HYDERABAD, India (AFP) — Indian authorities Sunday installed three prominent business leaders to run scandal-hit software giant Satyam Computers in an effort to salvage the country's international business image.
The government appointees replaced the company's own interim board of directors who took charge after Satyam founder and chairman B. Ramalinga Raju admitted last week that his company's accounts and assets had been falsified.
The new board would "provide necessary vision and accountable leadership in this hour of crisis to restore credibility, customer confidence and employee morale," company affairs minister P.C. Gupta told reporters.
Raju was arrested late on Friday and is now in jail pending trial after his dramatic confession that profits at the outsourcing giant had been falsely inflated by more than one billion dollars.
Gupta described Satyam as "a company of national and international fame" as he announced the first three new board members.
"It has many professionals on its roll who are amongst the best and the brightest in the world," he said. "It is therefore important to ensure continuity of the company."
Satyam, which has clients in 65 countries and 53,000 staff, has been on the investment list for several top Indian and global mutual funds but its future existence now looks bleak.
Satyam's market capitalisation -- the number of shares multiplied by the market value of the share -- fell from over three billion dollars last month to about 330 million dollars on Friday, two days after the scandal broke.
The Indian government has said the financial mismanagement at Satyam had "resulted in serious damage to the reputation of Indian corporate sector and the regulatory mechanism in the eyes of the world."
The new board members include Deepak Parekh, head of one of India's largest private banks, and Kiran Karnik, former chief of the National Association of Software and Service Companies.
The third member of the new board is C. Achuthan, eminent lawyer and former boss of the Securities and Exchange Board of India, India's market regulator that is probing the billion-dollar scandal.
Karnik told reporters that India had a "phenomenal reputation for world-class corporate governance" but that the country had "to make sure that India continues to be a safe, secure and reliable destination for IT."
Satyam's interim board, which insisted they were unaware of the fraud, had tried to limit the damage of Raju's revelations by pledging to investigate and rectify past mistakes.
In his resignation letter Raju said that heading the company as the deception grew "was like riding a tiger, not knowing how to get off without being eaten."
On Sunday the company's chief financial officer was remanded in custody, while police raided offices at its Hyderabad headquarters and the homes of the disbanded interim board, according to the Press Trust of India.
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