Satyam-Maytas Scam : Revealing Minutes of the crucial December 16,2008 Board Meeting to discuss and approve the acquisition proposal

The Minutes of the Crucial December 16,2008 Meeting of the Board of Directors of Satyam to discuss and approve the Maytas acqusition proposal are now in public domain

Phew ! I read the Twelve pages of the Minutes and can only say this !

NONE IN THE BOARD WAS ABOVE BOARD !

The way the Meeting Progressed from 4 pm and the nature of the various presentations that were made and the Information and explanations given by Top Management and Working Directors…all actually provide answers to some very vital questions that are being raised on

  • Complicity of Ram Mynampati,President and Whole-Time Director who made a presentation on the need to diversify from just being a core IT Company…His contradictory stance and feigning that he was in the Dark can be countered strongly
  • Complicity of Srinivasu Satti,Head (Mergers and Acquisitions) and who made the presentation to explain and justify the Maytas Proposal…He had to know !
  • Complicity of V Srinivasa,CFO…his justifications,information and explanations were taken at face value by the Independent Directors,when some very very basic queries automatically come to the mind when you hear V Srinivasa….I’m sure Independent Directors too would have had such queries race through their mind…why did they fail to voice them ! ?  
  • Dereliction of Duty and Prior Awareness of Maytas Deal by each and every Independent and Non Executive Director…They failed to raise even basic queries on Structuring,Financing,Leveraging and Valuation of the Deal…Queries that they raised were simply too general and they failed to get into specifics,like they should have
  • Controversial Valuation of Maytas Properties by Ernst & Young and the existence of a Non Disclosure Agreement with them

I shall endeavour to blog and justify each point above seperately in the days to come 

I had warned you on December 17,2008 to SELL SATYAM AND MAYTAS as they would sink further !

I confess,I did not anticipate this bombshell confession of Satyam Promoter,Ramalinga Raju on January 7,2009 which saw the Satyam price Collapsing from Rs 175 to Rs 40 on the same day

However,after Ramalinga Raju,had announced on December 16,2008,the now infamous Satyam’s Proposal to take over Maytas Companies,I had blogged on December 17,2008 to SELL SATYAM AND MAYTAS as they would sink further

The Blog was titled

Satyam becomes Asatyam as Founder Ramalinga becomes Ravana !

Click on http://www.gauravblog.com/?p=413 for full earlier blog,of which some relevant extracts are as below

Shareholders should get out of both,Satyam and Maytas Infrastructure …Both will sink further as it becomes clear and is established that this was not just a Diversification planned by Satyam,but it was a blatant bailout attempt by a Father of His Sons 

Mr B Ramalinga Raju, you’re a Goner !

Hey! Is Times of India Reading My Blogs ? Headlines Today: Did Raju tip off big lenders?…Blogs on Thurs,Jan 8 and Fri, Jan 9,2009 raises this Issue

Hey ! Times of India’s Mumbai Edition has this Headline Today

Did Raju tip off big lenders ? 

Thanks TOI….you reach out to Millions…..I raised this Issue too on my blog on Thursday,January 8,2009…Check it out Below

http://www.gauravblog.com/?p=426

 

NOW TWO MORE SERIOUS QUESTIONS EMERGE IN THIS SORDID SATYAM SAGA UNFOLDING!

Now Two More Serious questions need to be answered in this continuing Satyam Saga !

QUESTION NO 1

DID RAMALINGA RAJU INTIMATE LENDERS TO SELL HIS PLEDGED SHARES BEFORE RELEASING HIS CONFESSION LETTER TO REALISE A BETTER PRICE TO CLEAR MORE OF THE LOAN ? 

OUESTION NO 2

NOW WE KNOW WHY THE MAYTAS PROPOSAL WAS STRUCTURED THE WAY IT WAS ! QUESTION IS WHICH ‘BIG FOUR FIRM ‘ CONNIVED WITH SATYAM TO BRING UP THE VALUE OF THE MAYTAS DEAL TO US $ 1.6 BILLION ! TO MATCH THE SATYAM ASSET HOLE ?

Also raised the worry on my blog on Friday,January 9,2009 that Larsen’s Fatal Investment in Satyam from December 23,2008 to January 6,2009 could be their lifting the same Promoter pledged shares sold by lenders

Check it out on

http://www.gauravblog.com/?p=431

 

Larsen Jumps the Gun in Buying 4% into Satyam and sees Big Erosion of over 85% and over Rs 300 Crs inside just Two Days !…they must file an FIR against Satyam and it’s Chairman,Ramalinga Raju

Larsen was probably ill advised to buy a 4% Stake in Satyam at undisclosed price…Definitely over Rs 100 asY.M. Deosthalee told Dow Jones Newswires by telephone that the company acquired the stake over ten days ending Tuesday through its L&T Capital arm.

