GauravBlog Logo

A Lion’s eye on the Bulls and Bears

“In India, companies may fall sick, but promoters rarely do!”

Gaurav's Blog


December 17, 2008

Satyam joins a growing Dubious List of Self Serving Promoters that include Lok Housing,Sterlite and Jaiprakash

My Blog has this Tag Line on the Home page

” In India,Companies may fall Sick,but Promoters rarely do !”

How do we get Retail Investors to come back into our Stock Markets  when we have self serving Promoters running Riot with Shareholders Funds !

Satyam joins this growing list of Companies where Promoters take for granted all shareholders and are purely self serving…Check out earlier Blogs today for their blatantly immoral and outright unethical decsion that Satyam would buy out Promoter stakes in Maytas Companies

Markets have been truly unforgiving to such Companies…..Gandhis of Lok Housing,Gaurs of Jaiprakash Group,Agarwals of Vedanta Sterlite Group have all felt the ire of Shareholders for self serving decisions taken by them that violate norms of Corporate Governance…Their Share Prices have collapsed this year from 60 % to 95 %….Shareholders have thrown out their holdings after losing trust in Promoters

Rajus of Satyam too are on track to face such a calamity even though they have reversed this controversial decision overnight…The Trust is gone overnight too !…From Rs 225 yesterday,Satyam has crashed over 25% to levels of Rs 165

Another Danger is that even existing clients that Satyam Serves will not trust this Company and it’s Promoters easily again…The Impact of this could be severe loss of Business and Growth Prospects…New Clients will not be forthcoming

Also Employees will move away,being demoralised and demotivated by such unethical behaviour from the Promoters

So we should see an immediate exodus of Shareholders first followed by Employees and Clients in Satyam

Joke of the Day !…..Satyam has won several awards for Corporate Governance


Satyam has won the Golden Peacock Global Award for Excellence in Corporate Governance for 2008…..This award was given recently on September 23, 2008

Relations Global Rankings (IRGR) rated Satyam as the company with Best Corporate Governance Practices for 2006 and 2007.

It also won the Golden Peacock Award for Excellence in Corporate Governance from the Institute of Directors in New Delhi in 2002

One thing is for Sure….Satyam is unlikely to win any such recognition awards in the Future  after Founder Chairman,B Ramalinga Raju blundered big time in announcing the Maytas Acqusition yesterday…It was seen as a Bail-out for his Sons !…Even though he reversed the Decision overnight the Damage had been done….Check out an earlier Blog today on this

Satyam becomes Asatyam as Founder Ramalinga becomes Ravana !

Holding less than 10% of Satyam’s equity,Founder Chairman,B Ramalinga Raju,got a Board Resolution passed to buy out 51 % of the Equity in his Son’s Companies Maytas (Satyam spelled backwards !) Infrastructure and a 100% Stake in Maytas Properties for a whopping aggregate of US $ 1.6 Billion or nearly Rs 8000 crs !

As if Satyam’s Cash Reserves are his fathers properties to buy out those of his Sons  !

This is nothing short of a Financial Rape of All Shareholders of Satyam by it’s Promoters

Ramalinga became Ravana with just this one blatantly immoral and unethical announcement even though he has tried to justify it

Even though he reversed it overnight under severe Institutional pressure,he does not become Rama again !

What the hell were the Board of Directors doing when passing such an acquisition !?…Is there is no genuine Independent Director on Board !? Mr Raju says it was a unanimous Board decision

Have a look at the Satyam Board…There are Nine Directors,of which Five are designated as Independent and Non Executive Directors and include world reknown names of Vinod K Dham of Intel and Prof M RamMohan Rao,Dean of ISB….I do not know whether  these Directors were present at the Meeting that decided the Maytas Acquisition…The 2007/8 Annual Report states of Four Meetings held in 2007/8, Mr Dham attended one in person and participated through Video Conference in the remaining three … we can assume video conferencing facility continues in this Financial Year 2008/9 and that Mr Dham attended this crucial meeting too through Video Conference

Companies Act needs to be amended strongly to deny promoters holding such a low level of Shareholding (8.74 % in Satyam) to “siphon” off large funds of the Company (US $ 1.6 Billion or @ Rs 8000 crs ) through only a Board meeting without seeking shareholders approval through an EGM or at the AGM

Satyam has become Asatyam overnight and this morning it’s share price reacted 28% to drop to Rs 162

Shareholders were shell shocked and FIIs and Domestic Institutions were fast to condemn this moving out of cash of Rs 8000 crs from Satyam to it’s Promoters who own the Maytas Companies

Satyam is tarnished overnight and the trust lost in a day will takes years to regain,if at all…all because of Poor Corporate Governance and the daylight Robbery attempted to be committed by the Founder,B Ramalinga Raju also now known as Ravana

The basis for the US $ 1.6 Billion Valuation of Maytas Companies has not been disclosed,although Mr Raju came on TV and, was clearly uncomfortable when fielding questions, disclosed that a Big Four Accounting Firm’s help had been taken !….The Valuation is as huge as that of Unitech !…Could this Big Four Firm be it’s auditors,Price Waterhouse !?…if you recollect This same auditing Firm was banned by RBI for several years from auditing Banks after it’s disastrous Audit of Global Trust Bank where it failed to notice and therefore did not bring out the huge Financial Hole in the Listed Bank which led to it’s collapse. read more

Scroll to Top