It made sense to acquire an infrastructure company. Maytas does have same work culture and philosophy and hence the merger will be smooth.
The commonly-held suspicion of wrongdoing pertains to a conflict of interest, but the management maintains that the move was aimed at enhancing shareholder value.
Though the controversial Satyam-Maytas deal has been called off, regaining investor confidence will be an uphill task.
Following is the chronological summary of events which saw IT major Satyam Computer Services, founded in 1987, on its path to disaster:
"Now it is more of a corporate governance issue projected by the investor community and the media. Whatever we have done, is well within the powers of the Board of Directors," NYSE listed Satyam CFO Srinivas Valdamani told PTI. The deal was touted as something that would help Satyam diversify its business, especially when there was slowdown in the IT business in key markets such as the US and Europe.
Satyam Computer Services founder B Ramalinga Raju had made trips to the Indian School of Business in Hyderabad, to Visakhapatnam and even the United States, to convince the independent directors on the his board for acquisition of Maytas Infra and Maytas Properties, the two companies promoted by his family members.
Acquiring Maytas Infrastructure could be his chance to show his organisation's ability to think big.
The inspection would be conducted as per the provisions of section 209A of the Companies Act, corporate affairs minister Prem Chand Gupta told reporters on Thursday.
Satyam Computers' independent directors are mounting pressure on founder B Ramalinga Raju to reveal details of the controversial board meeting that proposed the acquisition of two promoter-related companies, after a director resigned yesterday owning moral responsibility.Directors want Satyam's founders to make public the minutes of the meeting at which around Rs 5,500 crore of the company's cash was proposed to be paid to acquire Maytas Infra and Maytas Properties.
JV formed for Saudi infra projects, focus on contracts from other countries as well.
More trouble may be brewing for the beleaguered Satyam Computers with a Texas district court scheduled to hear on January 7, a case filed against the IT major by a small British mobile solution firm, Upaid, over the Maytas deal.
Breaking his silence on the embarrassing developments over the last two weeks, Raju said in an open letter to employees that 'please be assured that the Board and the leadership team are doing everything that's possible to get Satyam back on track'.
Satyam Computer Services did not consult Mendu Rammohan Rao, dean of the Indian School of Business and an independent director on the board of India's fourth largest IT services provider, when it called off the deal to acquire Maytas Infra and Maytas Properties following shareholder protests. Rao had chaired the board meeting that endorsed the company's proposal to buy the two firms linked to the family of Satyam's founder and chairman B Ramalinga Raju.
Interestingly, mutual funds had increased their holdings in Satyam to 38.6 million shares in December, after its controversial proposal to acquire promoter-family firms Maytas Infra and Maytas Properties was blocked by institutional players. Fund managers believed then that Satyam was available cheap. However, on January 7, Ramalinga Raju delivered a fatal blow by declaring he had fudged the company's balance sheet for seven years.
While the lender has Rs 17,000 crore of retail assets and land parcels in Juhu, Borivali, Worli, and Chembur in Mumbai, there may be a disconnect between the quality of DHFL's books and the value bidders ascribe to it.
Get worried when a company proposes something unusual and exit if you are not sure.
The latest penalties for insider trading follows an earlier disgorgement order passed by Sebi in July last year.
The government is awaiting reports from the ED and the US agency before deciding whether or not accounts of the Ramalinga Raju family-promoted Maytas firms need restating.
On February 17, 2009, Satyam case was handed over to CBI.
The government's ambitious highway projects under the public-private partnership mode are in serious trouble. Construction companies have either not put in bids or have withdrawn from 20 such projects, which fall under the build, operate and transfer scheme.
Senior officials from different ministries, including finance, home affairs and defence, would be attending the meeting. The last BOA held on August 11 had allowed Maytas Ventures, promoted by the disgraced former Satyam chairman B Ramalinga Raju's son, to surrender its biotech SEZ and approved three new proposals, including that of Brooke Bond Real Estates IT/ITES tax-free enclave in Karnataka.
