Date:11/01/2009 URL: http://www.thehindubusinessline.com/2009/01/11/stories/2009011150150600.htm

Back Weekly News Round-up

In perhaps one of Corporate India's unfolding worst chapters, Mr B. Ramalinga Raju, Founder-Chairman of the $2-billion Satyam Computer Services, stepped down last Wednesday admitting to faking financial figures of the company to the tune of Rs 7,136 crore, including Rs 5,040 crore of non-existent cash and bank balances.

The disclosure Mr Raju pushed the fourth largest Indian IT company into a crisis, exposing it to acquisitions and leaving the future of 53,000 employees in balance.

Amidst a SEBI probe, seizure of books by Registrar of Companies, quitting of the CFO and law suits in US, a new leadership that emerged at Satyam Computer Services, was left to grapple with the gigantic financial mess.

Even when Mr Ram Mynampati, the interim CEO and his team were trying to grapple with the big financial mess, the Company Law Board later on Friday allowed the Government to effectively take over the management control of the company. It also allowed the Government to appoint 10 nominees to function as Directors of the Hyderabad-based company.

The current Directors of Satyam have also been restrained from acting as its Directors.

Following the CLB order, the board meeting of Satyam scheduled for Saturday stood cancelled. The new board is slated to meet in seven days.

Mr B. Ramalinga Raju, who quit as Chairman of Satyam Computer Services admitting to a Rs 7,136 crore financial fraud, surrendered to the State police here on Friday night.

On the heels of the Centre disbanding the depleted Satyam Board, Mr Raju went in a convoy to the Director-General of Police and presented himself. He was to appear before a special team deputed by the Securities and Exchange Board of India (SEBI) on Saturday, which is probing the fraud.

Following the announcement of liquidity facility for non-banking finance companies in the recent stimulus package, the Union Cabinet on Friday approved Stressed Assets Stabilisation Fund to function as the special purpose vehicle that would provide liquidity support to the order of up to Rs 25,000 crore.

This facility would, however, be available only for non-deposit taking systemically important NBFCs, many of whom are facing liquidity constraints. Also, such NBFCs can use the funds from this facility only for repaying existing liabilities. The Stressed Assets Stabilisation Fund was originally set up to acquire the stressed assets of IDBI.

The Oil Sector Officers' Association, representing 14 oil PSUs, went on a strike from Wednesday and has continued the strike till Friday, as it felt that the recent pay revision announced by the Government did not address their demands in full.

The oil PSU officers called off their indefinite strike on Friday saying it had withdrawn the strike on humanitarian grounds.

The Petroleum Secretary, Mr R.S. Pandey, said a high-level committee had already been constituted to look into their demands.

During the strike period the public was facing difficulty with nearly 30 per cent of petrol pumps across the country went without petrol and diesel.

Daiichi Sankyo on Monday said it will write down a 359.5 billion yen (around $3.84 billion) valuation loss on its acquisition of Ranbaxy Laboratories.

While Daiichi Sankyo had announced in June that it was buying controlling stake at Rs 737 a share, Ranbaxy's shares are currently trading around Rs 250 on the BSE

On a consolidated basis, the Japanese firm plans to post a loss of ?354 billion in the fiscal third quarter through December due to the plunge in share price.

Tata Teleservices on Monday announced its decision to merge its mobile tower company - Wireless Tata Tele Info Services Ltd - with Quippo, a tower firm owned by the SREI Group and Singapore Government.

Post merger, Quippo will have 49 per cent stake in Wireless Tata Tele Info Services, while Tata Teleservices will hold the balance.

Under the terms of the deal, Quippo Telecom will pay Rs 2,400 crore ($ 493 million) to Tata Teleservices and also transfer its existing telecom infrastructure comprising 5,000 towers to the Indian telecom company.

The annual Wholesale Price Index-based inflation rose 5.91 per cent during the week ended December 27, slower than the previous week's annual rise of 6.38 per cent, with the year-on-year inflation rate marking a decline across all the major commodity groups

The stalemate between the government and truckers continued for the sixth day on Saturday despite the arrest of two top leaders of All India Motor Transport Congress.

While Transport Minister Mr T R Baalu had announced to act tough against the truckers, the unrelenting transporters said that 'coercive' measures will not deter them and the strike would continue till the time their demands are fulfilled.

Compiled by M J Madhavan
Podcast by A Srirengarajan