Tech Mahindra to appoint new Satyam CFO in two weeks

26 May 2009, ET Bureau

MUMBAI / HYDERABAD: Tech Mahindra, the new owner of the scam-hit Satyam Computer Services, is close to appointing a chief financial officer for the company.

The candidate is from outside the Mahindra group and the announcement is likely to be made within the next two weeks, a top official of the firm told ET. Earlier, Tech Mahindra was reported to be considering many candidates for this post, including one from the Mahindra group itself although not from Tech Mahindra.

The CFO’s appointment is crucial as Satyam’s accounts are being re-stated by two auditors, KPMG and Deloitte. The two firms, which are re-stating accounts for the last six years, made a presentation to the board on Friday. But the process has been time-consuming and expensive. Chairman of the board Kiran Karnik has admitted that the IT firm’s bottom line is under stress.

Satyam plunged into a crisis after its defamed founder B Ramalinga Raju admitted to fudging the books. His erstwhile CFO Srinivas Vadlamani was also charged of conniving with Raju and was also taken to judicial custody.

The government-appointed board to salvage Satyam was given the mandate to appoint both a chief executive officer and CFO for Satyam. AS Murthy, who was from Satyam itself, was named the CEO.

The board had considered some candidates for the post of CFO. Partho S Dutta, former group finance director of the Murugappa group, was offered the job but declined, said a source privy to the development. Dutta is now special advisor on the Satyam board.

The government-appointed board eventually decided that it was better for the new owner to take a decision on CFO. “The position of CFO of Satyam offers unique challenges. In addition to the qualifications of a CFO, the person should have strong contract management skills with customers. The CFO should be able to support the business in evolving the right customer contracts,” said R Suresh, managing director of executive search firm, Stanton Chase.

Given the liquidity challenges Satyam faces, CFO also needs to strong cash management skills and should be in a position to manage recievables and salaries. The CFO also needs to understand the old system that was in place and come up with a new MIS (management information system) that allows transparency in reporting the daily, quarterly and annual financial data, Mr Suresh added.