Returned late night from Bengaluru at 1 am in the morning as Flight was delayed after delivering a two day Equity Workshop at the weekend…the  eight in a series for a Broking House…It was pouring as we drove to the New Airport,50 + kms away from the City…but we had a Mad Max Driver who drove as if his life,and ours !, depended on it ! weaving at 100 kmph through stranded cars in the fast flooding roads ! and despite incessant rain whipping the windscreen…paid a ridiculous Rs 260 User Fee to access the Airport

Had gone earlier on Thursday,to spend two days at a friend’s 75 acre farm, 20 kms outside Bengaluru,on the fringe of the Bannnerghata Wildlife Park…what a great break !…could hear the silence !…had friend’s three dogs ( Small Datschund and Large Dalmatians!) all over me…Elephants and Monkeys destroy crops and so commercial farming becomes a tedious affair …tried to spot a Gharial in one of his four water harvested ponds on the farm…it had probably slipped in from the forest through the canals….relaxed company , great organic food,fresh vegetables,fresh mangoes,fresh coconut water,fresh jackfruit and fresh rains !…too short a break,though !

Then switched to workshop mode on Saturday Morning….It was truly satisfying…When I threw the House open  for any questions on Sunday ,prompt came the first one “When will you come back to Bengaluru for your next workshop !?….Thanks! Karnataka and Andhra Pradesh ! for some great participation

We had some fun discussing Valuations of Reliance Industries,Satyam and Reliance Power and even Jaiprakash Hydro among others companies…and am glad you’ll were genuine in your reactions when we played the Integrity,Insider Trading and Irrational Behaviour Scenarios

Now you know how Mumbai,Vadodora and Rajkot got excited  on Reliance Ind Valuations in March and April 2009  at Rs 1100 to Rs 1300 !…maybe I should have come to Bengaluru first !

So all of you know what is the appropriate Valuation Basis to use for Satyam…and how you can make some money on it ,based on an event based risk in June 2009 !

You are now acquainted with the Valuation Risks of Reliance Power at Rs 180 and Jai Prakash Hydro at Rs 70 !

Shanteeth,I hope we do get to 23000 + on the Sensex in 2009 itself, as you aggressively suggested at the outset of the workshop based on Technicals…though  I showed you why it looks highly improbable on Fundamentals !…glad you loved the Book I gave you “Screw it ! Just Do it! ” by Richard Branson…now pass it on so someone else enjoys it too !

And Shiv Prasad,I hope you can now scale up your business by some rational thinking and by trusting more !…and not succumb to Improper Framing when applying Investment funds

And Vincent,you’re a good thinker…very few have sensed the reason why ,that when one’s business is not doing well and the product is not selling , you raise the price and the product starts selling !….Economics would have dictated otherwise.

And Prabhu,you’re smart…not many would have guessed why one particular Slot Machine in the Las Vegas Casino gave higher revenues to the Casino Owner

And Nagendra,as you touch 60,the need for protection of wealth needs to be re-emphasised when growing it !…actually to ‘Protect’ and to ‘Grow’ Wealth is the Prime Function of Asset Allocation and Optimal Portfolio

We played out Investor Mistakes and the Reinvestment Risk…we discussed Investor Icons,Warren Buffett and Peter Lynch and their Investment philosophies and whether we can apply these in India

We discussed Concepts of Value v/s Price,Beta and it’s role in Hedging,Valuation and Investment Strategies…..Global and US Economic Crisis and it’s Impact on India…are we decoupled enough ?…our Fiscal Deficit Problems and our Extraordinary High Government Borrowings to fund Non Plan Expenditure,especially Defence and Subsidies

We saw the Market Dynamics impacting the Sensex…it’s macro valuations in the past and levels projected based on Earnings and Multiples…the Sensex CAGR over 5,8 and 18 years

We saw the impact of FII Inflows and Outflows from 2005 to date in 2009….How FII’s have reversed outflows and May 2009 itself saw an inflow of US $ 4.14 Billion !…and if US $ 10 Billion more comes in,as expected this year,how it will continue to fuel the Sensex

I’m sure I’ll be back in Bengaluru !…maybe we can all have the workshop in Mauritius as we discussed when computing the Interest Cost on the EMI Scheme of ‘Fly Now,Pay Later’ covered during the ‘Time Value of Money’ session !

