Stunned by the attacks from all sides, Satyam supremo Ramalinga Raju might offer to not to chair the crucial board meeting of the company on December 29 and even step down as the chairman of the company temporarily, highly-placed sources told HNN.
This development comes with pressure mounting on the independent directors to take moral responsibility for the aborted Satyam-Maytas deal that has led the company on a downward spiral. Dean of Indian School of Business (ISB) M Rammohan Rao who chaired the crucial board meeting where the buyout deal was cleared has been 'informally advised' by representatives of the government of Andhra Pradesh to quit the Satyam board. The board meeting on December 29 is to consider the prospects of buyback of shares of the company.
Sources aver that Rammohan Rao may reconsider his earlier decision of continuing on the board of Satyam. When asked by HNN about this, Rao said: "I am not taking any actions at the moment." But significantly he added: "At the next board meeting there will be discussions, clarifications will be sought, then I will take it forward."
Indications are that one of the independent directors, former cabinet secretary T R Prasad might aggressively question the company's management policies at the next board meeting.
Prasad who as Union heavy industry secretary in 1996 crossed swords with Suzuki over the Maruti issue and also worked as chairman of the Maruti Udyog Limited, joined the Satyam board only in April 2007.
Sources say that Prasad would be pushed into taking a more active role in the Satyam's affairs what with the company being looked at closely by the SEBI and the department of company affairs. "Having held the top most civil services position in the country, Prasad is well-placed to guide the company out of trouble at least domestically," a highly-placed source said. In a Christmas gift, Satyam's oldest director Mangalam Srinivasan -who had been on the board of the company since 1991- resigned taking moral responsibility for being part of the aborted deal. Analysts said that it was significant that 70-year-old Srinivasan - an academic in the US - resigned.
"She had been with Ramalinga Raju since Satyam Computers was merely four years old and the company had just got its first contract in USA. Her quitting has been a shocker for the Satyam supremo," an analyst said.
The other independent directors on Satyam's board include father of Pentium Vinod Dham and former director of IIT, Delhi, V S Raju. Sources say that Raju is not likely to quit the board but could not figure out what was on Dham's mind. Vinod Dham came to Satyam's board in January 2003 along with professor of Harvard Business School Krishna Palepu. But as per the definitions of the New York Stock Exchange (NYSE), Palepu does not qualify as an independent director of Satyam. This because, Palepu received compensation -- that is over the threshold level -- from Satyam for consultancy he provided.
Interestingly, it now transpires that Satyam has not met all the corporate governance norms of the NYSE. Specifically, the norms require the independent directors to meet periodically without the management directors and also have a corporate governance committee. But Satyam's nine-member board observed both the norms in breach.
Satyam's other board members include B Rama Raju, the managing director who is Ramalinga Raju's brother and president of Satyam, Ram Mynampati.
Meanwhile, Andhra Pradesh government representatives said that though they had nothing to do with Satyam and its board members, the fact that the company is headquartered in the state and employs over 50,000 people was a matter of interest.
Quit all govt posts, RS MP tells Rammohan
Left MP Abani Roy has demanded the resignation of M Rammohan Rao, member (independent) of the board of Satyam Computer Services, from positions in various government and regulatory committees. Citing media reports, Roy, a Rajya Sabha MP has written a letter to Prime Minister Manmohan Singh saying: "His actions in the boardroom of Satyam further accentuated by his stoic silence on various issues reflect an irresponsible conduct on his part." 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 (RBI), chairman of Securities Exchange Board of India (Sebi) and chairman of the Telecom Regulatory Authority of India (Trai). "I believe unless his position and thereby the role he played as an independent director is cleared he should be immediately relieved of his responsibilities as member of the above selection committees," Roy said. Of two independent directors on Satyam's board, Mangalam Srinivasan has already resigned.
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