The new board of Satyam is struggling to make sense of the mess left behind by Ramalingam Raju. The immediate problem faced by Satyam is a liquidity crunch since the Rs5,500 crore bank balance was a fictitious one.
Yesterday, Satyam's hopes for a Rs2,000-crore bailout were be dashed, with minister of state for industry Ashwani Kumar categorically saying that the government would not directly or indirectly subsidise th wrong doing and fraud by the IT firm's promoter.
However, the minister said that the government would do everything required to save jobs under the framework of its responsibilities.
Amid concerns over crisis-ridden Satyam's liquidity position, newly-appointed board member Deepak Parekh disclosed that the company's receivables stand at Rs1,700 crore. He also said that Satyam may borrow against assets if there is a need.
Earlier Parekh had said that Satyam might ask clients to accelerate payments to tide over its liquidity crisis. The normal cycle for debtors receivable in the IT sector is is betwen 30 days and 60 days.
Meanwhile another eminent board member, Kiran Karnik has said, Satyam Computer Services' immediate requirement could be close to Rs700-800 crore, including payment of salaries to employees and outstanding debt.
He added that overall estimate for January would be somewhat higher than the next few months as the current month's commitments entailed payment of some outstanding debt.
The Business Line quoted Karnik, "This is the back-of-envelope calculation, but January's estimate is higher because there is some backlog of creditors… For the month of February and March, the requirement will be to the tune of Rs600 crore each… If you adjust the inflow from receivables, the fund requirement will be in the range of Rs1,000-1,500 crore by March end."
Karnik added that by March, the company expected to catch up with the cycle of receivables and expenditure.
While Satyam is leaning toward taking bank loans on commercial basis rather than a bail out. Any bank would like to examine the balance sheet before lending. The restated balance sheet would be ready only in March but Satyam's requirement for funds is urgent.
Meanwhile, an internal email from HR head of Satyam, S V Krishnan, stated that the payroll cycle for mid-January 2009 for US associates would go ahead as scheduled. However there was no mention about the salaries of the Indian employees.
Also, interim CEO Ram Mynampati, had sent an email to the 'economic affairs secretary', saying Rs150 crore was required to meet the health insurance liabilities of the company's employees in the US.
The authorities are also investigating the role of B Suryanarayana Raju, the low-profile youngest sibling of the company's founder B Ramalinga Raju, to get some trails on the missing money.
In an official statement Satyam has said that reports of its senior officers missing are false and misleading. It said, "Satyam flatly denies malicious media reports that suggest executives - specifically, Ram Mynampati, Virender Aggarwal and Keshab Panda - left the country to avoid interacting with investigating authorities. In fact, Dr. Panda remains in India, while Mr. Mynampati and Mr. Aggarwal have returned to the US and Singapore, respectively, where they are based.
"Satyam generates 97 per cent of its revenues from outside of India. These executives are currently meeting with customers in their regions to personally assure them of our ongoing commitment. Satyam continues to serve its customers with excellence, and has received many expressions of confidence and support from clients, due to these efforts.
"The executives remain in constant contact with Satyam's board of directors and are available to authorities. Satyam is cooperating fully with all ongoing investigations."
(See: Institutional investors exit Satyam)