Raju Arrested, Satyam Board Dissolved

by Jordan Yerman | January 9, 2009 at 09:33 am

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Update: Raju and his brother have been arrested:Computer outsourcing giant Satyam continues to face the heat following CEO Ramalinga Raju's resignation over financial irregularities. India's government blocked Satyam's board of directors from meeting, and will be appointing its own board. I didn't know that the Indian government had that power.

en directors nominated by the government will meet in the next week to appoint managers at Hyderabad-based Satyam, Corporate Affairs Minister Prem Chand Gupta said. Officials have seized documents at India’s fourth-largest software exporter and the nation’s accounting body is examining PWC, he told reporters.

“The developments so far indicate that the current board of Satyam has failed to do what it was supposed to do,” Gupta said in New Delhi today. “The government is committed to punish everyone found guilty, including the auditors.”

Meanwhile, Satyam's stock is getting hammered, dropping to an 11-year low:

India's main stock index reversed early losses on Friday on short-covering after falling more than 2 percent, but shares in Satyam Computer (SATY.BO) were down more than 55 percent.

"The government is considering appointment of suitable persons as directors of Satyam," Corporate Affairs Minister Prem Chand Gupta told a news conference.

Gupta added the newly constituted board must meet within seven days.