Corporate Sector

Raju became incommunicado after sending a letter to Satyam board Wednesday morning. There was utter confusion after a TV channel reported that he had left either for the US or Dubai.

Raju is believed to have met nobody in the last two days. It is also possible that he might have handed over his letter to company officials before becoming incommunicado.

Sources in Satyam, however, said he was in Hyderabad and might address a press conference later in the day. The reporters who rushed to his house in upmarket Jubliee Hills were told by the security guards that he was attending a meeting in Satyam Infocity at Madhapur.

However, no senior official from Satyam could be reached to confirm this. A large group of reporters waited outside Satyam Infocity till late Wednesday but in vain.

The Hyderabad police were also reportedly trying to find the whereabouts of Raju. The Andhra Pradesh government has ordered a probe by crime branch. Police Commissioner B. Prasada Rao Wednesday said they would act only if a shareholder or regulator lodges a complaint against Raju.

Some police teams were also sent to Satyam offices in the city to find Raju's whereabouts but they were unsuccessful in tracing him as well.

FIFA monitoring Satyam developments

New Delhi: World football body FIFA, which had signed up troubled Indian software giant Satyam as its information technology partner for the 2010 and 2014 World Cups, said Thursday that it was closely monitoring the developments and studying the extent of the fraud by the company.

Satyam's co-founder and chairman B. Ramalinga Raju resigned Wednesday after confessing to a $1.4 billion fraud that had been going on for years.

"FIFA is monitoring the situation related to Satyam, a company which provides services of technical support to FIFA. At this stage and until we have more information, it is too early for FIFA to make any further comments on the matter," a FIFA spokesperson told IANS.

The Hyderabad-based Satyam was the first Indian company to sign up as a FIFA World Cup sponsor in 2007 and the deal was reportedly estimated around $200 million. According to the agreement, Satyam bagged the global rights for 2010 World Cup in South Africa, the 2014 World Cup in Brazil and the two FIFA Confederations Cups during the 2007-2014 period.

Satyam was in charge of developing the core IT event management system for FIFA and is also its IT services partner for accommodation and hospitality as well as for local organising committees during the seven years.

The IT event management is said to have 14 pieces. Key to the whole system is the accreditation component. The event management system also handles ticketing, results, FIFA's live feeds, as well as FIFA's website.

In addition to this, there are transport, protocol and volunteer management systems. The volunteer management system is designed to help coordinate over 50,000 volunteers that will be aiding in the event. There will also be an IT help desk, designed for the volunteers and Satyam Technical people, manning systems in the nine stadiums.

Satyam was the fourth company after Anheuser-Busch, McDonald's and MTN to join the proposed six-member FIFA World Cup Sponsor line-up.

But now the company is in deep trouble after Raju confessed to the fraud and he may face up to seven years' imprisonment if proven guilty, legal experts said.

He could face prosecution under the Indian Penal Code, Companies Act, IT Act, SEBI Act and even Foreign exchange Management Act.

The company has now formed a crack team to run the day-to-day operations.

Satyam fraud jeopardises its projects in Andhra Pradesh

Maytas Infra, the company promoted by Satyam chairman Ramalinga Raju's son B. Teja Raju, was awarded the Rs122-billion (Rs12,200 crore or $2.5 billion) Hyderabad Metro Rail and the Rs16-billion (Rs1,600-crore or $330 million) Machilipatnam Deep Water Port projects by the state government.

Post-scam, the government will likely terminate both the contracts and invite fresh bids, government officials said.

Other projects awarded to Maytas may also come under scrutiny. For instance, a Rs8.1-billion sub-contract in a Rs33.75-billion project to bring Godavari river water to Hyderabad.

Ramalinga Raju Wednesday quit as Satyam chairman after admitting to cooking up accounts, which shocked corporate India and crashed the company's stock value.

The crisis was triggered by Satyam's Dec 16 decision to acquire Maytas Properties and Maytas Infra for $1.6 billon (Rs79.2 billion or Rs7,920 crore). The next day, Satyam called off the deal after institutional investors revolted, saying it amounted to dipping into Satyam's cash reserves to bail out the cash-starved Maytas firms.