Cheers !

This evening ,it was interesting to view live on Stock Channels,Anand Mahindra,Vineet Nayyar (MD of Tech Mahindra) and Bharat Doshi (CFO of the M& M Group) and make sense of their sense on being the highest bidder at Rs 58 for Satyam

• Anand Mahindra reiterated that their’s was yet only the Highest Bid and not the Winning Bid…they would need to await CLB approval to confirm that they indeed had won
• Anand Mahindra spoke of contacting each and every one of Satyam’s clients,like Vikram Pandit of Citicorp and GM to assure them of the highest level of Client servicing…..I daresay,these American Giants are battling for their own survival ! 
• On how they arrived at Rs 58 as the Bid,Anand Mahindra refused to disclose the specifics ,but suavely stated that they preferrred to look forward and not look back to see who’s chasing
• The bid at Rs 58 did consider the quantum of legal liabilities that may arise,but Vineet Nayyar parried a question to disclose the exact amount they had estimated…This is a calculated risk that TM has taken,stated Anand Mahindra…Nayyar hoped they are right on this but cannot be 100% sure or guarantee limited liability.
• The bid at Rs 58 also considered the fact the the Revenues had dropped from US $ 1.8 b to US $ 1.5 b and further to US $ 1.3 b and the low margins are actually seen as opportunities to plug…However this would mean a monthly turnover of just Rs 550 crs and operating profits of Rs 10 crs at current margins…This is bad and simply does not support a valuation and bid of Rs 58 !…This would mean an EPS of below Rs 2 !…Satyam needs to earn at a net level Rs 750 crs to Rs 1000 crs PAT per annum to show an EPS of Rs 8 to Rs 10 to support a price of Rs 58….This indicates a strong trimming of the workforce..Covered in the last point below
• Vineet Nayyar disclosed that both,Satyam and Tech Mahindra complimented each other in many ways…TM had 70% of Revenues in GBP and Euros while Satyam had 70% in US Dollars,thus providing a natural currency hedge…though there were 600 clients,none were overlapping…also TM has Telecom Domain expertise,while Satyam was competent in several other verticals
• Bharat Doshi disclosed that the Rs 2890 crs required to fund the 51% stake would be funded by Rs 700 Crs internal accruals in TM and Rs 2200 crs had been tied up as debt with Kotak.TM’s Balance Sheet comfortably supported raising this debt
• The Bid was supported strongly by all Boards…Mahindra & Mahindra,Tech Mahindra and even British Telecom
• It is too early to decide whether the Satyam Workforce will be trimmed…With falling revenues,low margins,I am quite sure this will happen…If they lay off 10000 ,there will be saving of Rs 400 crs 

The 2 pm media meet by the Board of Directors of Satyam threw up some interesting facts about the Satyam Bidding Process

