The Rajus of Satyam Computer who had painted a fantastic picture of their IT Services [we call it modern day slave trading] business appear to be skating on a thin layer of ice with global meltdown in BFSI segment. The company absolutely has no corporate governance.
The management came for a face saving exercise and decided to host an analyst call. We are presenting an excerpt from the same,
Rukhshad Shroff: I think that the deal is very well understood. I think we will just to have to disagree on the value prospect and if the businesses are so attractive and valuable, I’m entirely surprised why the promoters are parting with it when they own between 50 and 100% of this to minority shareholders given the growth prospects and the attractiveness of the business.
Hiding Accounting Firm’s Name – Ter*0rists of the Financial World:
Jayesh Shroff: I just wanted to know who were the valuers for this deal and why the management didn’t think of returning the money to shareholders rather than paying back to the promoters of the company?
Srinivas Vadlamani: The evaluations have been assisted by a Big Four firm.
Jayesh Shroff: I want the name sir
Srinivas Vadlamani: No, no, we will not be able to disclose the name, but Big Four firm has – have assisted us.
Who was taking your money from the deal ?
Jayesh Shroff: No, no, that means – I mean will this money go to the promoters of Maytas Properties or will this go to Maytas Properties?
B. Ramalinga Raju: This money will go to the promoters of Maytas Properties
Ramalinga Raju is shaken as his IT business is coming to an end:
Jayesh Shroff: No foreign investor in the country will track any Indian company after your move. Do you understand the implication of this move, sir?
B. Ramalinga Raju: See I – that means…
Most violation of the corporate governance practices, if you did – cannot see any opportunity in pursuing any acquisition or further growth in IT you should have returned the money to shareholders. You had no business, wasting money and paying back the promoters of Satyam and promoters of Maytas Properties.
Chetan Sehgal of Temepleton Asset Management wants to Block the Deal
Mr. Raju. First of all on behalf of Templeton, I would like to say that we are totally opposed to this decision. We think that the decision of doing a transaction with related parties will deplete Satyam Computer Services of tax resources. We do think that returning share, money to the shareholders was a better option. I think even if people, investors want to play the property theme or the infrastructure theme, they can do so as mutual funds and institutional investors. The point is that we do not want this decision to be taken and we are willing to go to any length to prevent this thing from happening. Apart from the odd ownership which you have
and the management opposition you enjoy in the company, there are also minority shareholders which are existing and we think that it will be in the best interest that Satyam withdraws this proposal.
If you want to rad the transcripts of the entire conference call, leave a comment here.