New Delhi, January 13
Prime Minister Manmohan Singh today held discussions on the bailout package for Satyam Computers with Commerce and Industry Minister Kamal Nath, External Affairs Minister Pranab Mukherjee, deputy chairman of Planning Commission Montek Singh Ahluwalia, Home Minister P Chidambaram, and Company Affairs Minister PC Gupta. Sources in the know of the development confirmed that the bailout package was being considered and also the mechanics of the package were being discussed broadly.

However, the source did not reveal how big the package would be, but stated that mechanics would include a loan to Satyam for a definite period by financial lender, as also reinstating a government nominee on the board, probably from a financial institution or SEBI. The government-nominated board will, however, quantify how much money is really needed to give a lifeline to the cash- strapped firm, the sources add.

The Prime Minister is reported to be holding discussions, practically everyday on the issue, as a lot for India is at stake in terms of its image as a services sector leader.

Earlier in the day, the government ordered investigation into the Satyam scandal by the Serious Fraud Investigation Office (SFIO), an entity that probes cases of economic offences of grave nature.

The SFIO was ordered after Corporate Affairs Minister PC Gupta met the Prime Minister earlier in the morning and briefed him on the developing situation.

The SFIO will submit its report in three months. “The government has ordered the probe based on the report from Registrar of Companies, Hyderabad, to study irregularities and other related anomalies in the books of accounts and other acts of commission and omission,” said the minister.

As regards appointing more directors on the board of the company, as is the demand of some private investors, the minister said corporate affairs secretary Anurag Goel was in constant touch with the board and a decision would be taken soon.

The decision to order a probe by the SFIO was taken by the government after it received a report from the Registrar of Companies (RoC), Hyderabad. The RoC had been inspecting the books of Satyam Computer Services and eight other companies belonging to the kin of the former chairman of the IT major, B Ramalinga Raju, since the past two days.

The government had on Sunday appointed a three-member board comprising HDFC chairman Deepak Parekh, former Nasscom president Kiran Karnik and former Securities Appellate Tribunal (SAT) presiding officer C Achuthan to steer the fraud-hit IT major out of trouble.

Parekh on Monday said more directors were likely to be appointed by the government. The government, according to the order of the Company Law Board (CLB), can appoint at most 10 directors on the board of Satyam.