NEW DELHI: The Indian government yesterday ruled out any bailout package for fraud-hit Satyam but promised to take measures needed to save the jobs of its 53,000 employees.
“This government is not going to directly or indirectly subsidize wrongdoings and fraud in Satyam,” Minister of State for Industry Ashwani Kumar said in a statement. The new Satyam board “are the ones to decide” on this, he added. “The government would try and support within the framework of its responsibilities and do whatever it can to preserve and save jobs and to protect the good name of India in the corporate sector,” the minister mantained.
Kumar’s comments defeat speculations voiced earlier about the possibility of the government considering a bailout package for Satyam Computer, ranging between Rs.5 billion and Rs.20 billion. Satyam’s senior executive Ram Mynampati is understood to have sent a letter to Economic Affairs Secretary saying that the company needed Rs.1.5 billion to meet health insurance liabilities of the company’s employees in the United States.
Shares of Satyam fell 32.22 percent or 9.65 rupees to 20.30 rupees yesterday as talk faded of government help, dealers said.
The stock of the New York-listed company has plunged nearly 90 percent since its founder Ramalinga Raju’s dramatic confession that 94 percent of the cash on Satyam’s books did not exist.
Economic Affairs Secretary Ashok Chawla also said there was no plan for a bailout for Satyam, although Commerce Minister Kamal Nath had earlier said the government was willing to consider support for the cash-strapped company based in the southern city of Hyderabad.