Satyam Management Plans to Stay, Unveils Crisis Plan

Satyam (SAY) on Thursday said its top management team is staying despite the revelation that founder and chairman Ramalinga Raju cooked the books.

In a statement, Satyam followed up on a day that included a stunning letter from Raju revealing a $1 billion cash sink hole and other fraudulent acts.

The company said:

Ten of the most senior executives of Satyam, including interim CEO Mr. Ram Mynampati, gathered at its headquarters in Hyderabad, have collectively committed not to resign from the company which has approximately 53,000 associates. Approximately 40 other top managers from various geographical regions - known as the “Leadership Council” - have also given their commitment to remain in the company.

The goal of this band of 10 is to navigate Satyam through the crisis and keep customers. The pledges to stay on board from top management are designed to “assuage concerns of various stakeholders in a highly fluid and challenging situation.”

It remains to be seen if the current management team can keep customers. The executives sticking around include: Ram Mynampati, interim CEO; Subu D. Subramanian, Head, Manufacturing & Automotive; T.R. Anand, Head of Telecommunications, Infrastructure, Media & Entertainment and Semiconductors; Keshab Panda, Head, Europe, Energy & Utilities; Virender Aggarwal, Head of Asia Pacific, India, Middle East, Africa; Manish Mehta, Head, SAP & Testing Practices; A.S. Murthy, Head, Global Delivery and Global Leadership Development; Murali Venkataramani, Head, Commercial; Hari Thalapalli, Head of Marketing; and S.V. Krishnan, Head of Human Resources.

Satyam held a press conference on its plan to navigate the fraud fallout:

In a nutshell, Satyam management’s plan is to:

• Create a task force to keep the business running;
• Reach out to customers to assure them that Satyam will meet its business commitments;
• Assure employees;
• “Ascertain Satyam’s liquidity position’;
• And strengthen corporate governance.

Comments

[Thomas Victor:]

The strange thing is that the CEO did not STEAL the money.

At times when profit growth was 2% he reported 30-40% profit growth allegedly to keep the stock price up so that Satyam wouldn't be the target of hostile takeovers. So the cash reserves just weren't there in the first place.

He did not sell any shares to take advantage of the inflated share price. In fact to keep the operation running he took out huge loans using more than half of his 8% of Satyam shares as collateral. A lot of those shares were sold by the institutions that gave him loans and now he maybe has only 3% of Satyam shares.

Very puzzling..

Jan 08 01:26 PM

[notsosmart:]

how smart could top management be not to see this over the time period.seems to me see no evil,hear no evil,etc.the accounting firm must be scrambling as the usual excuses are becoming old hat.

Jan 09 02:14 PM

[HaavBline:]

Raju was not just a CEO, he was a founder and chairman, Satyam was his baby. The only huge success among his several business ventures.
I think a lot of family fortunes from Raju clan also invested in the company, previously a family clan hero for making it big and bring pride and fortune to the clan, Raju may have been consumed by the fear of lost face within the Raju family.

Jan 10 01:24 AM