Shares in Indian software firm Satyam have jumped 51% on hopes of a rescue plan for the scandal-hit firm.
On Sunday, the Indian government appointed three leading businessmen to the company's board.
The board is meeting to draw up a rescue plan for the firm that has been at the centre of a scandal over the falsifying of accounts.
Meanwhile, the World Bank revealed that Satyam and two other Indian IT firms are on a business blacklist.
The Satyam scandal has undermined investors' confidence in India's booming outsourcing industry.
Deepak Parekh, a senior banker and one of the firm's new bosses, is due to hold a news conference at 5 pm local time - about 1130 GMT.
Satyam shares were up 51% at 36.05 rupees after the stock lost 87% last week.
World Bank
India's IT sector was dealt a further blow after the World Bank said that three Indian firms, including Satyam, were on a list of- companies that are banned from doing business with the bank.
Satyam's office in Bangalore
Satyam employs more than 50,000 people
Shares in Indian software firm Satyam have jumped 51% on hopes of a rescue plan for the scandal-hit firm.
On Sunday, the Indian government appointed three leading businessmen to the company's board.
The board is meeting to draw up a rescue plan for the firm that has been at the centre of a scandal over the falsifying of accounts.
Meanwhile, the World Bank revealed that Satyam and two other Indian IT firms are on a business blacklist.
The Satyam scandal has undermined investors' confidence in India's booming outsourcing industry.
Deepak Parekh, a senior banker and one of the firm's new bosses, is due to hold a news conference at 5 pm local time - about 1130 GMT.
Satyam shares were up 51% at 36.05 rupees after the stock lost 87% last week.
World Bank
India's IT sector was dealt a further blow after the World Bank said that three Indian firms, including Satyam, were on a list of- companies that are banned from doing business with the bank.
WORLD BANK BLACKLIST
Satyam barred for 8 years
Wipro barred for 4 years
Megasoft barred for 4 years
Source: World Bank
This was the first time the World Bank had disclosed the list of companies barred from receiving direct contracts under its corporate procurement program.
Satyam was banned in September 2008 for eight years and Wipro Technologies was blacklisted for four years from June 2007 for providing improper benefits to World Bank staff.
Wipro said it was banned for offering World Bank employees shares in its stock offer in the US in 2000.
Megasoft Consultants was banned for 4 years from December 2007 for taking part in a joint venture with World Bank staff while also conducting business with the Bank.
Shares in Wipro and Megasoft fell sharply on the news.
Arrests
The entire board of Satyam, a private company, had been sacked after its founder and former chairman had been arrested.
Ramalinga Raju and his brother Rama, also a former Satyam director, were arrested on charges including criminal conspiracy and forgery.
Mr Raju admitted last week that the firm had been falsifying its accounts.
He said the company had exaggerated its cash reserves by some $1bn (£661m).
The other new directors are Kiran Karnik, the former boss of technology trade group Nasscom, and C Achuthan, a former member of the Securities and Exchange Board of India.
The company, which employs 53,000 people and enjoyed a turnover of $40bn last year, is now fighting for its life.
Its clients include Nestle, General Electric and Ford.
The Raju brothers have also been charged with criminal breach of trust and falsifying documents.
They have been remanded in custody until 23 January, and could face life in prison.
Indian police have also now detained Vadlamani Srinivas, Satyam's chief financial officer, for questioning.
No comments:
Post a Comment