BANGALORE, 27 JANUARY 2009 - Indian outsourcer Satyam Computer Services is turning to YouTube to get its own message across to viewers worldwide in the wake of the financial crisis in the company.
The company has posted videos from members of the company's board, discussing their plans for Satyam.
Satyam has emerged as a key search term on search engines, and Satyam decided to put the videos on YouTube to ensure that its point of view is available to people searching for information on Satyam, a spokeswoman for the company said.
In one video, board member Tarun Das said that he and other board members want to save Satyam as a company, and help it sustain, prosper, and ensure that it is around for a very long time.
Satyam's customers are concerned about the liquidity crisis at the company, and would also like to see a new management in place at the company, analysts said.
State Farm Insurance in the US had terminated its technology outsourcing contract with the company, and some others are looking for alternatives among other Indian outsourcers, these analysts said.
The company however got a shot in the arm last week when General Electric said it had not plans to move work from Satyam "at this point".
In another video, board member Kiran Karnik said that customers want to stay on with Satyam, because of their long relationship with the company, and the quality of work that Satyam has delivered to them.
The company's new board is meeting for the fourth time on Tuesday, and is expected to outline plans to tide over the liquidity crisis in the company, and also appoint a CEO.
Satyam was plunged into a crisis after company founder B. Ramalinga Raju said earlier this month that the company had inflated profits for several years.
Investigators however say that the company may had made profits, but Raju and some other executives allegedly siphoned out the money. They claim for example that the company had only 40,000 employees, instead of the 53,000 claimed by Satyam, and the salaries of these fictitious staff was siphoned out.
The board however stated last week that the allegation that the staff count was increased was prima facie untrue. An independent investigation is expected to reaffirm the fact in the coming weeks, the board said.
The six-member board has been appointed by the Indian government, after superseding Satyam's previous board.
Investigators also arrested last week two staff of Price Waterhouse, an Indian unit of PricewaterhouseCoopers in connection with the Satyam case.
In a letter to Satyam, released to the Bombay Stock Exchange, Price Waterhouse has said that its audit opinion should not longer be relied upon, as it was based on financial statements that Ramalinga Raju said were inaccurate for successive years.
The board of Satyam Computer Services has hired two accounting firms, KPMG and Deloitte Touche Tohmatsu, to restate the accounts of the scandal-ridden company.
Satyam appoints management advisor, investment banks
The board of Satyam Computer Services has appointed The Boston Consulting Group as management advisor, and Goldman Sachs and Avendus, an Indian investment bank, as investment bankers to advise the company on various strategic options, including bringing in a large investor in the company.
The board said in a statement late Tuesday that it had received proposals from companies and private equity firms, some of which are interested in Satyam as one integrated entity, while others are keen on "portions" of Satyam's business.
A sale of parts of Satyam was not an option being evaluated currently as it was against the mandate of the Indian government, which is regulating the affairs of Satyam, the board added.
The six-member board has been appointed by the Indian government, after superseding Satyam's previous board.
Satyam slipped into crisis earlier this month after the company's founder, B. Ramalinga Raju, stated that the company had inflated profit for several years.
An immediate concern for the new board appointed by the Indian government was to ensure that there was sufficient liquidity in the company to run its operations. The board said on Tuesday that salaries of staff for January would be paid from internal accruals and receivables.
The board also said Tuesday that it had concluded most of the discussions relating to the financing requirements of the company. These funds will help tide over the immediate, compelling operational expenses, it said.
The board has also contested the claims of police investigators that Raju and some other executives had overstated the number of employees at the company. A prosecutor told a court last week that Satyam had only 40,000 employees, instead of the 53,000 claimed by the company, and the salaries of the fictitious staff were siphoned out. Investigators say that the company may have made profits, but Raju and some other executives allegedly siphoned out the money.
An Indian engineering and construction company, Larsen & Toubro (L&T), meanwhile increased its stake last week in Satyam from 4 percent to 12 percent, by purchase of shares in the open market. The move by L&T, which has not discussed its plans, has triggered speculation that it may be preparing to take over Satyam.
Distancing itself from L&T's moves, the board said on Tuesday it will work out appropriate, fair and transparent measures for open bids from investors, in consultation with the Securities and Exchange Board of India and the Indian government.
The board said last week that a new CEO and chief financial officer for the company would be announced this week.