Out of the total dues, Satyam Computer, which has now been re-branded as Mahindra Satyam, alone owes a hefty Rs 532 crore (Rs 5.32 billion) to the Income Tax department
The process will be initiated on July 16 and completed by November 15, according to state municipal administration minister Aanam Ramanarayana Reddy. Last week, the state government cancelled the contract awarded to Maytas Infra-led consortium after it failed to tie up funds despite a three-month extension. Maytas Infra is promoted by kin of disgraced Satyam founder B Ramalinga Raju.
The housing finance regulator National Housing Bank on Thursday said it was collecting information from housing finance companies about their exposure in group entities of the scam-tainted Satyam Computer Services.
In a filing to the stock exchanges, Satyam said that the technology research firm had in its December 18, 2008, report asked organisations to adopt the software major's innovative business strategies. However, the latest Forrester report on December 31, said that its software business associates need to review dependence on Satyam Computer to safeguard themselves in case the IT major is sold.
Terming a search and seizure operation conducted by the Income Tax department as a 'serious invasion of the privacy and freedom of the citizen,' the Delhi high court has said that such exercises cannot be a 'roving or fishing exercise' by the department.
Citigroup's India-born chief Vikram Pandit has found a place among the 20 worst ever CEOs in America, but the top honours has gone to bankrupt Lehman Brothers' Dick Fuld.
Surely, the time for introspection for Sebi is right now. The lessons from l'affaire Pyramid are compelling for Sebi. It comprehensively exposes the workings within Sebi and its organisational weakness. It quickly needs to puts its house in order.
The ministry has asked the RoC to submit within three weeks reports of the Satyam-Maytas deal and the details involved. For this, the ministry could even waive the condition of a minimum 10 per cent of shareholders required for moving the CLB with complaints.
Unlikely to launch formal probe into IT firm's Maytas move.
T R Prasad, independent director on the Satyam board, defended the decision to acquire the two Maytas firms, and said that the purpose was to create shareholder value. "We looked at it and according to our best judgment we thought the decision was in the long-term interest of the company," Prasad told Business Standard.
By entering into related-party deals without shareholder approval, the firm has done irreparable damage to India Inc's reputation. Minority shareholders of Satyam Computer have every reason to feel short-changed. Without so much as by your leave, the management has decided to enter into related party transactions using the company balance sheet.
The family of B Ramalinga Raju, the main accused in the multi-crore fraud at Satyam Computer, has approached a local court seeking a direction to de-freeze bank accounts and return seized electronic items.
Work on the Hyderabad metro rail will begin by May next year and some sections will be opened for traffic by March 2014. The entire project will be completed by end of 2014.
This is the second project in the country in which a metro rail project is being undertaken through a PPP model after the 71-kilometre Hyderabad metro project was won by Maytas Infrastructure. According to industry sources, infrastructure major Larsen & Toubro had also initially shown interest for the project, but backed out finally.
Talks of a possible merger or takeover will not have credence for a while
Andhra Pradesh Chief Minister Y S Rajasekhara Reddy on Sunday said that there was no obstacle in any law enforcing agencies, including CBI, inquiring into the Satyam fraud despite CB-CID registering a case.
Former economic affairs secretary E A S Sarma has written to the Securities and Exchange Board of India questioning the delay in investigating Satyam Computer even after he had alerted the regulator 'well in advance' about certain irregularities in the company's books of accounts after the Maytas deal was called off last month.
"I wrote nearly eight letters to Sebi alerting them about Satyam's fraudulent practices and the company's connivance with local politicians but none of the letters elicited any response from the regulator. Sebi remained silent about the issue even while I mentioned to them that MCA launched a fact-finding probe. But the fact is that the MCA probe too was very slow and only on paper," Sarma said.
In the case of Satyam Computer Services, L&T had acquired 8 per cent stake after the company's founder B Ramalinga Raju admitted to fraud, and had demanded representation on the company's board. The plea, however, did not find support. The promoters of Maytas had pledged shares with the two institutions and Sicom to raise funds.
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