Satyam looks for new management

Satyam is open to merger offers

Indian outsourcer Satyam is on the hunt for a new chief executive and chief financial officer after its former management committed one of the largest accounting frauds since Enron.

The company's chairman, Ramalinga Raju, resigned last Wednesday after admitting that he had inflated Satyam's profits by 50.4bn rupees (£682m) over the past seven years.

A new board of directors has been appointed by Satyam in a bid to boost confidence in the supplier.

The members include Deepak Parekh, chairman of India's HDFC Bank, Kiran Karnik, former president of Nasscom, and C.Achuthan, director at India's National Stock Exchange and former member of the Securities and Exchange Board of India.

More members of the board will be appointed by the government before the new management positions are chosen.

But the current board said today that it has no candidates in mind for the vacant Satyam roles yet.

The board's top priority is to restore customer confidence, although it recognised that it may have to ask clients to pay early. The firm claimed that it was "always open" to the possibility of a merger.

Meanwhile Raju, his brother and Satyam co-founder Rama Raju, and chief financial officer Srinivas Vadlamani, are in jail in Hyderabad awaiting trial. They could face life in prison.

According to reports, Vadlamani claimed that the firm's auditors, PricewaterhouseCoopers, did not point out any deficiencies in the financial reports and that he acted on the instruction of Raju not to look into bank deposits.

Satyam said that it will respond shortly to Vadlamani's statements. The board said that Satyam's shareholders will make a decision on PricewaterhouseCoopers at its next meeting.

The board promised an update on the situation in the next 10 to 14 days.