City court sends Satyam's top executives to police custody
An Indian metropolitan court in the southern city of Hyderabad has ordered the former chairman, managing director and chief financial officer of embattled Satyam Computer Services be taken into police custody for four days from yesterday.
"They will be taken into police custody for 96 hours," said VSK Kaumudi, Inspector-General of Police in Hyderabad, citing the court order that ruled on a petition filed by the Andhra Pradesh state police.
Bharat Kumar, a lawyer for the founding Raju brothers and CFO Vadlamani Srinivas, said he would file an appeal opposing the metropolitan court's decision.
Satyam, India's No4 software services exporter, has been battling for survival since Ramalinga Raju resigned as chairman earlier this month, revealing profits had been falsified for years and that $1 billion (Dh3.67bn) of cash on the books did not exist.
Yesterday, the Economic Times reported the new board of embattled Satyam Computer Services has asked Citigroup and BNP Paribas, its bankers, to help with immediate funding needs.
"We talked to 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, a senior banker and a newly-appointed board member, was quoted as saying.
A government-appointed board, which met on Saturday, said it was looking for a new chief executive and chief financial officer for the outsourcing firm at the centre of India's biggest corporate scandal dubbed as "India's Enron".
The board, which also discussed scheduling of vendor payments, said it had received expressions of support from clients including Nestle and General Electric.
As analysts questioned if Satyam had enough money to pay its 50,000-odd staff, Economic Affairs Secretary Ashok Chawla said on Thursday the government was not looking at any direct support for the company or a bailout "at this stage".
The board last week appointed KPMG and Deloitte to help it restate accounts, a process Parekh has said will take 8-12 weeks.
The government, which dissolved Satyam's previous board, appointed three new directors on Thursday in addition to the three it appointed last week to help steer the company out of the crisis which Prime Minister Manmohan Singh said was a risk to India's corporate image.
"It indicates how fraud and malfeasance in one company can inflict suffering on many and can also tarnish India's image more broadly," the prime minister said at an awards function in Mumbai on Saturday.
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