No Govt bailout for Satyam, CBI probe likely

New Delhi: The Union Government has ruled out a bailout package for crisis-ridden Satyam Computer but assured it would do everything required to save jobs under the framework of its responsibilities.

"This is a decision that the new board of Satyam would take. This government is not going to directly or indirectly subsidise wrong doing and fraud in Satyam," Minister of State for Industry Ashwani Kumar told reporters on the sidelines of a Petrotech-2009 conference.

"The government will try to ensure to the extent possible that the brand equity of the country and Satyam in terms of its intellectual capital is preserved and the jobs are secured to the extent possible", The minister said, adding, "I do believe that Satyam aberration should not in any way take away from the great success story of India in the IT sector."

Sources also tell CNN-IBN that the Central Bureau of Investigation is likely to probe the Satyam deal at the behest of Andhra Pradesh chief minister Y S R Reddy.

Soucres also tell CNN-IN that government banks will form an audit panel to probe the money given to Maytas. SBI, IDBI, Canara Bank and Bank of India will be part of the panel, which will be headed by SBI.

Maytas Infrastructure has 56 projects worth 3800 crore spread over 14 states

Earlier speculation was rife that the government is considering a package of up to Rs 2,000 crore to bail out Satyam Computer. But shortly after the Prime Minister Manmohan Singh's review meeting on Satyam on Tuesday, there was media speculation that government would be considering a financial assistance ranging between Rs 500 crore and Rs 2,000 crore but the PMO office declined to comment on it.

The official sources had also indicated that the government appointed Satyam board had written a letter to the finance ministry raising concerns about the liquidity crunch in the troubled company.

Satyam is said to have 53,000 employees on board and needs over Rs 500 crore a month to meet the staff cost. Satyam had plunged into a deep crisis following the founder-chairman B Ramalinga Raju's admission that he fudged the company accounts to the tune of Rs 7,800 crore.

(Inputs from agencies)