Govt may intervene in Satyam board making
Following the resignation of the three independent directors, the board can't take any business decision. Satyam Fraud: The big questions | Latest on Satyam
By Prabhakar Sinha, TNN |
NEW DELHI: To control the damage and save investment of shareholders, government may intervene to reconstitute the board of directors of Satyam Computers.
A source in the government said that as Raju and his management has lost all the credibility, it would not be appropriate to allow him to chair the board meeting for the selection of the next chairman and other directors on the board. Government will take a decision towards this end within a few days.
In the last two weeks, four directors, including three independent directors have already resigned from Satyam. On Wednesday, the managing director and younger brother of Raju, B Rama Raju has also resigned.
However, Raju and Rama Raju in their resignations had said that they would continue to function till the next arrangement is made. But, the government source said that the board would not be in the position to take any business decision under the chairmanship of Raju.
Following the resignation of the three independent directors, the board can't take any business decision.
After resignation of four directors, the board is not in compliance with the rules of the Indian stock exchanges, which requires that at least 50% of the company's directors be independent.
The existing board has to be expanded to meet the statutory requirements. Also, the promoter directors are willing to quit, giving government enough room to act.
A source in the government said that as Raju and his management has lost all the credibility, it would not be appropriate to allow him to chair the board meeting for the selection of the next chairman and other directors on the board. Government will take a decision towards this end within a few days.
In the last two weeks, four directors, including three independent directors have already resigned from Satyam. On Wednesday, the managing director and younger brother of Raju, B Rama Raju has also resigned.
However, Raju and Rama Raju in their resignations had said that they would continue to function till the next arrangement is made. But, the government source said that the board would not be in the position to take any business decision under the chairmanship of Raju.
Following the resignation of the three independent directors, the board can't take any business decision.
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After resignation of four directors, the board is not in compliance with the rules of the Indian stock exchanges, which requires that at least 50% of the company's directors be independent.
The existing board has to be expanded to meet the statutory requirements. Also, the promoter directors are willing to quit, giving government enough room to act.
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