• Larsen & Toubro bid was Rs 45.90/share for Satyam
• Wilbur Ross’s bid was even lower at Rs 20/share !
• The winner,Tech Mahindra, bid Rs 58 through it’s 100% subsidiary….the bid spread clearly indicates the wide ranging Satyam risk and valuation perspectives
• Tech Mahindra can take over the management of Satyam immediately after Monies come in and the Company Law Board approves the bid…they do not have to wait for the Open Offer
• Restatement of Accounts for the past Six Years will take a few more months…Both Accountant Firms retained are working towards this
• Employees are 51000 of which 45500 are Satyam standalone,rest are contracted and associates
• Satyam owns 450 acres of Freehold and Leasehold land in equal ratio…125 acres are over two Campus in Hyderabad City,one in IT City and the other is Satyam Technology Centre…These have been independently valued at Rs 1700 crs by three different valuers and Rs 600 Bank Loan arrangements with two Banks have been made against these two campus
• Loan Drawn so far is Rs 300 crs,which they will repay from the bid monies
• Larsen & Toubro Shares have a lock in of six months…so,can we assume, they cannot be tendered in the Open Offer 
• It is upto Tech Mahindra to decide to bring in another Equity Investor or merge Satyam with itself…They cannot strip Satyam of it’s assets…This,I can tell you is,one of the provisions of the SASTA or Substantial Acquisition and Takeover Act.It prohibits asset stripping for Two Years after the acquisition or takeover 
• If Tech Mahindra does not deposit the monies of Rs 1756 crs in the Escrow account and in the Company,in the determined ratio, within four working days…that’s by coming Monday,as tomorrow’s a Holiday,the second highest bidder will not be invited to come in…However,the Chairman of Satyam,Mr Kiran Karnik does not feels that this situation could occur.
• As far as retaining the name ‘Satyam’,the Board has not suggested anything to the Winning Bidder…it will be their decision 
• The mandatory offer will be at Rs 58 and the open offer process will be followed which would have to seek SEBI approval…The Open Offer would probably be inside two months…that’s by June 2009   

The Satyam Drama continues

The winning bid for takeover of Satyam is just announced…Tech Mahindra has emerged as the winning bidder with a bid of Rs 58 share through it’s subsidiary Venturbay Consultants…No other bid comes close to 90% of this bid…Thus other competitive bidders like Larsen & Toubro have bid below Rs 52.20

Tech Mahindra will have to pay Rs 1757 crs ( US $ 351 Million) for acquiring 30.28 cr shares and a 31% stake It will have to make the mandatory open offer now to acquire another 20% from the Satyam Shareholders

Due to SEBI largesse on flexibility of the Open Offer Pricing,quite certainly due to pressures from the Government and the bidders,the Open Offer Pricing will be Rs 58 per share and not at Rs 150 +,which it otherwise would have been ….This would mean another Rs 1132 crs (US $ 226 million) to acquire this 20% if offered to take Tech Mahindra’s stake upto 51%

Major Questions yet remain

• Larsen & Toubro,the losing bidder,holds a 12% stake,which has cost them an average of Rs 80 per share….what will be their strategy now ?
• US Giant IBM,walked out of the Bidding because of Satyam’s USA Lawsuits….The Liabilities can be significant…Hundreds of Millions of Dollars…possibly even a Billion Plus…This would break Satyam,if they do materialize
• Issues of Client and Employee Continuity Remain…Many clients have left…some even absorbing the Satyam Team on their project to ensure continuity
• Why did Indian IT Giants,Infosys,TCS and Wipro stay away from Satyam ? Will they rue a missed chance to buy a Big Company at distress price or do they have some experience and a better sense of what devastating missiles these USA Lawsuits can hurl at Satyam ?
• Tech Mahindra may have won the bid,but have they not exposed themselves to Satyam’s USA Lawsuits ?

Stock Price  of Tech Mahindra has shot up past 12% to Rs 360 today,while Satyam Share Price too has been bouyant at Rs 50,up nearly 10%….Larsen & Toubro has seen it’s price initially fall,and then recover…It’s down just Rs 8 at Rs 824 at 12.52 pm right now

The Big Uncertainty and the Big lack of Clarity remains on the outcome of Satyam’s USA Lawsuits…The Risk is so high as to threaten the very survival of Satyam…Tech Mahindra has knowingly taken this risk…It’s an aggressive play…the distress price of Satyam was just too tempting an opportunity perhaps even after considering the sizeable risks attached

Business Acumen or Foolishness ?…Only Time will tell

Mr Anand Mahindra has taken this risk…I would not have…..What would you have done ? 

