Satyam appoints banks, looks at funding options

Fraud-hit outsourcer Satyam has appointed Goldman Sachs and Avendus to help it find a possible buyer.

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Fraud-hit outsourcer Satyam has appointed Goldman Sachs and Avendus to help it find a possible buyer.

The government-appointed six-member Satyam Board also appointed Boston Consulting Group as management advisers to look at funding options for the next few weeks and to support the state-appointed directors and management team.

The board revealed that it had received "several proposals" from corporate entities and private equity firms, for some or all of Satyam's business.

But director T.N. Manoharan said: "A sale of ‘parts’ of Satyam at this stage would be contrary to the mandate of regulating the affairs of Satyam as a going concern, as stipulated by the Government of India. It is therefore not an option that is being evaluated currently."

The board was also expected to discuss the appointment of a new chief executive (CEO) and chief financial officer (CFO). Last Friday, the directors announced they were drawing closer to a final decision, and had shortlisted three candidates for the posts. But, despite speculation, the board did not make any appointment announcements today.

Satyam was plunged into a crisis after company founder B. Ramalinga Raju said earlier this month that the company had inflated profits for several years.

Investigators however say that the company may have made profits, but Raju and some other executives allegedly siphoned out the money. They say, for example, that the company had only 40,000 employees, instead of the 53,000 claimed by Satyam, and the salaries of these fictitious staff was siphoned out.

The board however stated last week that allegations that the staff count was increased were untrue. Today the board stated, "further validations have been done relating to the employee numbers of Satyam Computer Services and there are sufficient data points to reinforce the understanding that the earlier reported numbers hold good."

The company also stated that the salaries for January 2009 will be paid, as scheduled and that this would be achieved from its internal accruals / receivables.

Investigators also arrested last week two staff of Price Waterhouse, an Indian unit of PricewaterhouseCoopers in connection with the Satyam case.

In a letter to Satyam, released to the Bombay Stock Exchange, Price Waterhouse has said that its audit opinion should not longer be relied upon, as it was based on financial statements that Ramalinga Raju said were inaccurate for successive years.

In other news, Satyam is turning to YouTube to get its own message across to viewers worldwide in the wake of the financial crisis in the company.

The company has posted videos from members of the company's board, discussing their plans for Satyam.

Satyam has emerged as a key search term on search engines, and Satyam decided to put the videos on YouTube to ensure that its point of view is available to people searching for information on Satyam, a spokeswoman for the company said.

In one video, board member Tarun Das said that he and other board members want to save Satyam as a company, and help it sustain, prosper, and ensure that it is around for a very long time.

In another video, board member Kiran Karnik said that customers want to stay on with Satyam, because of their long relationship with the company, and the quality of work that Satyam has delivered to them.

Now read Satyam fraud scandal timeline