Satyam daddy buys sons companies for $1.6B
First, an update on the grand daddy of all scams. The Congress Party led UPA government’s underselling of a national property by Rs 55,000 Cr is starting to attract eyeballs. Some “entrepreneurs” have become dollar billionaires in just a 6-9 months.
In the Rajya Sabha today, V Maithreyan of the AIADMK raised the issue of the scam. He was supported by CPM and BJP. Some correctly described the scam using the following phrases. “The greatest ever scam” (Maithreyan), “dubious companies which had nothing to do with telecom” (Tapan Kumar Sen), “scam has broken all records (Prakash Javedekar), “Very serious issue” (Sharad Yadav).
Nothing is going to expose Indias underbelly like this scam.
The media must strain every muscle to shield some people in the Congress. The Telecom minister has clearly said that both Prime Minister Dr Manmohan Singh and former Finance Minister and current Home Minister Mr P. Chidambaram were in the loop on all details. We have not heard a single word from these two gentlemen. As things stand – they are in on this !
Now back to the main post – about another “entrepreneur”
Today, another White Tiger proved yet again why Indians are the ultimate entrepreneurs.
India’s fourth largest IT bellwether Satyam Computer Services late Tuesday drew a barrage of criticism after it announced a decision to spend $1.6 billion (Rs.79.2 billion) to buy real estate and infrastructure firms run by the two sons of its founder-chairman B Ramalinga Raju.
Earlier, in a notification to the stock exchanges, Satyam said it would spend $1.3 billion (Rs.64.35 billion) to buy a 100 percent stake in real estate firm Maytas Properties and $300 million (Rs.14.85 billion) for a 51 percent stake in Maytas Infra.
The Hyderabad-based Maytas Properties is run by Rama Raju, the younger son of the Satyam founder, and Maytas Infrastructure by Teja Raju, the elder son.
Source : Expressbuzz
I am 80% certain that Satyam (NYSE: SAY) does not require shareholder approval to buy the two Maytas companies. We dont work like that here.
A side note (consider the following quote) :
“The buyout will de-risk the core business by bootstrapping a new business vertical in infrastructure. This market segment can mitigate the risks attributed to developed markets and traditional verticals that are likely to be impacted by the recessionary economy,” Ramalinga Raju said in a statement later.
Dear God ! Is this how IT high tech honchos talk ?
A clean-room-capitalist defence
Maytas companies are said to have a land bank of 6800 acres (thats right). Their fathers’ firm Satyam has cash balances amounting to USD 1.2 Billion. Both Satyam and the two Maytas companies are private companies. If one wants to buy the other, then why is Realitycheck’s heart burning ? Is RC a closet socialist ? If this is a bad move, both Satyam and Maytas will crash and burn. Either way it is the prerogative of the two private parties. There is no scam here – move on.
What is wrong with the above ? Any guesses ?
Answer in the comments section.
Trivia : Maytas is Satyam spelled backwards.