Two days after the Rs-7,800 crore Satyam scandal erupted, the Government disbanded the board of the beleaguered IT giant and decided to nominate 10 new directors.

Late on Friday evening, the Andhra Pradesh police arrested Satyam’s disgraced founder Ramalinga Raju and his brother Rama Raju on charges of criminal conspiracy, cheating, forgery, misappropriation of funds and criminal breach of trust.

The company’s Chief Financial Officer Valdamani Srinivasan — rumoured to have attempted suicide earlier in the day — would be arrested tomorrow, DGP S S P Yadav said.

“The current board ceases to exist and there would not be any meeting tomorrow,” Corporate Affairs Minister Prem Chand Gupta said after emerging from a three-hour meeting with his ministry’s top brass. “The Centre is considering appointment of suitable persons as directors of Satyam following interim permission by the Company Law Board,” which will meet in the next seven days.

The high-profile Satyam board was to meet in Hyderabad Saturday to discuss the fallout of the biggest accounting fraud in India’s corporate history, and the fate of Satyam’s 50,000 employees.

Investigators raided Satyam’s Hyderabad offices overnight and seized documents. Eight Satyam Group companies — Maytas Properties, Maytas Infrastructure, Satyam BPO, Nipuna Services, Knowledge Dynamics, Nitor Global Solutions, CA System ASP and Satyam Venture Engineering Services — are under the Government’s scanner.

Satyam’s auditor Price Waterhouse — which did not detect the fraud carried out over several years —will have to wind up its Indian operations, if found guilty of any wrongdoing, minister Gupta said.

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