So,those who have been playing Satyam from Rs 15 to Rs 50,should they exit now !?….Well at hypothetical Rs 500 crs PAT the EPS would be just over Rs 5 on expanded capital…that’s a 10 PE at todays price…a Rs 1000 crs PAT would give a 5 PE….Take an informed call…Consider tax status too…If you wish to exit through the Open Offer,there would be no STT and therefore your short term gains will be taxed in your tax bracket rate and not at 15% …also Tech Mahindra may not buy out all your shares  

Restatement of Satyam Accounts is expected by June 2009…Maybe some clarity on a fairer Valuation would emerge then.    

Just read a very interesting update on Maytas Properties in todays’ edition of Financial Express

Maytas Properties is facing the prospects of the Government taking it over the Board,just as they did for Satyam

The matter was being heard by the Company Law Board (CLB) and the company’s counsel suggested that the Government could appoint an observer or a Director on the Board…This was opposed by the Deputy Director,who represented the Government…He wants the Government to take over the Whole Board and thus the Company itself.

The Deputy Director made some interesting arguments on the Ernst & Young (E & Y) Valuation of Rs 6523 crs of Maytas Properties

• There was a clear nexus between Father,Ramalinga Raju of Satyam, and Son,B Rama Raju,of Maytas Properties as they had relied on the E & Y Valuation to justify Satyam’s Proposal to takeover Maytas
• This Valuation is Hollow as Maytas,as per government knowledge, has no land bank and has just a turnover of Rs 22 crs but the valuation was done at Rs 6523 crs
• Government Alleges Fraud in the Valuation….E & Y has said in it’s Valuation report that they have valued all Maytas’s 31 projects in Chennai     ,Hyderabad,Bangalore and Nagpur and except for the Electronic City Project in Bangalore,land has been acquired
• The fact is that Maytas Properties does not have any land.Some of it’s subsidiary companies have Development Rights,not lands….so the only asset the subsidiaries have are these rights
• CLB Chairman,S Balasubramanian enquired whether E & Y did the Valuation in a Week..to which the Deputy Director replied ” No,the Valuation was done in a day only.”

So we have Two of the Big Four Accounting Firms facing bigtime flak in this sordid Satyam Saga…Price Waterhouse as Satyam auditors and Ernst & Young as Maytas Properties Valuers

What’s going to come out next !   

I’ve been reading R Jagannathan’s Columns in the DNA more frequently than before…As Editor of DNA,he is fearlessly and without favour coming across strongly in his Opinions…..does not hesitate to pen them while calling a spade a spade…surely a big burden to bear in these vested times ! 

This is how he opens his column today in DNA on the ongoing Investigations in Satyam

I for one,was not surprised to hear the shocking views on revising the ‘ Open Offer’ Pricing guidelines of JR Varma…He is an ex-SEBI Member and had also headed their Corporate Governance Committee…..He is clearly building up the ground for the Government to direct SEBI to do exactly just this to facilitate Larsen

Mr Varma,was quite forceful in stating on CNBC 18 today that the  current pricing parameters for the mandatory ‘ Open Offer’ to remaining shareholders by the acquirer,once he buys 15% of the company’s equity should be revised….It is unfair,he states, that the acquirer has to pay the average of the last 26 weeks share prices…This parameter was created to protect Minority Shareholders and also that there was some level of distrust on the fairness and authencity of pricing in Share Markets…but for liquid shares,like Satyam,Mr Varma,is of the opinion that the Current Prevailing Market Price can serve as the basis

Mr Varma,you are clearly and perhaps deliberately missing the point here…Larsen made a mistake and then averaged Satyam…Mr Naik of Larsen has been openly canvassing for political,bureacratic and institutional support  in buying out Satyam as also tweaking the SEBI ‘Open Offer’ pricing parameters…Clearly ,Mr Varma,you are supporting this move….Are you being Led here ? or do you heart of hearts believe that SEBI Takeover Norms should be revised !?

