Satyam fights for survival

India-based Satyam, which, amongst other technology areas, provides mission critical and business continuity services globally, has been plunged into an accounting scandal after admissions by founder and chairman Mr. Ramalinga Raju that the company had inflated its cash and bank balances on the balance sheet by more than $1 billion over the past several years.

Satyam has issued the following statement with regards to the situation and its attempts to continue business-as-usual. (Published verbatim):

Satyam's top leaders announce action plan focusing on business continuity, corporate transparency and leadership transition for board and management

The top leaders of Satyam Computer Services Limited (NYSE:SAY) have launched an immediate action plan to ensure business continuity and leadership transition even as it initiates efforts to ascertain its liquidity position and verify allegations by its founder and chairman Mr. Ramalinga Raju of financial irregularities.

Satyam's leaders announced at a press conference at the IT services company's headquarters in Hyderabad that the Company has started to actively reach out to customers globally and has been heartened to receive strong expressions of confidence and support from customers.

At the same time, the leaders of Satyam steering the organization through the crisis, and approximately 40 top managers representing the Leadership Council from various geographical regions have pledged their commitment to remain in the company. The leadership team is headed by interim CEO Mr. Ram Mynampati.

At a press conference chaired by Mr. Mynampati, the company announced several immediate actions already carried out or being undertaken by the leaders.

- Formulation of a Task Force to address all ongoing operational issues to ensure business continuity, including maintaining customer confidence.

- An immediate customer outreach by all geographical regions to assure clients that Satyam will meet all its business commitments. "Many clients rely on Satyam for mission-critical functions and collaborate closely with our team. While we have to address various customer concerns, we have been heartened by expressions of confidence and support from various clients," said Mr. Mynampati. Satyam's top 100
customers account for 85% of total revenue and have had relationships with the company ranging from four to ten years.

- Assurances to the approximately 53,000 associates from leaders and line managers that the company places top priority in protecting the careers and livelihood of employees and their families. "We share the pain and grief being felt by all associates and their families and will do our utmost to ensure that salaries can be paid," Mr. Mynmapati said. "We are extremely touched by the outpouring of support from associates."

- Begun a process to ascertain Satyam's financial liquidity position and verify allegations by the Chairman. An independent audit is being contemplated.

- As part of efforts to strengthen corporate governance, leaders have accorded top priority to addressing various legal issues which are expected to unfold; and have written to the regulatory authorities and various industry associations for assistance to identify candidates to be new members of Satyam's board.

The immediate action plans announced were collectively decided based on an initial assessment of the key challenges faced. These actions will be reviewed by the leadership team on a daily basis for the next few months.

"The leadership team comprises highly experienced veterans with cross-functional responsibilities across geographical regions. They have also been mandated with additional tasks of great urgency including collection of accounts receivable, cost containment as well as customer and associate retention," said Mr. Mynampati. "At the onset we wish to stress that the leaders have offered themselves to steer the organization through the current crisis.

www.satyam.com

•Date:9th January 2009• Region: Asia/World •Type: Article •Topic: BC markets
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