| Troubled Raju turns to staff for support | |
| BS Reporter / Hyderabad December 31, 2008, 0:23 IST | |
Satyam to focus on IT, BPO, chairman tells staff; TR Prasad to stay.
Stung by the investor outrage over its aborted proposal to buy two promoter-related firms, Satyam Computer Services Chairman B Ramalinga Raju told employees that the company would stick to information technology and business process outsourcing and that the company’s customers “continue to show a high level of trust in Satyam”.
In an email, Raju said: “While the idea that we could diversify into an unrelated business was rejected by our investors, it was formed with the belief that doing so would not imperil our leadership in our core business or lessen our commitment to it, and that all stakeholders would benefit.”
He added: “Satyam did not — and does not now — intend to retreat from IT and BPO services in any way, and going forward, Satyam will focus exclusively on these markets.”
Satyam has 52,865 employees on its rolls and 650 clients worldwide.
Breaking his silence over the embarrassing developments of the past fortnight, Raju reiterated that the board arrived at its decision to invest almost Rs 8,000 crore in Maytas Infra and Maytas Properties by following all the required processes and procedures. There was, he wrote, “spirited discussion among members”, their vote to approve the motion was unanimous.
The company’s share rose 8.3 per cent on Tuesday to Rs 160.60 on the Bombay Stock Exchange, compared with the previous day’s close of Rs 148.25.
Raju said that Satyam had also been in contact with many of its investors, and the company had taken key steps to regain their confidence. These included strengthening the board by changing its size and composition and engaging DSP Merrill Lynch to provide strategic advice and options. The board will meet on January 10 to consider these options and to chart a course of action to boost stakeholder confidence.
Meanwhile, Satyam was given a respite on Tuesday with former cabinet secretary and independent director TR Prasad deciding to continue on the board of the IT major.
Prasad stated that “resigning from the board now is like deserting a troubled ship”, dispelling doubts over his continuance on the Satyam’s board after three independent directors of the company resigned on Monday and one last week.
In an email, Prasad said Satyam today was almost entirely owned by the public, either directly or through foreign institutional investors. Restoring the confidence of all these stakeholders was the task of utmost importance that was awaiting the board’s consideration.
“Proposed measures include strengthening Satyam’s governance, inter alia, by increasing the size and altering the composition of the board. Completing this ongoing task, in my view, is a public duty and responsibility and I intend continuing on the board at least till this commitment is fulfilled,” Prasad added.
Satyam has also sought more time from the Registrar of Companies (RoC) to submit the minutes of the board meeting at which the decision to acquire the two Maytas companies was taken. The company had sought time till January 10, the same day as Satyam’s board meeting.
Confirming the development, an RoC official said: “We have asked Satyam and the Maytas management to furnish a reply within seven days on details as to what circumstances these companies zeroed in on the acquisition deal and on what basis the valuation has been done. We have received a request from Satyam and Maytas on Monday seeking an extension.”
The officials added that the RoC has already started examining the documents available with us till March 31, 2008.
Also read:
Dec 30: Satyam loses three more directors
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