Larsen now holds close to 2.70 crore shares in Satyam at Investment cost of over probably  between Rs 350 crs to Rs 450 crs….On Wednesday,January 7,Satyam opened at Rs 175 but closed at Rs 40 after Ramalinga Raju’s Confession of a massive Fraud…Today Satyam has sunk even lower to Rs 20…Larsen’s holding in Satyam is worth just Rs 54 Crores inside days…It has lost over 85 % and @ over Rs 300 crs notionally inside two days !…it will have to mark the investment to market

There is also the grave posssibility that L & T Capital may have picked up the same 4 % of Equity sold by the Lenders to Ramalinga Raju on his pledged shares…If this is so,then Ramalinga Raju may have awaited this sale at High Prices before releasing his Confession Letter on January 7,2009

Larsen must not let Satyam and Ramalinga Raju get away with this ! 

The Share Price of Larsen has also eroded by 15% to below Rs 700 in quick time

NOW TWO MORE SERIOUS QUESTIONS EMERGE IN THIS SORDID SATYAM SAGA UNFOLDING!

Now Two More Serious questions need to be answered in this continuing Satyam Saga !

QUESTION NO 1

DID RAMALINGA RAJU INTIMATE LENDERS TO SELL HIS PLEDGED SHARES BEFORE RELEASING HIS CONFESSION LETTER TO REALISE A BETTER PRICE TO CLEAR MORE OF THE LOAN ? 

This is very much posssible as the Promoters Holdings was 8.61 % on December 16,2008 when Satyam announced the controversial Maytas Takeover Proposal but has since dropped to below 4%…It so transpires that promoters had pledged their shares to raise funds…Ramalinga Raju claims in his confession that the understated  Liability of Rs 1230 crs in Satyam is on account of his raising funds for the Company against his own Shares !

Lenders have sold these pledged shares post December 16,2008….Question arises as to whether the disgraced Ramalinga Raju pre-warned the Lenders to selloff before he released his confession letter yesterday morning…This would have got the Lenders a better price as Satyam share was murdered yesterday from Rs 175 to close at Rs 40 on release of the Confession Letter

Another Thought !…If Raju claims he arranged Rs 1230 crs for Satyam against his shares then what was the accounting entry passed in the Books of Satyam for this ?…as Monies should have come into Satyam,the Debit obviously would have been “Bank” but where was the Credit given for the Double Entry ?…If it was ,as it should have been,given to the Lenders to reflect their Lender Status in the Books then where is the understatement ?…..Understatement arises only when the Credit was not given to the Lenders but to some other Accounting Head…It cannot have been a Single Entry…Books would not have tallied !….What the hell were the auditors Price Waterhouse doing ? How did these entries escape them in both Substance and Form ! ?

I want to know where the Credit was given in the Satyam Accounts for such funds as Raju claims were arranged by him against his shares !   

OUESTION NO 2

NOW WE KNOW WHY THE MAYTAS PROPOSAL WAS STRUCTURED THE WAY IT WAS ! QUESTION IS WHICH ‘BIG FOUR FIRM ‘ CONNIVED WITH SATYAM TO BRING UP THE VALUE OF THE MAYTAS DEAL TO US $ 1.6 BILLION ! TO MATCH THE SATYAM ASSET HOLE ?

IF INDEPENDENT DIRECTORS WERE IN THE DARK,THEN WHEN THIS MAYTAS DEAL WAS PROPOSED AT THE BOARD,THEY SHOULD AND WOULD HAVE IMMEDIATELY QUESTIONED WHY ALL SATYAM CASH WAS BEING USED AND WHY THE DEAL WAS BEING ROUTED THROUGH SONS OF SATYAM PROMOTER RAMALINGA RAJU AND NOT DIRECTLY GIVEN TO MAYTAS !…AT THIS STAGE THESE GREAT ACADEMICS,PROF KRISHNA PALEPU OF HARVARD,PROF RAMMOHAN RAO,(DEAN OF ISB) AND DR MANGALAM SRINIVASAN AND INTEL ICON, MR VINOD DHAM WOULD HAVE REALISED THE DUBIOUS REASONS FOR SUCH A STRUCTURING AND THE CRIMINALITY THAT WOULD STAND EXPOSED…THEY SHOULD HAVE NOTED THEIR DISSENT IN THE MEETING !

read more