Indian outsourcing firm Satyam, which is reeling from accounting fraud, said Thursday that it has named an insider as the new CEO and lined up $130 million in financing to keep operations running.
In a statement, Satyam said A.S. Murty will become the new CEO. Murty has been with Satyam for 15 years and most recently headed the company's leadership development group. Murty also led Satyam's delivery group so will at least be well versed in customer service. Satyam board member Deepak Pareck said it was clear that the new CEO had to come from within.
Last month, Satyam revealed massive financial fraud and has been reeling ever since. The company's biggest two missions are stabilizing the business and convincing customers to stick.
Also see: Satyam: resignations, appointments and YouTube videos
While Murty knows Satyam's operations well it's unclear how the appointment will be received. Satyam (all resources) also appointed two outsiders as "special advisors." The company appointed Homi Khusrokhan, the former Managing Director of Tata Chemicals, and Partho Datta, the former Finance Director of the Murugappa Group, to offer expertise as the company tries to recover. Both will work for free. Datta's big task will be sorting out Satyam's books in what the company calls "completing the complex financial restatement exercise."
Perhaps more importantly, Satyam secured about $130 million in financing for working capital. Satyam said:
The loan, along with healthy collections, will help the company manage several short-term financial challenges. Satyam also reaffirmed that January salaries (globally) and mid-February salaries (US-based associates) have been met from internal accruals. (US-based associates are paid every two weeks.).
For now, Satyam has stabilized the company enough to give it a shot. It remains to be seen if Murty can prevent customers from leaving.