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Page last updated at 11:35 GMT, Friday, 16 January 2009

Satyam chief's custody extended

Satyam chairman Ramalinga Raju
Mr Raju has said profits have been falsely inflated for years

A court in India has extended the custody of the chairman of fraud-hit Satyam Computers, Ramalinga Raju.

It will hear a bail plea on Monday along with a request by market regulators to interrogate him.

Separately, the company said in a statement that it was "cooperating fully" with the authorities with investigations into the fraud.

The newly appointed board of directors will meet on Saturday to discuss ways to raise funds for the company.

Mr Raju stepped down last week after admitting to years of accounting malpractices.

He said the company's profits had been falsely inflated for years and that 94% of the money on Satyam's books was made up.

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

Mr Raju's lawyer Bharat Kumar said judicial custody had been extended to Monday, along with bail pleas.

The court in Hyderabad will then hear a Securities and Exchange Board of India petition that it should be allowed to question Mr Raju.

Hearings on whether Mr Raju's custody should be handed over to the police will continue over the weekend.

'Malicious'

Satyam said in a statement that it was cooperating with the authorities.

By and large major customers are willing to remain with the company
PC Gupta,
corporate affairs minister

"Satyam flatly denies malicious media reports that suggest executives... left the country to avoid interacting with investigating authorities," the company said.

"These executives are currently meeting with customers in their regions to personally assure them of our ongoing commitment and the company had received many expressions of confidence and support from its clients," the statement said.

Shares in the company were up 28.3% at noon on Friday following a statement by the federal corporate affairs minister PC Gupta that the company's operations were "sound".

"By and large major customers are willing to remain with the company," he said.

The minister named an additional three new members to the company's board, taking the number of new appointees to six.

The new members include Tarun Das, chief mentor of India's leading group of businessmen, the Confederation of Indian Industry.

"There's no doubt the government wants to keep the company operational," one analyst told the AFP news agency.

Satyam shares plunged more than 80% following Mr Raju's confession of fraud last week.

On Wednesday, board chairman Deepak Parekh said the firm would approach banks to raise funds for the company.

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