Srini Raju, another director on the Sify board, was also replaced in the reconstitution exercise, relating to Satyam’s nominees, approved by the board of directors of Sify on Monday.

Chief financial officer V Srinivas and senior vice-president (corporate strategy) K Thiagarajan will be the new nominees of Satyam Computer on Sify’s board of directors, says a company communiqué.

The changes would take effect on receipt of investments from the new investors, Softbank Asia Infrastructure Fund (Saif), a partnership venture between Softbank and Cisco Systems, and VentureTech Solutions Pvt Ltd.

Satyam Computer had, in October this year, announced that the dilution of its stakes in its Internet subsidiary through an allotment of 11.62 million shares of Sify to an arm of Saif and VentureTech.

Says Raju: “Even as I step down from the Sify board, I am heartened and gratified at having played a part, along with the Sify team, in promoting and building Sify to a leadership position in the Internet space, with several pioneering initiatives.”

The approved proposals included issue of shares to an affiliate of Saif and VentureTech, pending financing transaction, an additional allocation for the Association Stock Option Plan, and an amendment to Articles of Association to incorporate specified rights of the new investors.

With this the board of directors of Sify is authorised to issue, in one or more tranches, up to 12.5 million shares, amend the memorandum of articles of association to incorporate rights of Saif and VentureTech, reappoint R Ramaraj as managing director of the company for a further period five years from 1 April 2003, and the change the company’s name to Sify Ltd, subject to the government’s approval.

The approvals facilitate Saif to invest $13 million into Satyam Infoway in December 2002 and VentureTech to invest $3.5 million in the same month and a further $3.5 million on or before April 2003. Satyam Infoway expects that the Saif investment and the first half of the VentureTech investment will be completed on 16 December 2002.

Adds Raju: “With the changes in the market place and renewed strategic focus, I believe Sify is in a better position today than ever before to achieve profitability at an early date. With the funding Sify will receive, Satyam’s stake in Sify will go down to 35 per cent and as we indicated to our shareholders and to signal our intent to play a more passive role, I am stepping down.”