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 …..so 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.
Mr Raju,if you feel the IT Space is not where you want to put further monies,then why don’t you return Cash Reserves to Shareholders as Dividends which are Tax exempt in their Hands !?
In 2000,it was my firm belief then that, Satyam Infoway (SIFY) overpaid for another acquisition of Rajesh Jain’s IndiaWorld when it paid US $ 116 Million in a cash and stock deal….there was strong suspiscion at the time that probably some of this money paid found it’s way back !
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 Raju,even if you felt diversification into Construction was a good strategy to derisk Business from core IT Space…two questions that simply reveal your malafide intentions….
Why Invest so heavily in your own Family and Friends Maytas Companies ?……You say Maytas holds 6800 acres of Landback and also has an order book position of US $ 2.5 Billion….but is this not true that you are referring to this order……Maytas has bagged the Rs 12000 crs Hyderabad Metro Link Contract….It is finding it difficult to raise Monies to execute this
Why a Secondary Deal ? ……. You could have infused fresh equity in Maytas so that monies went to the Companies instead of buying out your family and friends’s stakes and thereby routing Satyam’s Cash directly into their hands ?
Mr B Ramalinga Raju, you’re a Goner !
Just a last point…it’s just a coincidence that another Raju,K S Raju,the Industrialist Doyen from Andhra Pradesh who heads the Nagarjuna Group of Companies,has been arrested and remanded to judicial custody till December 29,2008 alongwith another of his Directors,PK Mahadevan…the charge is that one of his Companies,Nagarjuna Finance has defaulted in repaying over Rs 100 crores of Fixed Deposits placed by the public and shareholders in it.
Phew !…just stay away from AhmedaBAD and HyderaBAD companies !…Most Listed Companies from here are formed and run purely to serve the interests of promoters…for the Promoter,by the Promoter and Of the Promoter…..with an exception here and there