The Point also here is ‘Insider Trading’…was Larsen Privy to some clear assurances from the government on both,issues of Legal protection from class action lawsuits in USA against Satyam and dilution of ‘Open Offer’ Pricing Formula ?….after which Larsen went ahead on January 23,2009,exactly just a month after it had began it’s disastrous 3.95% buying of Satyam shares at @ Rs 175,and picked up another 8% stake at Rs 40+…it now holds just above 12% in Satyam at an average of @ Rs 80 and is awaiting SEBI to dilute a key pricing parameter for the ‘Open Offer’ before it goes ahead and buys another 3% to trigger the ‘Open Offer’

Corporate Governance dictates that there should be full Transperancy  and a level Playing Field for all Investors…..Clearly some know more than the rest of us and are acting on it !

Many are making a mockery of many Issues here and taking a high Moral Ground….Trying to  shove a deliberately planned tweaking of the ‘Open Offer’ guidelines down our throats will only add to further distrust and disillusionment in the ‘Powers’ that are….It will be reverting back to a short sighted vision

Mr Varma,you state that the Takeover Guidelines should not be a ‘Free Lunch’ for the Minority Shareholders…….What ‘Free Lunch’  are you talking about !? Holding cost for Most is very very very High indeed in Satyam !

Yes,I do agree,Mr Varma,that takeover Norms should also be to facilitate Corporate Control and not just geared for Minority Shareholders….but this should not never be at the cost of Minority Shareholders !

If clearly any Information and assurances exist ,they should have been disseminated immediately to all so that all Investors,not just Larsen and Fidelity,could have bought Satyam at Rs 20 and Rs 30 and Rs 40 !…It’s past Rs 50 now !

Please Mr Varma…you have an excellent academic pedigree that should guide you in remaining clear of any vested external Influences that will only serve to cloud your Independent Thinking and Integrity in Views…you have reflected your calibre in the books you have authored and I keenly support a lot of your Thinking…but not this one ! on changing Takeover Norms to support Corporate Control…because I clearly  view this to be at  the cost of the Minority Shareholders and therefore a retrogade step

SEBI Takeover Norms were very thoughtfully and carefully and intelligently drafted,after taking into consideration a lot of Issues and Interests and Open Debate….How is it then that this ‘Liquidity’ factor eluded any consideration ?…Actually even this would have been deliberated and the sanctity of the overriding objective of Protecting Minority Shareholders upheld  

And I’m also amused at B K Modi of ex-Spice (Now sold to Idea) claiming on CNBC 18 that he wants to be fully transperant and clean in his buyout bid for Satyam…Where was all this transperancy and sanctity,Mr Modi when you made suckers of Investors in Modi Telefibres (earlier Modi Threads) and ModiLuft !?….Please spare us this ‘Holiness’ now….Your Companies are great cases that support my Blog Caption that ‘In India,Companies may fall sick,but Promoters rarely do !” …Better end here before I really get mad and fired up !

Knowing  how Ashish Dhawan, of Chrys Capital,cornered Suzlon shares (even became it’s Director !), with Ajay Relan of Citicorp as an ally and later sold off  some part to Government of Singapore… all at a dirt cheap placement price and all done before the Suzlon IPO, I was not really surprised at what he just came and said on NDTV Profit today on Larsen’s Bid for Satyam… I had blogged earlier on these Suzlon placements… Check out http://www.gauravblog.com/?p=393 

Ashish Dhavan thinks Larsen is courageous in aggressively pursuing Satyam when all others are concerned with the risks !… Ashish,should we not be concerned with the risks !,especially when they are clearly in the high risk category ?… or, like you possibly had in Suzlon, and in your gameplan, made a killing of Thousands of Crores at the expense, I daresay, of Indian Investors, do you too, like perhaps Larsen does, have some price sensitive Inormation on Satyam’s contingent liabilities, that we do not !?… On what basis are you defending Mr A M Naik and Larsen in their bid for Satyam !?… they’re, in all probability, merely trying to save face on a ‘mistake’, probably by making another one ! 

Is Larsen Courageous or Foolish in increasing it’s stake to 12% in Satyam? Check an earlier blog on this.

I have been receiving serious queries from friends, relatives, acquaintances, clients and associates on Satyam and Larsen…. In light of what has happened and is happening and will happen should we Buy, Sell or Hold Shares of these two Companies !?

