The Satyam Saga: Bitter-sweet developments for Satyam Employees

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The latest news in the three week long ordeal that Satyam employees have had to deal with brings some good news while apprehensions about the future continue to hold sway.

The government appointed board has announced that the company is on its way to picking up the pieces following the fallout of the revelation of the fraud that former chairman R. Raju and his confederates committed. It said that the company has enough capital, on account of its receivables and internal accruals, to pay the salaries of employees for the month of January. T N Manoharan, one of the board members, told the media on Tuesday that the company did not have to sell off its assets in order to pay the salaries.

The board also announced that it had appointed a management adviser and two investment bankers to take things back on track. It has appointed Boston Consulting Group as management adviser to support the directors and leadership team. The company also appointed Goldman Sachs and Avendus as investment bankers, which will advise future strategic options that will include identifying strategic investors, obtaining Expressions of Interest.

Following these announcements, Satyam witnessed an almost 17% increase in its shares the following day. Satyam shares on both Indian stock markets, the NSE and the BSE, witnessed an almost equal amount of increase with 16.93% and 16.96% rise respectively.

The employees of the company are still not amused, though. In a recent report in a prominent private newspaper, as many as 15,000 employees of the beleaguered IT Company have the added worry of the fate of their bond money. Satyam requires its employees to deposit Rs. 2 Lakhs for the first two years, keeping with the industry tradition of having employees deposit bond money till a particular time of employment. It returns the money after the two years but the money gets forfeited to Satyam in case the employee terminates his employment with the company. Employees now are worried that this money might be affected as the company finds itself in a turbulent phase. Some employees have shot off mails to the State Bank of India, where the money is deposited. SBI, in its reply, has assured the employees that their money was safe and would be released when the management directs it to.

Also, the American market regulator Security and Exchange Commission said that it had not yet deliberated on any action against Satyam Computers but added that it will adopt appropriate regulatory measures to protect investors.

In developments surrounding the investigations, the court has denied the Raju brothers bail once again and the Andhra government, faced by accusation of inhibiting agencies in their investigation process, has written to the Prime Minister stating that it would even have the CBI investigate the case, should the Centre deem it necessary. Investigations have also revealed that the former chairman of the company had created a network of as many as 300 companies to divert siphoned money to. Union Minister for Corporate Affairs, P C Gupta added that the network was complex but carefully planned. He also said that there was a probability that other people might be involved in the scam but added that the entire debacle seems to be revolving primarily around the Raju families.