Coordinated action to steer Satyam Computers Ltd

Rajus could be let off the hook, after extracting some fines, as Satyam Computers Ltd without the Rajus, may not be able to function to its full potential........

Moreover, Rajus enjoy high political immunity, as they are believed to be closer to both the ruling party (the Congress) and Telegu Desham in Andhra Pradesh .

Three days after Satyam Computer founder B Ramalinga Raju admitted to fraud, government agencies have decided to act in unison to steer the company out of the debris of destroyed credibility and empty coffers.

The ministry of corporate affairs and Securities & Exchange Board of India, whos top office bearers met in New Delhi, have decided to take “coordinated action”. One of the first decisions they will need to take is on a letter received from US-based Lazard Asset Management LLC, Satyam's largest shareholder with 7.4 per equity, seeking a seat on Satyam’s new board.

“Sebi Chairman C B Bhave met the secretary and minister of corporate affairs to apprise them of the investigations and exchange information,” said a senior ministry official.

The ministries of corporate affairs, finance and law, and the Prime Minister’s Office are together reconstituting the company’s board. Since the new board has to have its first meeting within seven days, the hunt is on for suitable directors.

“It could happen any time,” said the ministry official. The new board members could be from any field. However, the government is unlikely to plump from anyone with links to the information technology sector.

The government yesterday superseded the board of Satyam and decided to appoint 10 nominee-directors. The new board will take a decision on a new management team.

Sebi said it would soon appoint an independent auditor to review the accounts and balance-sheet prepared by Satyam’s statutory auditor, Price Waterhouse.

Meanwhile, the US-based Lazard Asset Management, Satyam's largest shareholder with a 7.4 per cent stake, has sought a seat on Satyam’s board. Corporate Affairs Minister Prem Chand Gupta said the government had received a letter from Lazard which "was being looked into".

Lazard has limited operations in India in investment banking and has just set up a private equity team. The employees of its investment banking team in India said they did not know about the letter.

Government-owned Life Insurance Corporation is another large shareholder with 4.34 per cent. When asked about its interest in joining the new board, LIC Managing Director Thomas Matthew T said: “We are positive about the company’s prospects. LIC is examining the situation and would proceed accordingly as things progress.”

The corporation believes that the steps taken by the government will restore investor confidence. “The government will take the final decision on the issues relating board positions,” the MD added.