Satyam’s shares, which rose 6.4% on Thursday to Rs181.70 each, are still sharply off the Rs226.50 a share they had closed at, hours before the 16 December deals were unveiled.
The stock then hit new all-time lows but has been recovering in recent days on hopes that a proposed 10 January board meeting could come up with some face-saving measures.
On Thursday, Satyam insisted that it will continue to “use” the award since an eminent jury judged its entry. “At this point, there is no reason for us not to use the award,” T. Hari, head, global communications at Satyam, told Mint.
The jury that picked Satyam for the award was co-chaired by Ola Ullsten, former prime minister of Sweden, and justice P.N. Bhagwati, former chief justice of India
According to the Golden Peacock Award secretariat, one of the key reasons for Satyam winning was a “list of awards won by the company when they applied for this award”.
Raut added, “The company’s corporate governance structure and risk management processes were found laudable as they had eminent people as independent directors”.
Outsiders can easily get carried away by high profile names on a board and it is a common flaw in several awards given to companies, notes Ganesh Shermon, a partner at the audit and consulting firm KPMG India.
“Sometimes, such awards are more of a function of who is on the board,” says Shermon, who heads the Change and People Advisory Services at KPMG. “Award juries have a tendency to get carried away by well-known personalities who are directors on the board.”
“It is possible that the company was good then (when the award was given), and then the management made a bad decision,” says Manoj K. Arora, a director in the ministry of corporate affairs.
Arora also heads the central government-promoted National Foundation for Corporate Governance, established by his ministry, in partnership with the Confederation of Indian Industry, Institute of Company Secretaries of India, and Institute of Chartered Accountants of India, with the goal of promoting better corporate governance practices in India.
The ministry is awaiting a report by the Registrar of Companies as part of its announced intent to probe Satyam management over its Maytas deals.
The Maytas affair isn’t the first run-in that Satyam appears to have had with governance and business ethics.
The World Bank confirmed in December a media report that first appeared in October noting that the bank had first suspended and then banned Satyam for eight years, ending a high-profile and lucrative $100 million Washington, DC- based project for the company over alleged improper benefits to bank staff as well as lack of proper documentation.
Fox News in the US, which broke the story, has also reported that the US justice and treasury departments were involved in the Satyam-World Bank saga.
Satyam first denied it was banned and has since publicly threatened the Bank, demanding the statement be withdrawn.