The Company Law Board on Friday allowed the Government to effectively take over the management control of the beleaguered Satyam Computer Services, following the Rs 7,000-crore financial fraud that shook corporate India.
It also allowed the Government to appoint 10 nominees to function as Directors of the Hyderabad-based company.
The current Directors of Satyam have also been restrained from acting as its Directors. Following the CLB order, the board meeting of Satyam scheduled for Saturday now stands cancelled. The new board is slated to meet in seven days.
Earlier in the day, the Government had moved the CLB to ensure that the operations of the company continued uninterrupted and also to protect the credibility of the Indian corporate sector in general and IT sector, in particular.
The Government’s crackdown on the crisis-ridden company and its move to disband the board also puts a question mark over Satyam’s Q3 results announcement and restatement of Q2 figures, earlier scheduled for January 17; it now needs to be seen if the company would be able to announce these numbers even by January 30.
Briefing the media late in the evening, the Minister for Corporate Affairs, Mr Prem Chand Gupta, said, “We will appoint suitable persons for the post of nominee Directors, at the earliest.”
The Minister also said that the Centre would wait for a report from the Registrar of Companies (Hyderabad), which is probing the financial irregularities. “The RoC has been asked to submit its report by January 14, after which it will be decided whether to refer it to the Serious Fraud Investigation Office,” Mr Gupta added.
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