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Immunity for new Satyam Board

Ashok Dasgupta

This is to enable it to discharge its functions without any fear

Order exempts directors from any action by PF authorities

CLB authorises Satyam Board to raise finance by loan or mortgage

NEW DELHI: The Company Law Board (CLB) on Thursday granted immunity and wide-ranging powers to the six members of the newly appointed Board of the crisis-ridden Satyam Computer Services to enable them to discharge their functions without any threat of punitive action by government agencies.

Passing the order on an application moved by the Centre, CLB Chairman S. Balasubramanian said: “To ensure that the present Board of directors discharge its function without any apprehension of being subjected to criminal, civil or punitive action, I direct that none of the state or central government agencies shall ... initiate any action against the present directors.”

The order also exempts the current directors on the Satyam Board from any action by provident fund authorities. “I restrain the PF authorities from initiating any action against the present directors of the company without the leave of this Board,” the CLB chief said.

“Court officers”

The CLB has also authorised the six-member Board of the Hyderabad-based IT major to raise finance in the form of loan or mortgage by pledging movable and immovable assets, including securities. “Since they have been appointed in the name and on behalf of this Board [CLB], they are like court officers and, therefore, every State or Central government entity is bound to assist and support them in their endeavours, more so, when they have joined the Board as a measure of public service,” the CLB order said.

Besides, the CLB had also made it clear that no State or Central government authorities would enforce its “regulatory, enforcement or like such powers, initiate any action, civil, criminal, punitive, coercive against the present directors” of Satyam. However, it has also told the Board to cooperate and furnish documents as and when required by the investigating agencies. “The Board of directors shall cooperate with the agencies concerned as may be necessary, whenever any information or documents are required by these agencies,” the CLB Chairman said.

The CLB also clarified that, as per its order of January 9, 2009, the new Board of Satyam is fully authorised to raise finance for the crisis-ridden company. “… this authorisation is applicable to raising of finance in the form of loan or otherwise and also to mortgage, charge and encumber any of the movable and immovable assets of the company, including providing them as securities, if need be.”

Meanwhile, there appear to be seven possible suitors for Satyam even as company’s investment bankers are trying to select the best. “So far we are aware of four [companies that have approached Satyam Computer]. But we have heard that another two or three firms are also interested,” Board member Tarun Das told the media here.

Mr. Das pointed out that the investment bankers were talking to everybody to evaluate the level of interest and seriousness of the suitors before getting back to the Board. “The process is likely to take six weeks,” he said.

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