Saturday, January 31, 2009

Karnik may be named Satyam chairman

Kiran Karnik, former president of Nasscom and a government appointee to the board of Satyam Computer Services, may be named the company’s chairman, according to people familiar with the matter.

The government has sounded Mr Karnik out on its plans to appoint him as Satyam’s chairman, said a government official, who asked not to be named. Mr Karnik’s colleagues on the board have told the government that they have no objection to his appointment, the official said.

When contacted by ET, Mr Karnik said, “I can neither confirm nor deny it.” Mr Karnik, who headed Nasscom from 2001 to 2008, is a respected figure in the IT industry. His appointment as chairman at Satyam could help control the damage done to the firm’s image and reassure its major clients, the government official said.

The government had dissolved the original board of Satyam on January 9, two days after a sensational confession by its now-disgraced founder B Ramalinga Raju that he had fudged the company’s accounts for years. The government initially appointed a three-member board with Mr Karnik, HDFC chairman Deepak Parekh and former Securities Appellate Tribunal chief C Achuthan as members.

It was expanded later with the induction of three more members, CII chief mentor Tarun Das, former ICAI president TN Manoharan and LIC’s S Balakrishnan.

No chairman has been appointed as yet, and the directors have been taking turns at chairing the board meetings. The government now feels that it would be better to appoint a permanent chairman who could be identified as the public face of the company and speak on board-related issues.

Mr Karnik also serves on the board of other firms, including BPO firm EXLService Holdings. His appointment to the Satyam board had earlier led to concerns over potential conflicts of interest, but it was later clarified that EXL and Satyam don’t compete with each other.

Apart from EXL, he also serves on the advisory board of venture capital firm IDG Ventures India.

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