Date:13/01/2009 URL: http://www.thehindu.com/2009/01/13/stories/2009011355691200.htm

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Manmohan reviews Satyam fallout

Ashok Dasgupta

NEW DELHI: Prime Minister Manmohan Singh on Monday directed Cabinet Secretary K.M. Chandrasekhar to “coordinate the approach of the government” on the Satyam issue, following the revelation of a Rs. 7,100-crore accounting fraud by the IT major’s erstwhile chairman B. Ramalinga Raju.

Dr. Singh reviewed the “developments” with SEBI chairman C.B. Bhave and senior Finance Ministry officials on the “further steps” that need to be taken. “The Prime Minister is closely following the developments,” PMO sources said.

Top industry leaders also met the Prime Minister and discussed the fall-out that the corporate fraud would have on the global image of India Inc. The former CII president, R. Seshsayee, CII’s chief mentor Tarun Das and Gujarat Ambuja chairman Suresh Neotia were among the small group of industrialists who met Dr. Singh.

The current crisis appears to be worse confounded following the World Bank initiative against five Indian entities, including Wipro Technologies, for violating the multilateral institution’s guidelines on checking fraud and corruption.

In a quick move to salvage the image of Indian industry, the CII has set up a special task force on corporate governance to be headed by Naresh Chandra, former Cabinet Secretary and India’s ambassador to the U.S.

In a statement here, it said: “The issue of corporate governance was discussed in great detail in the context of the events at Satyam.”

The task force, it said, would look into the issues emerging out of the Satyam crisis and make its recommendations.

Earlier during the day, Corporate Affairs Minister Prem Chand Gupta pointed out that the Government did not see any conflict of interest in HDFC Chairman Deepak Parekh and former Nasscom President Kiran Karnik being on the Satyam board even as they are directors on the board of competitors of the troubled IT major. -- being on the troubled company’s board. “There is no conflict of interest,” Mr Gupta told newspersons hen asked whether there could be a clash of interest in Mr Parekh joining the Satyam board as he is also a board member of Emergency Management and Research Institute (EMRI), a company promoted by Mr Raju. Mr Karnik is also a director on the board of EXL Services, a BPO unit having direct competition with the Satyam BPO. Similarly, Mr Parekh is on the board of WNS Global Services, another rival of Satyam BPO.