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

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January 19, 2009

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 !


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 

Jaiprakash Associates : Executive Chairman,Manoj Gaur does not know the Debt to Equity quotient !

Was shocked to hear this morning on CNBC 18,Executive Chairman of Jaiprakash Associates,Manoj Gaur,confessing he was not aware of the Debt to Equity quotient in his Company ! On earlier being asked as to how much cash was there on the Books,he quickly stated “Rs 1500 crs”

Mr Gaur,who’s running your Company if you’re not !?

Mr Gaur,you are the Promoter’s son entrusted with running the Group and it does not bore well for those stakeholders who are riding with you, that you are not aware of the Financial leverage in your company in these credit contraction times !

You now want to explore Merger of your Power Companies…earlier you wanted seperate IPOs for them…Thank God your IPOs did not take place…they would have obviously come at high obscene premiums in bullish times and made suckers of Investors

Yes, you boast of building Assets of National Importance and achieving a Turnover of Rs 10000 crores in the watershed year of 2010…but at whose cost !…ask your shareholders !…it’s one thing to preach,like you do,that you follow three principles,that whatever you do should add value and serve your bankers,clients,employees and satisfy shareholders…it’s another to put this into practice !

One more piece of sincere advice for you,Mr Gaur…just stop claiming you’re a responsible Corporate Citizen..action speak louder then words…just recall how you cornered Rights Shares in the 1990s,denying allotments to genuine shareholders on flimsy pretexts…or how you allowed a large number of Imported cars to be parked at your Jaypee Greens Complex,hidden from all, when the scandal broke out of how Such Cars were imported  to ostensibly serve Tourism Needs and hence were not subject to High Import Duties,but were actually diverted for personal use by a host of Influential People

Markets have been unforgiving to you,Mr Gaur…..your Company’s share price has dropped over 90% in 2008 and is at Rs 68 today….Rs One Lakh invested in your Company in January 2008 is now down to below Rs 10000 inside a year ! The share Price will have to recover by over 1000 %,miracle if this happens, to recoup the loss…. Does this not tell you a stark fact !?…that shareholders dumped self serving promoter and manipulated scrips…now,don’t go blaming all the fall on deteriorating market conditions !

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