Satyam-Maytas deal fiasco puts focus on independent directors

The Satyam-Maytas fiasco has drawn the attention of government towards the role of independent directors, especially when the new Companies Bill provides for 33 per cent of such directors in boards of companies.

"In the longer run, it needs to be seen what is the problem with the role taken by independent directors," official sources said.

The Satyam deal certainly raises the question whether the independent directors of the company failed to carry their duties, they added.

India's fourth largest software company Satyam Computer Services last week decided to buy two firms -- Maytas Properties and Maytas Infra -- promoted by Satyam chief R Raju's two sons for $1.6 billion (about Rs 8,000 crore), but called off the deal within few hours following investors' wrath.

The IT major's decision to buy out the two firms also raised the larger issue of corporate governance.

Satyam's Board, including independent directors, had unanimously given a go-ahead to the deal.

The listed companies are already bound by Sebi's Listing Agreement, which calls for certain proportion of independent directors in the board for keeping a check on the management of companies and work as an oversight mechanism.

Apart from value addition they are also entrusted with the task of representing the financial interests of others investors.