No government bailout package for Satyam: Minister
By IANSWednesday, January 14, 2009
NEW DELHI - The government has no plans to unveil a bailout package for fraud-hit Satyam Computer Services and the company’s new board will decide its future course of action, Minister of State for Industry Ashwani Kumar has said.
‘This government is not going to either directly or indirectly subsidise the wrongdoing and fraud in Satyam,’ Kumar told reporters on the margins of an international conference on petroleum sector here Thursday.
‘This is a decision that the new board of Satyam will take,’ he said, referring to the three-member board appointed by the government last weekend to restore the confidence employees, investors and clients on the beleaguered company.
Corporate Affairs Minister P.C. Gupta also said that the board has not asked for any bailout package and that the company had enough resources and capability to continue with its affairs.
The founder and former chairman of Satyam B. Ramalinga Raju had stunned the corporate world last week by admitting to a Rs.70-billion ($1.43 billion) fraud by overstating profits and bank balances.
According to Kumar, the scam at Satyam was an aberration that will not hamper the growth of the Indian software and business process outsourcing industries that have earned an enviable reputation the world over.
‘The government will try to ensure to the extent possible that the brand equity of the country’s IT sector and Satyam in terms of its intellectual capital is preserved and jobs are secured to the extent possible,’ he said.
‘We will do whatever we can to preserve and save jobs and to protect the good name of the Indian corporate sector,’ he said, adding: ‘We will not intervene in the company. The new board will take the decisions.’
Three directors are now overseeing the functioning of Satyam, even as probes into the fraud and possible manipulation of its books of accounts are being conducted by agencies including the Serious Fraud Investigation Office.
The board comprises Deepak Parekh, chairman of Housing Development Finance Corp, Kiran Karnik, former president of the National Association of Software and Service Companies, and C. Achuthan, former member of the Securities and Exchange Board of India.
