New Delhi - The Indian government on Sunday nominated three members to the new board of information technology firm Satyam Computer in an effort to stabilize the fraud-hit company.

The three new members are Kiran Karnik, former president of the country's main software industry forum, banker Deepak Parekh, chairman of the Housing Development Finance Corporation, and S Achutan, a former member of market regulator Securities and Exchange Board of India.

The government scrapped Satyam's earlier 10-member board on Friday for "failing to do its duty" after the company's former chairman and founder Ramalinga Raju revealed accounting fraud of 1.43 billion dollars.

Raju and his brother B Rama Raju, who was managing director of the company, have been arrested and remanded to judicial custory till January 23. The police has filed cases of forgery and criminal conspiracy.

V Srinivas, former chief financial officer at Satyam, has also been arrested.

The three-member board appointed by the government would meet within 24 hours to decide on the remaining seven members, federal Corporate Affairs Minister Prem Chand Gupta said at a press briefing in Delhi.

"We will ensure that Satyam continues to function in the best interests of the company and its shareholders," Gupta said.

He said the new board would make its own assessment of the situation and take appropriate decisions. "It would restore credibility to the company, customer confidence and boost morale of employees."

Satyam is India's fourth-largest software exporter and operates in 66 countries. It has 53,000 employees and counts 185 Fortune 500 companies as its customers.

The accounting fraud has battered Satyam's stock which recorded a drop of about 78 per cent between Wednesday and Friday.