Indian government will not bail out Satyam
Fill in your own accounts hole
The Indian government has ruled out any bailout of struggling outsourcer Satyam.
Ashwani Kumar, minister of state for industry, told The Times of India: "This government is not going to directly or indirectly subsidize wrong-doing and fraud in Satyam."
He said the government would do what it could to save jobs at Satyam, and protect the brand equity of the Indian technology market. Satyam's shares fell about another 30 per cent on the news.
Board member Kiran Karnik also dismissed talk of a government bailout. He said the company remained "a very bankable proposition". Either the firm needs a generous bank to help it out or it may look at being taken over - the firm's shares have collapsed thanks to the ongoing scandals.
However, the government has appointed another three directors to Satyam's board - Tarun Das, of the Confederation of Indian Industry, T N Manoharan, a chartered accountant, and S Balakrishna Mainak of Life Insurance Corp, which is a major investor in the outsourcer.
The company also confirmed late yesterday that it has appointed Deloitte and KPMG to sort out its accounts.
It has also received notice from PricewaterhouseCoopers, its auditor from 2000 until 2008 warning it that, in light of Ramalinga Raju's letter, its previous financial statements should not be relied upon. It has also formally launched a search for a new CEO and CFO. ®