Fraud-hit IT giant Satyam Computer's new chief executive has told the company's 50,000 employees he is confident the company "can accomplish the impossible" and get itself back on the rails. "I have no misgivings about the enormity of the task in front of us but together with my colleagues, I am confident we can accomplish the impossible," A.S. Murty said in a Webcast to employees Friday.
Murty, a company veteran, was plucked from the ranks Thursday by the board named by the government after founder and ex-chief executive B. Ramalinga Raju confessed he fiddled the financial books for years. The dramatic declaration in early January by Raju, who now is in jail in the southern city of Hyderabad where Satyam is based, has shaken India's corporate world and left the company struggling to survive.
Murty, an electrical engineer who previously oversaw Satyam's global deliveries, was picked because of his connections to the company's world-wide clients and "clean track record," Indian media reported Saturday. The Indian Express quoted unnamed investigators Saturday as saying the company's accounts had been "managed" and documents hidden for seven years.
It said Raju told investors he decided to confess to the fraud - in which he declared he had faked a non-existent more than one billion dollars on the balance sheet and inflated profits - "to save the situation." Meanwhile, Corporate Affairs Minister Prem Chand Gupta late Friday named Kiran Karnik, a respected former president of the National Association of Software and Services Companies, as Satyam's new board chairman. Karnik was already a director of the blue-ribbon six-man board named by the government to sort out the company's affairs and to reassure clients and investors.
Gupta also said India's Serious Fraud Investigation Office was investigating 325 companies and 25 people linked to Satyam. "They are related to same Satyam and Raju (family) group and the Serious Fraud Investigation Office will look into linkages between all these companies and all these individuals," he said.
The probe is "heading in the right direction," he said, without elaborating. The Indian arm of PricewaterhouseCoopers LLP is among those being investigated, Gupta said. Last month, Indian police detained two Price Waterhouse partners who had audited Satyam's accounts for questioning.