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Satyam Maytas deal not completely signed off
By siliconindia
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Wednesday, 24 December 2008, 16:24 IST
Hyderabad: Satyam Computer Services Maytas $1.6 billion or Rs 7, 568 crore deal has not fully been signed off. As only $1.3 billion worth deal for Maytas Properties was called off, whereas the remaining $300 million was to be paid for a 51 percent stake in Maytas Infra, said by T.R. Prasad, a former cabinet secretary and an independent Satyam Director.
"A proposal for acquisition was cleared by the board, but at what price, when and how was not decided," Prasad said. Prasad's comments challenge the continued arguments offered by the Satyam management, particularly its chairman Ramalinga Raju, that the transaction was good value for Satyam and was only abandoned because key shareholders fervently opposed it immediately after it was announced as the final decision by the company, reported Mint.
V.S. Raju, a former Director of Indian Institute of Technology, Delhi and another independent Director, Satyam said, "There were several suggestions from the board members regarding valuation and those were to be taken up during the due diligence process, which was yet to be done. Now that the deal has been called off, all such discussions are academic in nature."
After the 16 December board meeting, both Ramalinga Raju and Satyam's Chief Financial Officer, Srinivas Vadlamani claimed that the company had taken the advice of a so-called Big Four audit firm for the valuation.
Satyam called off the acquisition plan 10 hours after announcing board approval for the transaction on Tuesday evening, when its New York Stock Exchange-listed American depository receipts more than halved in value. While the Indian shares have recovered somewhat since, they are still down 28.3 percent since the deal was first announced.