Swinging into action on the very first day of taking charge of the scam-tainted Satyam [Get Quote], its three-member board on Monday announced that top management would be changed and every effort made to address the prime concern of liquidity, including asking main clients to make advance payments.
Announcing the decisions taken at the meeting of the three-member board constituted by the government, member Deepak Parekh said new CEO and CFO would be appointed, while government would soon fill up vacancies at the board that would later elect a chairman.
The board would ask the clients to pay advance against dues to tide over immediate liquidity needs.
Noting that there was a large number of receivables -- payments due from clients -- Parekh said: "If (the receivables) come on time liquidity will be sufficient. But these need to be authenticated...
"Most of the clients are 'AAA' (top investment grade rated). So we can ask them for advance against receivables," Parekh said and added that the board has identified two independent accounting firms and they are likely to make their proposals on Tuesday.
Within 48 hours, a new independent accounting firm will be in place to look at the third quarter financial performance of the company, for announcement of which the board is seeking extension beyond scheduled January 16.
"Working capital needs immediate attention," Parekh said, but added that the board has not yet determined the amount of liquidity that is required.
Asked whether the new CEO and CFO would be from the internal team, Parekh said he hoped that in the next few weeks the board would find someone. But given the situation it would be difficult to find willing candidates.
Asked if the board would approach banks for immediate fund requirements, Parekh said: "No bank will be willing to give credit line unless it looks at the authenticated numbers."
On whether the board would look at the possibility of merger, he said: "We will look at all options."
"The top priority is to restore the confidence of customers, employees, suppliers and investors... Satyam has a lot of marquee customers, so the sustainability of service is a priority," he said, adding that the board would have to meet frequently in the next few months given the enormity of the issues at hand.
The next meeting could be in the next 48 hours. Another member C Achuthan said that the board has not sought any immunity from lawsuits as such for the company. About a dozen lawsuits have been filed in the US against Satyam, its founder Ramalinga Raju and his brother Rama Raju charging them with duping thousands of investors of billions of dollars.
Asked if PwC would be sued, Parekh said investigations were going on and it was too premature to comment on the issue.
On conflict of interest of two of the new board members, Parekh said: "All three of us have been appointed by the Centre keeping in mind all the aspects." He, however, announced that Kiran Karnik has resigned from the board of Satyam-AP government venture, EMRI
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