Read on www.thenational.ae
The Indian IT giant, Satyam, could become insolvent within months if emergency financing is not secured, the interim chief executive, Ram Mynampati, told the first press conference since former chairman B Ramalinga Raju confessed to a US$1 billion (Dh3.67bn) accounting fraud at the company.
“It is not very encouraging as far as cash on hand is concerned,” Mr Mynampati said yesterday in the company’s Hyderabad headquarters. “We are confident that we will be in a situation to deal with our obligations for this month.”
He said the company had “healthy receivables” but would need to raise more funding. “What we know is that we need some assistance as far as liquidity is concerned.”
Satyam’s shocked interim management yesterday launched a damage limitation exercise, attempting to assure the world that the company could be salvaged.
“We have not seen anything like this in our lives, for us to set this right is a long-term process,” Mr Mynampati said.
The interim management has been racing to contact key clients, who include the Dubai municipality, the UAE Ministry of the Interior and the global giants Unilever, ArcelorMittal, Nestlé, Cisco Systems, GE, Sony and FIFA.
“We have been working full-time day and night,” said Keshab Panda, the head of Europe and the Middle East for Satyam. “We needed to locate 600 customers within three hours. At 10am we got the message and by 1pm we had gone to 120 top customers.”
Mr Mynampati said: “Many clients rely on Satyam for mission-critical tasks.”
He said he was confident that customers would stand by the company. “We have already received many expressions of support from our key customers and they will continue to work with us.”
Outsourcing consultancy Forrester Research has said it expected as many as half of Satyam’s customers to desert it in the coming months.
Mr Mynampati took over as interim chief executive after Mr Raju admitted that he and his managing director brother, B Rama Raju, had been inflating the company’s profits over “several years”, creating a gap between the audited accounts and the real figures of more than $1bn.
At the press conference, Mr Mynampati announced that the chief financial officer, V Srinivas, on Wednesday had also offered to resign immediately, but it had not been accepted, meaning Mr Srinivas would return to work next week to serve out his notice and help clear up the company’s finances. Mr Srinivas could not attend the conference owing to personal reasons, Mr Mynampati said.
Mr Mynampati said he had talked by phone with B Ramalinga Raju, B Rama Raju and Mr Srinivas half an hour after the letter was released to the board and the stock exchanges.
Mr Raju’s lawyer S Bharat Kumar yesterday afternoon denied reports that the former chairman had fled India for Dubai or Texas. A team from the Indian stock exchange regulator SEBI spent yesterday in Satyam’s Hyderabad offices interviewing key staff.
B Ramalinga Raju faces jail and having to pay huge civil damages if found guilty of fraud. Under Indian law, directors who willfully misrepresent the accounts can spend up to 10 years in jail.