Ramalinga Raju may not chair Satyam board meet

27 Dec 2008, 0110 hrs IST, Kingshuk Nag, TNN

HYDERABAD: Stunned by the attacks from all sides, Satyam chief Ramalinga Raju may offer not to chair the company's crucial board meeting on December 29th and even step down from the chairmanship of the company temporarily, sources told TOI.

This development
comes with pressure mounting on the independent directors to take moral responsibility for the aborted Satyam-Maytas deal that has sent the company on a downward spiral. Dean of Indian School of Business (ISB), M Rammohan Rao, who chaired the crucial board meeting which approved the ill-fated deal to buy the two Maytas companies, is also believed to have been ‘‘informally advised'' by Andhra Pradesh government representatives to quit the Satyam board.

Meanwhile, Left MP Abani Roy has demanded Satyam Computer Services
board member (independent) Rammohan Rao resign from his positions in various government and regulatory committees. Citing media reports, Roy, a Rajya Sabha MP, has written a letter to Prime Minister Manmohan Singh saying: “His actions in the boardroom of Satyam further accentuated by his stoic silence on various issues reflect an irresponsible role of conduct on his behalf.”

The board meeting on December 29 has been convened primarily to consider the prospects of buying back the company's shares. However, it is also quite obvious that the board members will use this opportunity to recapitulate all that has happened in the past two weeks and decide on a plan of action, including any changes that may be required to get the company back on a respectable footing.

Sources claim that Rammohan Rao may reconsider his earlier decision of continuing on the board of Satyam. When asked by TOI about this, Rao said: ‘‘I am not taking any actions at the moment.'' But significantly he added: ‘‘At the next board meeting there will be discussions, clarifications will be sought, then I will take it forward.''

Indications are that one of the independent directors, former cabinetsecretary T R Prasad might aggressively question the company's management policies at the next board meeting. Prasad -- who, as Union heavy industry secretary in 1996, crossed swords with Suzuki over the Maruti issue and also functioned as Maruti Udyog Limited's chairman -- joined the Satyam board only in April 2007.

Sources say that Prasad would be pushed into taking a more active role in Satyam's affairs, what with the company coming under close scrutiny from Sebi and the department of company affairs. ‘‘Having held the top most civil services position in the country, Prasad is well placed to guide the company out of trouble at least domestically,'' a highly placed source said.

Satyam's oldest director Mangalam Srinivasan - who has been a director on Satyam's board since 1991 - resigned on Christmas Day, taking moral responsibility for being part of the aborted deal. Analysts said that it was significant that 70-year-old Srinivasan - an academic in the US - resigned. ‘‘She had been with Ramalinga Raju since Satyam Computers was merely four years old and the company has just got its first contract in the US. Her quitting has been a shocker for the Satyam supremo,'' an analyst said.

The other independent directors on Satyam's board include father of Pentium Vinod Dham and former director of IIT, Delhi, U S Raju. Sources say that Raju is not likely to quit the board, but there were no clear indications on what could be playing on Dham's mind. Vinod Dham joined the Satyam board in January 2003, along with Harvard Business School professor Krishna Palepu. But as per the definitions of the NYSE, Palepu does not qualify as an independent director of Satyam.

Via:E.T