Satyam Computer Shares Rise After Fraud-Hit Company Names CEO
Feb. 6 (Bloomberg) — Satyam Computer Services Ltd., the Indian software provider at the center of the country’s biggest fraud investigation, rose in Mumbai trading after it named a chief executive officer ending four weeks of leadership vacuum.
Satyam rose 5.5 percent to 49 rupees at 10:01 a.m. local time, the most since Feb. 2. The benchmark Sensitive Index rose 1 percent.
A. S. Murty, a 15-year Satyam veteran, was yesterday named CEO and tasked to help reassure clients, creditors and employees that the Hyderabad-based provider can survive, while the board evaluates bids from Larsen & Toubro Ltd. and other suitors. The company has been run by state-appointed directors since its founder and former chairman Ramalinga Raju said he falsified accounts.
The 50-year-old electrical engineer who oversaw global delivery of the company’s services in his previous role as chief delivery officer may have his task cut out trying to keep customers from joining State Farm Mutual Automobile Insurance Co. in canceling contracts.
“The stock should react positively because one part of the work is over,” Tarun Sisodia, a Mumbai-based analyst at Anand Rathi Financial Services Ltd. said yesterday. “The uncertainty over the company’s future, however, will remain in investors’ minds as long as there isn’t clarity about the financials.”
Satyam said on Jan. 23 that selecting a CEO and finance chief was critical for the company and its investors after the scandal wiped out about 80 percent of market value in less than three weeks.