Bangalore/Hyderabad: Satyam Computer Services Ltd said it would miss a Monday deadline to submit the minutes of its last board meeting where directors discussed an eventually ill-fated management proposal to diversify and buy two infrastructure firms for $1.6 billion (Rs7,664 crore).
Those deals, which were abandoned within 12 hours due to massive investor unrest that has continued to dog the computer services company, have raised many issues of corporate governance, especially in terms of how independent directors agreed to a valuation that would have benefited the family of Satyam chairman B. Ramalinga Raju.
Some directors have also since publicly disputed the company’s account of the deal process, especially in terms of the agreed-upon valuation of the two target companies.
Meanwhile, Satyam has refused to disclose which audit or consulting firm valued the assets of the two firms, Maytas Properties Ltd and Maytas Infra Ltd.
Satyam said on Friday it will ask the Registrar of Companies (RoC) for additional time to submit the minutes of the last board meeting and related documents.
The “29th is too tight a deadline. Because of the activities here, we will seek a few days extension,” said G. Jayaraman, head of corporate governance and Satyam’s company secretary. An official of the registrar’s office in Hyderabad, who didn’t want to be named, said that for a deadline extension to be granted, the company must show “serious” grounds, such as a fire or strike.
Satyam’s delay in filing the minutes of the crucial board meeting with the registrar came on a day when it was confirmed that one independent director, Mangalam Srinivasan, has resigned from the board owning “moral” responsibility for questioning the deal at the board meeting, but not eventually voting against the proposed transaction.
Meanwhile, outside pressure mounted on another Satyam independent director, M. Rammohan Rao, who is also dean of the Indian School of Business in Hyderabad.
Rajya Sabha member of Parliament from the Left’s Revolutionary Socialist Party, Abani Roy, was quoted by PTI as saying Rao should be asked to resign from various government and regulatory committees until he explains his role in approving the Satyam transaction.
PTI said Rao is a member of the appointment and selection committees of various government and regulatory positions such as deputy governor of the Reserve Bank of India, chairman of Securities and Exchange Board of India and chairman of Telecom Regulatory Authority of India.
Rao did not return Mint’s telephone calls on Friday.
The Economic Times and The Times of India had reported news of Srinivasan’s resignation letter in their Friday editions. “Right now, I am not answering any questions”, said Srinivasan, who is in Bangalore, in a phone conversation on Friday.
Srinivasan, a US-based director since 1991, becomes the first director to quit in what has become a closely watched test case for corporate governance and apparent self-dealing in India’s corporate world.
Indeed, while Satyam’s shares rose 0.4% to Rs135.50 a share in Friday’s trading on the Bombay Stock Exchange when the benchmark Sensex index fell 2.5%, they have lost nearly 41% in value since 16 December when the deal was first unveiled.
Satyam’s Jayaraman confirmed that Srinivasan had sent her resignation in an email around 10.45pm on Thursday, and later called to let the company know of her inability to attend a scheduled board meeting on 29 December.
Jayaraman said no other Satyam director has resigned.
The Monday board meeting is scheduled for 4pm at Satyam’s headquarters in Hyderabad, with some independent directors, such as Vinod Dham, who designed the Pentium computer processor, and Krishna G. Palepu, a professor of business administration at Harvard Business School, participating through a video link.
Satyam has said that the board will discuss a proposal to buy back shares, a move to placate irate shareholders.
V.S. Raju, another independent director, said the board also plans to discuss issues from the failed deals proposal and draw lessons from the fiasco. “It is appropriate we discuss what happened, what way we could have taken investors and public into confidence,” he said.
PTI contributed to this story.