Satyam names CEO, special advisors; secures financing

HYDERABAD, INDIA: Satyam Computer Services Ltd has appointed A.S. Murthy as chief executive officer. Murthy, a 15-year veteran of the organization, begins immediately.

"Extensive board discussions over the past few weeks made it clear that the new CEO should come from within," said Satyam Board Member Deepak Parekh. "ASM, an extraordinary executive with widespread support among all stakeholders, internal and external, will do an exceptional job leading Satyam at this critical juncture.

"ASM has a deep understanding of the organization and proven management expertise; he has led a business unit, overseen global delivery, nurtured customer relationships and spearheaded the entire human resources function. Moreover, he is extremely well respected for his ability to integrate teams and foster collective decision making, critical skills as Satyam continues to revive."

The board also appointed Homi Khusrokhan, the former Managing Director of Tata Chemicals, and Partho Datta, the former Finance Director of the Murugappa Group, as special advisors. These experienced executives will lend their expertise to Satyam's Management and Finance areas, respectively. The special advisors, along with Boston Consulting Group, will work pro bono and help Murthy and the board define and execute key strategies.

The critical appointments have further stabilized Satyam, which is recovering from an accounting crisis that came to light a month ago. In that time, the organization has worked hard to increase its focus on business continuity and restore associate and vendor confidence.

"This is a unique opportunity to provide direction and guidance and I accept it with all humility. I have no misgivings about the enormity of the task in front of us, but I am confident Satyam can accomplish great things, now, and well into the future," Murthy said. "I look forward to working very closely with the board, our advisors and all Satyamites, to restore Satyam to its well-deserved glory. Our immediate priority is to chart precise and practical 30-, 60- and 90-day plans that encompass and address the interests of all stakeholders."

In another significant development, the board confirmed that it has secured approximately $130 million in financing, which will be directed toward working capital requirements. The loan, along with healthy collections, will help the company manage several short-term financial challenges. Satyam also reaffirmed that January salaries (globally) and mid-February salaries (US-based associates) have been met from internal accruals (US-based associates are paid every two weeks).

In the next few weeks, Datta will focus on completing the complex financial restatement exercise, including announcement of third quarter results, and ensuring prudent financial operations. Khusrokhan will lend his expertise to the board, the priorities of which remain:

* Reaching out to customers and associates to reinforce their trust and confidence

* Asserting the financial position and restating Q3 results

* Evaluating long-term strategic options

* Assessing and managing legal liabilities

* Undertaking cost rationalization measures

(* Resuming investments in identified areas

From a legal perspective, Wachtell, Lipton, Rosen & Katz (www.wlrk.com) will defend Satyam against class action suits in the U.S. Additionally, Latham & Watkins, a firm that has worked with Satyam for more than eight years, will continue its dialogue with the US Securities and Exchange Commission on the organization's behalf.

The two-day meeting, the board's fifth in less than a month, was chaired by Board Member C. Achuthan, the former presiding officer of the Securities Appellate Tribunal.

"I am confident we are on the right track and can continue to safeguard interests of our customers, associates, investors and other stakeholders," he said.