BY IANS,
Bangalore : T.R. Prasad, independent director on the board of
Satyam Computer Services, Tuesday declared he would continue in the
non-executive post despite four other directors quitting in succession.
“I will continue on the Satyam board, as resigning now would mean deserting
a troubled ship,” Prasad, a former cabinet secretary with the central
government, said in a statement.
In view of doubts being raised on the continuance of the remaining three
independent directors – V.S. Raju, V.P. Rama Rao and himself – Prasad said
the $2-billion Satyam was a major player in the global IT space, employing
over 50,000 of the best and the brightest of professionals, with vendor
commitments to several global corporates and entities.
“The 21-year-old company is almost entirely owned by the public, either
directly or through financial institutions. Restoring their confidence is
the task of utmost importance awaiting the consideration of the board for
which we are availing the services of DSP Merrill Lynch,” Prasad said.
The Hyderabad-based global software exporter had engaged the financial
adviser DSP Merrill Lynch to assist the board in reviewing the various
options before its next meeting, rescheduled to Jan 10 from Dec 29.
Two independent directors – M. Rammohan Rao and Vinod K. Dham – and
non-executive director Krishna G. Palepu resigned from the board Monday,
while another independent director, Mangalam Srinivasan, quit Dec 25.
The spate of resignations follows the top management’s aborted bid to
acquire the two realty firms – Maytas Properties and Maytas Infra – run by
two sons of Satyam founder-chairman B. Ramalinga Raju, for $1.6 billion
(Rs.79.2 billion) to bail them out of cash crunch.
The various options to be considered by the board at the Jan 10 meeting
include strengthening Satyam’s governance, among other things, by increasing
the size and altering its composition.
“Completing this ongoing task, in my view, is a public duty and
responsibility. Hence I intend continuing on the board, at least till this
commitment is fulfilled,” Prasad asserted.
Following the resignation of the four directors, the strength of the
10-member Satyam board has been effectively reduced to six, including three
independent directors, one whole-time director (Ram Mynampati) and two
promoter directors (Ramalinga Raju and B. Rama Raju).
The promoters, including Raju’s family members, hold a minority stake of
8.61 percent in the beleaguered company.
Foreign institutional investors (FIIs) collectively hold a majority stake in
Satyam, with 48.22 percent of the total equity, while Indian financial
institutions (FIs) hold 12.91 percent. Others including retail investors
have the remaining 30.38 percent of the equity.
Raju has also asked the board to include the possible dilution of the
promoters’ holding in the company in the agenda for consideration at the Jan
10 meeting.