Business | General
Indian ministry dissolves Satyam board after fraud
Indian authorities have dissolved the board of embattled outsourcing giant Satyam Computer in the wake of a massive fraud scandal and were working on Saturday to name 10 new directors to lead the company.
- AP
- Published: 11:45 January 10, 2009
New Delhi: Indian authorities have dissolved the board of embattled outsourcing giant Satyam Computer in the wake of a massive fraud scandal and were working on Saturday to name 10 new directors to lead the company.
The Ministry of Corporate Affairs dismissed the board, including the company's interim head, late Friday night, hours after Satyam's founder and former chairman, B. Ramalinga Raju, was arrested for doctoring the company's accounts by $1 billion.
Raju confessed to filling the company's balance sheets with "fictitious" assets and "nonexistent" cash in an extraordinary letter to the company's board on Wednesday.
Raju was arrested along with his brother, former managing director B. Rama Raju, in the southern city of Hyderabad, according to S.S. Yadav, the top police official in Andhra Pradesh state, where the company is headquartered.
Police questioned the brothers throughout the night, according to the Press Trust of India news agency. The brothers resigned from the company on Wednesday.
Yadav said the men were being investigated for cheating, forgery, criminal breach of trust and falsifying documents. They may face up to 10 years in prison, he said.
In a statement announcing the disbanding of the board, Minister for Corporate Affairs Prem Chand Gupta condemned "the greed and misdeeds of a few persons who were at the helm of affairs of the company."
"The current board of Satyam has failed to do what they were supposed to do," he said.
The statement said the central government will appoint 10 people "to function as directors of the company," but no decisions have yet been made.
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