Satyam saga continues

There is no end in sight to the misery of the beleaguered IT major Satyam Computer Services, as three more Independent Directors put in their papers even as the management tried hard to keep the employee morale up. One independent director, however came to the rescue of Satyam, saying that he won't quit the sinking ship. The stock shot up during the week on expectations of an imminent change in top management in the wake of a series of disastrous moves that have violated all norms of corporate governance. Media reports suggested that rival software firms (both global as well as local) along with private equity players were looking at acquiring the country's No.4 software exporter.

Satyam announced that the board meeting that was slated on December 29 has been postponed until January 10, to consider the sale of a stake by the owners and a possible buy-back of shares. "In order to ensure that these questions are properly addresses, and that the interests of stakeholders are fully and carefully considered, Satyam has decided to broaden and scope of its deliberations beyond a possible buy-back of its stock," said B Ramalinga Raju, Chairman and Founder of Satyam. The company also confirmed that its promoters pledged all their shares, held by the family-run SRSR Holding Pvt. Ltd., with institutional lenders over a period of time since September 2006.

Interestingly, Satyam said two independent directors, Vinod Dham (the father of Pentium) and Krishna G. Palepu (professor in Harvard Business School), wanted to participate in the meeting sometime during the second of week of January. However, the two, along with one more independent director, Mendu Rammohan Rao (Dean of the Indian School of Business), stepped down from the company's board. The move brought down the number of directors on the Satyam board to just five. The longest-serving member Mangalam Srinivasan quit last week. But, former Union Cabinet Secretary, T. R. Prasad and another independent director V. S. Raju, former Dean of IIT-Delhi, made it clear that they were not resigning.