Satyam chairman taken into custody
The head of one of India's largest firms is implicated in a corporate scandal that inflated the company's profits for years.
HYDERABAD, INDIA (Reuters) -- The chairman of India's Satyam Computer Services was taken into judicial custody until Jan. 23, his lawyer said on Saturday, as authorities seek to unravel India's biggest corporate scandal.
Ramalinga Raju and his brother B. Rama Raju, Satyam's co-founder and managing director, were arrested late on Friday on charges of criminal breach of trust, criminal conspiracy, cheating, falsification of records and forgery.
"He has been sent to judicial custody til Jan. 23," S. Bharat Kumar, Ramalinga Raju's lawyer told reporters outside a magistrate's residence in the southern city of Hyderabad.
His brother was also remanded until Jan. 23, and both will be held at the city's Chanchalguda jail.
According to Kumar, the magistrate said Ramalinga Raju's health was to be monitored after he said his client was not well. Kumar added he would file a bail application on Monday.
Separately, the Indian government said it was working on selecting a new 10-member board for Satyam, after it dissolved the outsourcers' board on Friday ahead of a planned Saturday meeting.
Chairman and founder Raju resigned on Wednesday after revealing years of accounting fraud at Satyam, including an admission that about $1 billion, or 94% of the cash and bank balances on Satyam's books at the end of September, did not exist.
Stand-in Chief Executive Ram Mynampati said the scandal had pushed the company into a crisis of unimaginable proportions.
Satyam's market value has shrivelled to $330 million at Friday's close, from more than $7 billion six months ago.
On Saturday, Corporate Affairs Minister Prem Chand Gupta said the composition of the new board was still to be finalised.
"We are working on the names," Gupta told reporters in New Delhi.
After dissolving the previous board on Friday, Gupta said the new 10-member board would meet within seven days but added there was no move to take over Satyam's management.
On Saturday, Gupta said the government had received a letter from Lazard about representation on the new board, and said it was being looked into.
Lazard's lawyer told television station CNBC TV18 that Lazard was Satyam's largest shareholder and wanted a board position. The television station said it had a 7.4% stake.
Stock exchange data showed that Lazard Asset Management held a 2.15% stake in Satyam as of Sept. 30, 2008.
"Now that the government has decided to appoint a new board, then we would like the government to consult us on the appointment of the members to the board," Hitesh Jain, Lazard's lawyer, told CNBC TV18, adding it also wanted to be consulted about other steps the government wanted to take on Satyam.
Several securities fraud class action lawsuits have been filed in the United States on behalf of investors who bought Satyam American Depository Receipts (ADRs) in the last five years.
Hyderabad-based Satyam specialises in business software and back-office services for clients including General Electric and Nestle. 
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