Scams Together: Satyam-Maytas-Metro Rail

The decision by Satyam Computers to acquire Maytas Properties and Maytas Infra had to be called off thanks to protests by shareholders. The speed with which Satyam tried to divert investors’ money to the two firms managed by the family of the promoter, B Ramalinga Raju, may have been prompted by the needs of the Hyderabad Metro Rail Project (HMRP), which was bagged by Maytas.

That the Satyam chief had only 8.5% share in Satyam and yet wanted to divert about 90% of the company’s Rs 6,240 crore of surplus liquid cash to a company run by his family speaks volumes for corporate governance. Satyam has so far not revealed the name of the firm that valued Maytas Properties at Rs 6,400 crore. Reports indicated that there are about 6,800 acres of lands which have been valued at Rs 1 crore per acre. Where are these lands? Why not disclose the details of their location and extent? One view is that the lands that Maytas is likely to get for several projects in the pipeline (but have not yet been conclusively awarded) are also included in this estimate. Since the leading auditing firms are all known to have denied involvement in valuation of Maytas Properties, it appears to be a clear case of convenient “self assessment”.