After Raju's admission, the state government asked Chief Secretary P. Ramakanth Reddy to look into Maytas' financial position and ascertain if it was in a position to execute the projects.

Incidentally, Chief Minister Y.S. Rajasekhara Reddy had earlier said the developments surrounding Satyam would have no impact on the two projects as Maytas was a separate entity.

Maytas, which is Satyam spelt in the reverse, is also executing several packages in major irrigation projects worth Rs14 billion. The infrastructure company is also building at least three IT Special Economic Zones (SEZs) and integrated townships in Hyderabad.

Government officials said it would not be difficult to terminate the Metro Rail project as no land has been transferred to the company. Under the concession agreement signed last year, the government promised to allot 296 acres of prime land to the Maytas-led consortium for commercial exploitation.

In a move that raised many eyebrows, especially among international bidders, Maytas also declined to take a single penny from the government though the latter offered Rs23.63 billion or 20 percent of the project cost under Viability Gap Funding (VGF) scheme. The firm also promised to pay Rs303.11 billion over the concession period of 35 years, and paid Rs110 million as advance.

The deal had come under criticism from E. Sreedharan, managing director of Delhi Metro Rail Corp.

Sreedharan, who served as a consultant to the Hyderabad Metro project, has said providing "296 acres of prime land to BOT developer for commercial exploitation was like selling the family silver", and felt the land concession could lead to a "big political scandal some time later".

Taking strong objection to Sreedharan's comments, the Congress government in the state had asked him to apologise or face defamation charges.

The botched attempt by Satyam last month to acquire Maytas Infra triggered speculations that the move was aimed at infusing capital in Maytas as it was not in a position to mobilise funds for the project.

For the Machilipatnam port project, the state government has already transferred 412 acres of the land to Maytas. The company has been promised 6,262 acres for the project, the foundation stone of which was scheduled to be laid in April.

Beleaguered Satyam forms crack team for fire-fighting

"The SWAT team represents all customer facing units, key horizontal competency units and critical support units. The team, consisting of many Satyam veterans of 10-20 years' experience in the company, has committed to work together to make it happen. They have the final call on most customer related matters," Mynampti said.

A Satyam spokesperson told IANS that the acronym SWAT was used by the interim CEO to convey that a crack team similar to the elite tactical unit in American police departments has been formed for fire-fighting operations in the company.

Briefing the staff about the critical changes at the board and leadership levels in the light of two promoter directors resigning, the interim CEO said the current quarter (January-March) would be a tumultuous one, as rumours would abound and competition would try and leverage it to their advantage.

"As a proactive measure, we have formed empowered cross-functional teams, headed by leaders in the respective areas, to address pan-organisational issues like delivery excellence, customer and associate retention, pipeline management, cost controls, collections," Mynampati said.

He said the SWAT team would meet customers in person over the next two weeks as well as onsite employees to explain what happened and the actions being taken to retain their confidence in the company.

The developments led to the resignation of four independent directors last month after the company?s aborted bid Dec 16 to acquire Maytas Properties and Maytas Infra, the two realty firms run by Raju?s two sons, for $1.6 billion (Rs.79.2 billion/Rs.7,920 crore).

"What we are confronted with is the challenge of continuing our business operations, seamlessly. We will need your involvement and ideas to make it happen. This might involve even more effort at every level, in the near term. This is the time to prove to the world that we are united and will succeed in overcoming the challenges," the letter said.

"I am confident that I can count on your continued support as I commit to our customers that we will ensure deliverables and commitments are serviced," Mynampati said.

Referring to customer assets, service offerings, delivery processes and scalable support systems built by the company over the last 21 years, he said Satyam was acknowledged for its leadership bandwidth and had demonstrated reputation for collaborative functioning.

"This is the time when we have to apply it in real life. What we have been trained for, we will now put to work. Let us continue to handle our respective areas with total autonomy, freedom and control," he averred.

Ironically, on a day when the two promoter executive directors resigned and the company?s stock was battered on the bourses, Mynapati recalled that the company was acknowledged as being amongst the top three best employers in India by Hewitt and Mercer in 2007.

The American Society of Training and Development (ASTD) has also named Satyam as the best globally for its learning practices, the first IT firm outside the US. (IANS)