Hyderabad, Dec 08: Facing a severe liquidity crunch as a result of the fraud by its founder B. Ramalinga Raju, Satyam Computers announced it is scouting for a strategic investor. The company also said that it is committed to protect the interests of its staff and customers. "We are looking for a strategic investor for raising liquidity. We have engaged an investment bank to shortlist the prospective investors. We will take a decision on it at the upcoming board meeting on January 10," Satyam interim chief executive Ram Maynampati said at a press conference.
Admitting that the current cash balance was not encouraging, Mynampati said efforts were being made to improve the liquidity position to ensure business continuity.
“Our immediate priority is to ensure that business goes on uninterrupted,” Mynampati told media persons on a day when SEBI sent a team to Hyderabad to initiate a probe into the Rs 8000 cr fraud that shook India Inc. “We will ascertain the facts about this issue and will proceed expeditiously on the same,” he added.
On the question that has kept the investigators and investors perplexed- the whereabouts of Raju - the CEO said that “it is because of some personal reasons that the Chairman is not coming to office. He is in touch with us and I think he is in Hyderabad.”
He also said that he was not related to the promoters of Satyam and that his appointment as interim CEO is legal as it was supported by the other two board members. Following Raju's and managing director B. Rama Raju's resignations Wednesday, and that of four independent directors earlier, the nine-member board now has only three directors, including two independent directors - T.R. Prasad, V.S. Raju and Mynampati.
The CEO said the company was ready to cooperate with all investigating agencies. He also said that Board members were not in the know of the financial transactions that Raju conducted. “We rely on the audit carried out by an extremely reputed audit company and trust its data for coming to conclusions.” He however said they had not verified what process PricewaterhouseCoopers took to certify financial statements and were not yet in touch with PwC over this.
Stating that neither he nor any of the senior executives were aware of the events that unfolded Wednesday, Mynampati said client-servicing would continue with transparency to ensure smooth transition.
"Clients rely on Satyam for mission critical applications. We have reached out to our clients the world over and assured them of maintaining our service support as before," he said.
The company said it would ensure complete transparency; ensure smooth transition of leadership. We are in the process of identifying new candidates for Board, Mynampati said.
The company, which was represented by top seven members of Satyam, presented a united face when it said it will ensure all employees and customers are supported as they had extended their support to the company in this crises. They also pleaded for time saying that it was just 36 hours since the scam to light and they were still grappling with the situation.
“We are reaching out to 50,000 employees, top 100 clients and we are gratified at the response that we have got,” Mynampati said. Top 100 clients account for 80 per cent of Satyam's business, Mynampati added.
Informing that the resignation of CFO V Srinivas had come in only today, Mynampati said they were in the process of verifying financials and liquidity position of the company. An auditor has been appointed to look into the legitimacy and accuracy of the mail sent by Raju. “The CFO will join us next week as he is in a notice period,” he added minutes later.
He also revealed that liquidity was not very encouraging as far as cash-in-hand is concerned.
Tackling a question on payments to clients and employee salaries, Mynampati said that the remuneration for December had been paid out, but the company was low on liquidity and all other payments were being sorted out.
“This is a crisis of unimaginable proportion. We have not faced such a situation in our lifetime. We are verifying the balance sheets and other things. We are trying to come up with an assessment on impact, if any, on our payment dues etc. We are confident we will deal with all obligations…” he said.
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