Really Ironic and Amusing that as Larsen averages a rising Satyam to save face and reduce it’s high holding cost, you want to average a falling Larsen for the same reasons !

Let’s take one Company at a Time

SATYAM

Along with it’s Promoter,Ramalinga Raju,Satyam’s Share Price too fell from Grace to levels of Rs 15 from Rs 225 in mid December… It’s been rising since, to Rs 52 today, as Larsen keeps making a strong pitch to buying it out and has already committed Rs 600 crores for a 12% Equity Stake

I had strongly warned you to sell off Satyam in my Dec 17, 2008 Blog at Rs 162 just a day after the Maytas proposal was announced by the Satyam Board and withdrawn overnight… stating that the share price will sink further and that Ramalinga Raju was a Goner !… This was much before he made his confession on January 7, 2009 

At Rs 52, Satyam is reviving with Larsen support… If you wish to Hold or are even contemplating Buying Into Satyam, then be cautioned that you have to take the risk like Larsen is doing, in assessing that Satyam will bounce back and the Hundreds of Millions of Dollars of Contingent Liability on account of Class Action Law Suits in USA  will not materialise… Larsen seems confident… I don’t… Maybe they know something I don’t… refer to earlier Satyam and Larsen blogs for more on this !

So would I sell Satyam at Rs 52… At Rs 15, I would have taken the risk to Hold but now at Rs 52, I would begin offloading in tranches… but then again my risk profile may not be yours and you may be willing to take the Risk that Larsen is taking by Investing in Satyam

LARSEN & TOUBRO

It’s ,without any doubt,India’s Super Icon of Success and Scale…Of course it should be in your Equity portfolio

Problem is that most of you already hold this Share at a high Holding Cost of nearly Rs 2000… In the macro meltdown in 2008, Larsen had sunk towards Rs 800… However after it disclosed that it had purchased 3.95% Equity Stake in Satyam between December 23, 2008 and January 6, 2009 at an average of Rs 174 and after the Maytas Proposal Fiasco, It’s Share Price has sunk to below Rs 650 as market and shareholders clearly disapproved of this continuing ‘Mistake’ of Investing in Satyam.

So as Larsen Averages into Satyam, should you average into Larsen !?…. Don’t be in any Hurry, is my advice… Continue to Hold Larsen, It’s India Growth proxy…. Don’t sell Larsen… but don’t be in any hurry to average your High Cost Holding by purchasing more of Larsen… However if you are strongly inclined to Buy Larsen, then may I suggest, like I have advised selling off Satyam at Rs 52 in tranches, you could ease into purchasing Larsen in tranches too… in that don’t buy the full quantity of Larsen that you have planned in just one day…. In this way atleast you don’t miss the Averaging Boat in case Larsen does not fall significantly from Rs 650 levels.. and also benefit by buying some quantity at lower cost in case it does

Does that answer all of you satisfactorily… all those who were searching for some clarity on Investment in Satyam and Larsen ?

Cheers and Best of Luck  too to all of you on your Satyam and Larsen Investment Strategy!  

This is a gist of the Conference call that Larsen organised today to justify and clarify the 12% stake in Satyam

