Page last updated at 16:48 GMT, Wednesday, 14 January 2009

Satyam board looks to raise cash


Putting Satyam 'back in business'

A senior Indian banker newly appointed to the board of fraud-hit Satyam Computers has said that the firm will try to borrow money from banks.

The money is needed to continue trading and pay salaries after it was discovered that 94% of the money on Satyam's books was made up.

"We will try to raise money through some banks," Deepak Parekh said.

"The fixed assets are absolutely clear", he told the BBC, adding Satyam had "no bank deposits but small debt".

Mr Parekh is part of a three-man board appointed by the Indian government in the wake of the Satyam scandal.

He said the government was looking to expand the board to four or five members.

'Hard work'

Meanwhile, the hunt for a new chief executive and chief financial officer was continuing at speed, he said.

"We are trying our best to see how we can be back in business," said Mr Parekh, who is chairman of HDFC bank.

"It requires a lot of hard work, of additional funding to make salary payments, and we hope we are able to do it.

"But the first step is to restate the accounts."

New auditors

Meanwhile, Satyam's new board has named KPMG and Deloitte as new auditors to replace former incumbent PricewaterhouseCoopers (PWC), which is assisting investigators.

Satyam's founder and chairman, Ramalinga Raju, stepped down last week and admitted the company's profits had been falsely inflated for years.

Mr Raju, his brother and the company's former chief financial officer are being held in custody.

Resignation letter

PWC has said it is assisting agencies investigating Satyam.

On Wednesday it said its opinions on the company's financial statement may be rendered "inaccurate and unreliable", given the recent revelations.

PWC said Mr Raju's resignation letter, which included revelations of overstated profits, could have a material effect on the veracity of Satyam's financial statements presented to it.

"Consequently, our opinions on the financial statements may be rendered inaccurate and unreliable," PWC said.

The letter from PWC to Satyam's new board was released by the Mumbai stock exchange on Wednesday.

On Tuesday, the Indian government said the Satyam scandal would be investigated by a federal office dealing with serious corporate fraud.

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