Tech Mahindra puts own men on Satyam board, to take full control later

Last Thursday, Tech Mahindra filed an affidavit to the CLB, proposing four names for the Satyam board. These are: Vineet Nayyar (vice-chairman, managing director and CEO of Tech Mahindraa), Ulhas N .Yargop (director), Sanjay Kalra (president - strategic initiatives), and C.P. Gurnani (president - international operations).

After going through the affidavit, CLB not only noted that Tech Mahindra was "a technically and financially competent/qualified strategic investor" and allowed it to put its own men on board but also granted the proposed directors legal immunity from "civil, criminal, punitive or coercive action...for the acts of commission occurred in the company prior to January 9, 2009." However, these four directors were directed to cooperate with all agencies that are investigating India's biggest corporate fraud perpetrated by Satyam's founder and former chairman Ramalinga Raju, who is currently languishing in jail. With the addition of these four new directors, Satyam now has ten directors on board, the maximum allowed by the CLB.

The other six directors - HDFC chairman Deepak Parekh, former Securities and Exchange Board of India (SEBI) member C. Achuthan, IT expert Kiran Karnik, Confederation of Indian Industry (CII) chief mentor Tarun Das, former president of the Institute of Chartered Accountants of India (ICAI) T.N. Manoharan and Life Insurance Corporation (LIC) nominee S. Balakrishna Mainak - were all appointed by the government after it dissolved the board which allowed the $1.5 billion accounting fraud to take place. The six government-appointed directors now on Satyam's board will continue to assume their responsibilities till Tech Mahindra completes a few regulatory requirements in India, the US and Germany to take control of Satyam and the CLB is satisfied that the company's business operations are stable.

According to the CLB, Satyam "became a weeping orphan overnight when its promoter B Ramalinga Raju abandoned it after making a confessional statement." However, the government took over the company "with the view to wipe out its tears" and appointed competent and highly respected individuals on its board acted not only as directors who acted "like foster fathers to heal the wounds of the orphaned Satyam. "