Satyam pack of lies crumble

The Satyam mountain of lies crumble in face of evidence.  As per Ramalinga Raju, a big 4 consulting company had advised the management on the Satyam-Maytas deal.  All the top 4 consulting firms (Pricewaterhouse Coopers, Deloitte, Ernst & Young and KPMG) have now denied being a part of the deal.

Satyam’s valuation of unlisted Maytas Properties is turning out to be a whodunit. The big four audit firms have denied any role in the
generous valuation of the private company owned by the Raju family. Satyam’s abortive attempt last week to acquire Maytas has turned into a blazing corporate governance controversy.

Satyam had said that one of the big four audit firms was the advisor to the board. And, based on this report, the board had proceeded with the acquisition of privately-owned real estate company of the Rajus for $1.3 billion (about Rs 6,240 crore).

In an email to ET, an E&Y spokesperson said, “I would like to reiterate that Ernst & Young was not involved with the Satyam-Maytas transaction.” ET received similar responses from PwC, Deloitte and KPMG. ET interacted with the spokespersons of PwC and Deloitte, while the KPMG spokesperson responded through an SMS.

Then, who valued Maytas? Satyam did not reply to an email asking the basis on which the land bank of Maytas Properties was valued at Rs 6,400 crore or Rs 1 crore per acre.

Real estate brokers said the valuation was done when the prices of land on the outskirts of Hyderabad was below Rs 10 lakh an acre due to the slump in real estate prices.

“Maytas Properties has three upcoming SEZs in Hyderabad and most are in the development phase. The firm also has properties in Nagpur, Chennai and cities in Andhra Pradesh such as Vizag. Putting these properties together, the maximum valuation could be Rs 3,500 crore.

Considering current market conditions, even this valuation may be a little extreme. But a valuation of Rs 6,240 crore is completely over the top,” a senior official with a leading property consultancy firm said.

An independent Satyam director had earlier told ET that the board relied on E&Y’s advice, something that has been denied by the audit firm. Satyam had to reverse its decision within 12 hours following protests by its investors across the world. Despite the cancellation of the Maytas transaction, the shares of Satyam crashed 33% to end at Rs 163 on the Bombay Stock Exchange on Friday.

Above news from: Economictimes

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No comments

  • Mahesh

    Will anybody (Media, government, regulatory bodies) look at Raju’s illegal and certainly unethical actions going as far back as 2000?

    Ask any senior IT executive who has worked in Chennai / Hyderabad about the Satyam Renaissance Consulting fraud? It may ring a few bells.

    Donating 2 cents to charity for each illegal dollar you have accumulated does not absolve you of your deeds, Raju.

  • Sidharth

    Hi Mahesh
    Could you explain what was the fraud in Satyam renaissance consulting? I know a few people who worked for this company and this company was doing the quality of work which was unheard of in Indian Consulting industry at that time.
    Pls enlighten, if you can

  • ramarao

    Satyam group and its promoters are trying to eat away general public money. ONe Mr. Jayaraman and Deepa Jayaraman, key persons behind the whole scheme of investing Satyam’s funds in Maytas Infra and Maytas Properties are trying to devise further schemes for Satyam promoters unjust enrichment.

    Some time back, income tax department also made efforts to unearth several issues of this Satyam. HOwever, Sathyam promoters managed the show and efforts of IT people were put to end by another set of IT (information technology).

  • Mahesh

    Hi Sidharth,

    Google Satyam Enterprise Solutions and you can read the whole story in detail on several blogs. Since you claim to have worked in Renaissance, are you aware of how much Prabhat and his gang have siphoned over the years from Satyam?

    This is old news. Latest is the World Bank Fiasco which is something that happened over a long period of time. This fraud was actually designed and executed by Mr. Ram Mynampati and his direct report Raj Asava. I have spoken to several Satyamites who confirm that there are emails linking several senior executives like T. Hari, Prabhat and Shailesh directly to this fraud.

    It is only a matter of time before this trickles out slowly.

  • KluFlux

    this Mahesh seems to be a clown!! all folks in any consulting company that they have formed, would make money. How can they siphon-off something which is their own (between the various investors in the first place).
    Making money out of a business at the right time is intelligence (like Hotmail, Orkut etc)…it is not fraud.
    Private blogs and opinions cannot be placed as an evidence against somebody.
    These people Mahesh claims to have spoken are all phoney and if it is anything worth to go public, why is it a matter of time? Publish it to the SEBI folks — they would take action. Pass it on to the World Bank folks and US government SEC, they would nail the culprits. All these dont happen because these allegations are absolutely false and baseless.
    Go, have some sleep and start thinking sober — Satyam is a company which has been portrayed an underdog and constantly delivered on its results. Even in this case of turmoil, it still is considered a good-buy. The people who run are not nuts to amass 5400 crores INR if they were incompetent and siphoning off.
    If the investment was made in another company like say DLF or some other ABC then the noise would have died down a few days later but since it was Promoter owned, the parties with personal interests are creating noise.
    Allow satyam to run its business, it has been and will continue to make money for India in Software Services, whether one likes it or not 😛

  • sunitha

    Hi,
    Am a journalist based in Hyderabad and am tracking developments related to satyam. Am just curious to know who this Mahesh is? can anyone provide me his contacts please?

  • Anonymous

    Even a dumb extinct DoDo would have found such details in a Balance sheet and PwC was sleeping.

  • Mohan

    KluFlux used harsh words calling somebody a clown and lauded Satyam for being intelligent!

    After the current disclosure of fraud, what will be the comment?

    God bless people who still believe corporate governance!