Satyam directors may be banned from serving on other company boards
19 Jan 2009
Satyam directors may be banned from serving other company boards if the government's proposal is accepted by the company law board.
On 9 January, the government had approached the Company Law Board (CLB) calling for all a ban on all former directors of scam-hit Satyam Computers from being allowed to serve as directors on the boards of other companies in India. The ban will be implemented under section 388(1)(a)
The CLB is understood to be waiting for responses to be filed by all nine directors including B Ramalinga Raju, Rama Raju, Ram Mynampati, who were part of the company management and the independent directors that included M Rammohan Rao, dean of Indian School of Business, V K Dham, regarded as the father of Pentium processing, K G Palepu professor, Harvard Business School, Dr Mangalam Srinivasan, who has been associated with University of California and Harward and former cabinet secretary T R Prasad and former Dean of IIT-Delhi.
This posibly explains why some former Satyam directors have started resigning from other company boards.
Prasad has already resigned from the boards of GMR Infra and Taj GVK. Professor Rao stepped down as dean of the Indian School of Business, the BEL board and a government panel, while Dham resigned from Sasken.
Misrepresentation of World ban issue by Satyam management
Another fact that has come to light from a look at the minutes of an audit meeting held on 17 October 2008 is that the management of Satyam gave a contrary picture to its board and auditors on the action taken following the ban imposed by on it by the World Bank.
The company's management had termed the allegations made by the World bank as "rumours and misinterpretation."
In fact, questions on the ban were raised by Vinod Dham. Ram Mynampati who cited Satyam's long-standing service record with the World Bank brushed his concerns aside.
