Citibank, BNP Paribas asked to rescue Satyam

Amarchand & Mangaldas and Suresh A Shroff named legal advisors

Our Bureau HYDERABAD

THE NEW board tasked with saving a tottering Satyam Computer Services from collapse on Saturday named legal firms to defend it from lawsuits, appointed an internal auditor and set up an audit panel but reported little progress on tying up the cash it desperately needs to keep the company running.
    The six-member government-appointed board, which is continuing with its search for a new chief executive and a chief financial officer (CFO), will meet every week until the key posts are filled, a Satyam statement said.
    The board is in talks with banks and financial institutions to secure the cash it needs to pay salaries to over 50,000 employees by the end of this month and meet other operational expenses.
    "We talked to the existing bankers — Citibank and BNP Paribas — and requested them to understand the situation, provide additional funding and give them (Satyam) more time to repay loans," Deepak Parekh, HDFC Chairman and a member of the Satyam board, told ET.
    The board, whose nearly sevenhour meeting on Saturday was chaired by Mr Parekh, also set up a threemember audit panel to provide updates on the financials of Satyam, which is mired in a Rs 7,000-crore financial fraud that its founder B Ramalinga Raju has admitted to.
    "We took stock of various funding options, including raising loans from banks. A final view will be taken on Friday. Scheduling vendor payments was also discussed," said another board member.
    The audit panel would be steered by T N Manoharan, former president of the Institute of Chartered Accounts of India, and have C Achuthan, former Sebi official, and S B Mainak, LIC exofficial, as members.
    Former Nasscom president Kiran Karnik and Confederation of Indian Industry secretary-general Tarun Das will be the other members of the board.
    "We (the panel) will be giving regular updates on the financial situation of the company to the board," Mr Manoharan said.
    Amarchand & Mangaldas and Suresh A Shroff & Co will be the board's legal advisers and Chennai-based Brahmayya & Co the internal auditors of Satyam.
    The search for a CEO and CFO continues amidst reports that a Satyam insider may be offered the jobs in the interests of maintaining continuity at the software firm.
    "We have received a large number of resumes for the posts and we will take a decision as early as possible," Mr Achuthan said. Heads of six business units made a detailed presentation to the board and were asked to "lead their respective operations seamlessly," the statement said.
    Members of the board are in touch with key customers to prevent them from defecting to rival software providers and the directors have not "heard of deliveries being impacted in any way." "The board expressed that they have been in conversation with customers, who in turn have expressed their continued support, which is a very encouraging sign."
    Stripped of its cash, Satyam is fighting for survival and faces lawsuits with the potential liabilities of billions of dollars if it loses the legal battles. Two class action lawsuits have been filed in the US after Mr Raju confessed to doctoring the company's books. It is also entangled in a $1 billion legal tussle with UK-based mobile services payment company U-paid.