New Delhi: Chairman of India’s Company Law Board (CLB) S. Balasubramanian on Wednesday said he was satisfied with the way the board tackled the crisis at fraud-hit Satyam Computer Services Ltd and appreciated the government’s prompt action on the matter.
“Satyam is a unique case because the magnitude of fraudulent activities and (the) remedial action is unprecedented in the 18-year history of CLB,” Balasubramanian said in an interview. CLB is a semi-judicial regulatory body overseeing corporate affairs.
He said the Indian system stood up well to deal with a case of such huge proportions and wide ramifications.
Satyam founder B. Ramalinga Raju confessed to India’s largest accounting fraud of Rs7,163 crore on 7 January. The Central Bureau of Investigation on 7 April pressed charges against Raju and several executives of Satyam and two executives of Price Waterhouse, the company’s auditors.
“The need for quick and positive action was particularly significant in a case involving public interest at large to project that the regulatory and judicial mechanism can stand up to any exigency,” he said.
Balasubramanian also expressed his faith in the ability of Tech Mahindra Ltd to help Satyam recover its “lost glory” within the next six-eight months. Tech Mahindra said on 13 April it would pay more than $550 million (Rs2,761 crore) for a controlling stake in Satyam.
“I am confident of Tech Mahindra’s expertise and ability in running Satyam efficiently. Even with the tremendous uncertainties involved the company has chosen to invest about Rs3,000 crore in Satyam. This shows their faith in their own abilities.”
Tech Mahindra, a venture of auto maker Mahindra and Mahindra Ltd and BT Group Plc., would make an open offer to acquire shares adding up to a further 20% stake in Satyam from the company’s public shareholders. If it isn’t successful in this, Satyam will issue it fresh shares to make sure it ends up with a stake of 51%.