|
Thursday January 15, 10:10 AM
|
|
Director says Satyam viable, no govt bailout plan - report
MUMBAI (Reuters) - Fraud-scarred Satyam Computer Services (SATYAM.BO : 90.55 -2.2
) is a financially viable company and there is no plan for a government bailout, the Times of India newspaper said on Thursday, quoting a newly appointed director.
"Taking money from the government will send a wrong signal," Kiran Karnik told the paper, amid speculation that the state will have to step in to rescue the firm.
The Times of India said raising funds from equity partners and banks was the top priority of the new board to meet working capital and to pay salaries to staff.
Karnik is one of three board members appointed by the government on Sunday after Satyam's chairman last week revealed India's biggest ever corporate scandal, threatening the firm's survival.
Satyam has a 53,000-strong workforce and counts Nestle and General Electric among its clients.
Karnik, a former head of Indian lobby group National Association of Software and Services Companies, told the Times of India the company was a "very viable organisation" and would make a profit in a few months.
"Our only concern is to keep the show and hold on to the clients and the workers," he said.
Satyam appointed two new audit firms on Wednesday to examine the extent of the fraud, determine how much cash it has on hand and restate its results.
Local media have estimated the government would have to pump up to 20 billion rupees ($410 million) into the company to keep it afloat and reassure its nervous clients and employees.
India's prime minister met key ministers on Tuesday to discuss Satyam, and corporate affairs minister PC Gupta later said "different possibilities" were being examined.
The three-member board was working towards making Satyam financially viable before considering any sale or merger, the paper said.
Satyam's founder and chairman Ramalinga Raju quit last week after confessing the company's profits had been falsely inflated for years.
Raju, 54, his brother and the company's former chief financial officer have been charged and are in jail in Hyderabad, where Satyam's headquarters is located.
The scandal has hit Indian stocks and the currency, as investors worried over the damage to foreign investment in Asia's third-largest economy and the once-booming outsourcing sector.
Satyam's stock market value has dived to less than $450 million from more than $7 billion six months ago.
(For full coverage on Satyam click http://in.reuters.com/news/globalcoverage/satyamstory)
(For Quotes and Interactive Charts of Satyam Computer Services click http://in.reuters.com/money/quotes/chart?symbol=SATY.BO)
