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.