Satyam Board-Member Says LIC Likely To Give Funding

Tuesday January 27, 06:00 PM

Satyam Board-Member Says LIC Likely To Give Funding

MUMBAI (Reuters) - The new board of fraud-hit Satyam Computer Services is arranging funds from banks and financial institutions, including state-run Life Insurance Corp, (LIC) to pay salaries and bills, board members said in webcasts.

"We will work out some working capital loans from bankers and some rupee term loan from financial institutions, particularly my own organisation," S. Balakrishnan, a senior official at India's largest insurer LIC and a member of the outsourcing firm's new government-appointed board, said in a webcast to employees.

A Satyam spokeswoman said the company had uploaded comments from the board member on the YouTube website. For webcast, see

http://www.youtube.com/watch?v=WL4Jm1lqOVM&feature=related

Satyam has been struggling for survival since Jan. 7 when founder Ramalinga Raju resigned as chairman and revealed profits had been overstated for years and $1 billion in cash on the books did not exist.

"It is a huge liquidity crunch in the company and till the accounts are restated it is very difficult for banks to lend money," new board member and senior banker Deepak Parekh said on another webcast uploaded on the site.

"But we have made arrangements and I hope the money comes in the next few days so that payments are made on time."

Satyam's board is meeting on Tuesday. It was expected to discussing securing funds to pay salaries and bills and a shortlist of three candidates for chief executive and chief financial officer. On Friday it said it hoped to secure funds before Jan. 28 to tide it over until the end of March.

(For full coverage on Satyam click

http://in.reuters.com/news/globalcoverage/satyamstory)

(For Quotes and Interactive Charts of Satyam Computer Services click

http://in.reuters.com/money/quotes/chart?symbol=SATY.BO)