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New Satyam CEO seen as stand-in before sale

New Satyam CEO seen as stand-in before sale
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First Published: Fri, Feb 06 2009. 04 44 PM IST
Updated: Fri, Feb 06 2009. 04 44 PM IST
Bangalore: The professional mission of the new chief executive of Satyam Computer Services is -- to enable ordinary people to perform extraordinary tasks -- and this is the exact quality he requires to ensure the survival of the fraud-tainted outsourcer.
Many analysts see the new chief, AS Murty, a Satyam veteran of 15 years, as a stand-in before the company, snared in India’s biggest corporate scandal, is eventually sold.
Murty, 50, who took charge of Satyam on Friday, was previously in charge of delivery of projects to clients -- and is seen more as a technical and behind-the-scenes expert -- rather than a hands-on executive.
Also Read The Satyam Fiasco (Full Coverage)
He now has the unenviable task of restoring the confidence of Satyam’s 600-plus clients and about 50,000 employees but it is not clear if he will play a key role in any sale process, most likely to be orchestrated by the government.
“It’s clearly an interim arrangement before a buyer comes in and puts in place his own management team,” said RK Gupta, managing director of New Delhi-based Taurus Asset Management, which still holds Satyam shares. “It’s a very, very challenging job and no outsider would have accepted the offer given the kind of uncertainties that are there in the company,” he said.
Prior to becoming the chief executive, Murty was Satyam’s chief delivery officer and had also worked as human resources head. He joined Satyam in January 1994 after a long stint at top software exporter Tata Consultancy Services.
Based in Hyderabad, Satyam, a provider of software and back-office outsourcing services, has been battling to survive since founder and chairman Ramalinga Raju resigned last month after disclosing profits had been overstated for years.
Murty, who has worked in the technology industry for nearly three decades, has his task cut out. “I have no misgivings about the enormity of the task in front of us, but together with my colleagues, I am confident we can accomplish the impossible,” he said in a statement after he was named the CEO.
Down but not out
Shares in Satyam, whose market value has plunged to less than $700 million from $7 billion in May 2008, rose as much as 7% on Friday on hopes the new CEO would be able to keep its client base intact, but later trimmed gains.
National Australia Bank , Australia’s largest lender, said on Thursday it would suspend new contracts given to Satyam.
Last month, Satyam said US-based State Farm Automobile Insurance had terminated its outsourcing contract.
“It is true that we have suffered a blow. The company is down but not out,” Murty said in his first address to staff as CEO.
Clients and investors are also on the lookout for any update on a likely sale of the company, which may result in more changes in senior management. “From the customer perspective, I think the bigger issue is who will buy them and what happens after that, than who has become the CEO,” said Sudin Apte, country head of market research firm Forrester.
An electric engineer by qualification, Murty, better known as ASM by his colleagues and a little-known figure in the industry, is married and has two children.
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First Published: Fri, Feb 06 2009. 04 44 PM IST
More Topics: Satyam | AS Murty | CEO | Fraud | Investigation |