Mynampati reverses stand; now says IT is thriving

At his first press conference on January 7, Satyam’s now-dislodged interim chief executive officer Ram Mynampati was emphatic that Satyam’s core business of information technology was under no threat and that it “continues to thrive and succeed in a broader competitive landscape”.

Just three weeks before that, Mynampati, who was the highest-paid executive at India’s fourth largest software services company, told his fellow board members exactly the opposite. At the December 16 board meeting, Mynampati gave a detailed presentation on why sticking to IT just did not make sense.

M Rammohan Rao, who chaired the meeting as the Raju brothers were “interested and concerned” in these proposals, had asked Mynampati to explain the rationale for acquiring equity in the two Maytas companies promoted by the Satyam family.

Mynampati said diversification into real estate was a must, as accelerated growth in IT was difficult in the current economic situation, at least for the next two years. He said the software services business would face pricing and margin pressures, continued foreign exchange volatility, certain discomfort around outsourcing views of the US government, lack of potential growth opportunities in emerging markets, and 95 per cent dependence on developed country markets, which were the worst hit.

Mynampati said Satyam had no option but to reduce risk by diversifying into other areas. IT industry analysts are surprised that all this came from a man who has been saying that he had no idea about what was going on at the top level in Satyam.