loosely put, a person who has admitted to fraud cannot monetarily benefit from the money).
What do you plan to do next? Many companies may want you on their boards.
(Laughs) I personally don’t want any more full-time jobs. It does not mean that I plan to disappear into the horizon. But I would definitely like to sit back, read and spend time with my friends and family. I have also been spending a fair amount of time with non-government organisations (NGOs), which I will continue doing.
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