• L&T management clearly stated that L&T is no longer just an E&C company. It’s businesses span a range of activities in manufacturing as well as services, including heavy engineering, manufacturing,  power, process engineering and financial, IT and engineering services.
•  L&T Infotech, with revenues of US$400mn in FY08, has been in the IT services business for 10 years and hence, the acquisition of a stake in Satyam is not an unrelated diversification for L&T.
• L&T acquired the 1st tranche of 3.95% stake in Satyam after the announcement and subsequent cancellation of the proposed acquisition of Maytas Infra and Maytas Properties by Satyam, but before the news of fraud by Ramalinga Raju was announced. The average market price of Satyam at which the stake was acquired was Rs 174/share.
• The 2nd round of acquisition of ~8.09% was completed on January 23, 2009 at an average price of Rs 34.share. L&T now holds a 12.04% stake in Satyam, at an average price of Rs80/share.
• The initial stake was acquired with an intention to form a strategic alliance with Satyam for targeting clients jointly, especially in areas where L&T Infotech and Satyam were competitors.
• On disclosure of the fraud by the ex-Chairman of Satyam, L&T decided to increase its stake with a view to preserve the value of the already acquired stake and to have a say in any major action the new Board of Satyam would decide about the company’s future
• L&T’s decision to acquire the additional stake was based on its assessment (and feedback from various stakeholders in Satyam) of Satyam’s demonstrated track record, trained manpower and valuable client relationships.
• L&T believes that major clients are unlikely to terminate contracts for two reasons – one, most clients are satisfied with Satyam’s services and would likely continue if issues of governance etc are addressed wby the new Board and two, the prohibitive costs of transition to new vendors.
• L&T’s decision to increase its stake was also in part, influenced by the knowledge gained that Satyam did not have any debt on its books and all its properties were mortgage free and that Satyam has in its possession, 250 acres of land with clear titles.
• On potential/contingent liabilities, L&T management is reasonably confident of no material impact of the UPaid case on Satyam. However, the management is yet to assess the impact, if at all, the class action suits filed against Satyam in the USA.
• L&T has acquired the 12.04% stake in Satyam through L&T Capital, which is the designated vehicle for acquisition of all such strategic stakes.
• The other strategic acquisitions made by the company in the recent past include NIIT Technologies (~5% stake to access markets in Europe where NIIT has a strong presence) and Kalindee Rail Nirman Engineers (~14.5%, to leverage Kalindee’s capabilities in EPC and allied services for Railways).
• The management clarified that the Satyam acquisition, being strategic in nature, L&T Capital will not be providing for any MTM losses in its books.
   
  

An immediate Scenario comes to my Mind ! and Questions on this too!

Mr Naik,you stated today that with 5% to 6% that you had in Satyam and Ramalinga Raju’s 5% to 6% you both can venture together for more Business….. Questions that arise

• From who have you bought the initial 3.95% stake in Satyam?
• Was this acquired stake the pledged shares of Ramalinga Raju and other promoters !?
• In this case did you or anyone in Larsen & Toubro Group talk to Ramalinga Raju or other promoters or even to the Lenders to Raju before you acquired this stake !?
• Were you given this assurance of a joint venture or marketing for Clients by Ramalinga Raju or Satyam or anybody representing them!?.. surely it could not be a unilateral thought from only your side!… if there was a dialouge then it is obvious you were being falsely led to believe alot of things and given fradulent assurances for them
• If you have acquired the Pledged Stake then do you not realise that Ramalinga Raju and his co-promoters stake will go down by this extent of 3.95% to a very minimal Percentage !?, in which case how can you state that both of you would be holding 5% to 6% and venture for new clients together !?
• Did Ramalinga Raju actually await the closure of this sale of 3.95% Satyam Stake to Larsen by January 6,2009 before confessing to Fraud on January 7, 2009 ?  

The More I look at it, it clearly seems that Larsen actually bailed out Ramalinga Raju by buying 3.95% stake at an average of Rs 174 ! Why !? 

Also you state, Mr Naik that you are taking a calculated risk by increasing stake to 12% in Satyam… Larsen is a strong core Indian Icon… why does it need to take such a calculated risk now!?… Can’t Larsen await some clarification on the Class Action Lawsuits filed in USA before commiittng more and more Hundreds of Crores to Satyam?

While Satyam has soared by 20% to Rs 46 today on the back of Larsen support, the Share Price of Larsen has turned even more negative to Rs 633… I reiterate, Mr Naik, as I did in my Blog on January 24, 2009 on Larsen and Satyam, please don’t make Satyam an Ego Issue and don’t keep on pouring good Larsen monies after Bad !… unless you are able to assess with a great degree of certainty and comfort, the quantum of claims that may arise because of the US Class Action Suits against Satyam