Satyam has value left
There is no value left in Satyam!
That is what I wrote on 8 Jan 2009, one day after the startling revelations made by Mr. Ramalinga Raju about the accounting fraud committed by him over many years.
However, the Government appointed directors have succeeded in infusing confidence with various stakeholders of the Company in the past three and half months culminating in Tech Mahindra emerging as the Company taking over the operations of Satyam Computers at Rs.58/- per share, each having a face value of Rs.2/-.
Presumably Tech Mahindra is seeing value in the existing businesses, clients and associates of Satyam and is taking a calculated risk on the till now unknown depth of the accounting frauds – most likely ignoring them as past. It is a brave decision for Tech Mahindra to buy out Satyam and is good for all the stake holders of the beleaguered Company.
The fact that a corporate house has found reasonable value in Satyam as a business entity has proved my original theory wrong, I have no shame in admitting that I was wrong.
However, it remains to be seen how Tech Mahindra takes this business forward and hopefully this will not become a drag on Tech Mahindra’s own resources or jeopardize the interests of its own stake holders. I will wait and watch!
I take this opportunity to congratulate the Indian Government (Ministry of Corporate Affairs and Ministry of Finance) and the special directors for the methodical rescue work.
I especially feel proud that the Indian Government saved this Company (and its 40K plus employees and their families) from going down under without parting with public money in the form of Government subsidies or grants.
This will also instill some confidence amongst the procurers of Indian IT services.
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But Sathyamurthy this should not encourage so many other Rajus who are yet to come out with the truth.
I too feel proud that the Indian Government has saved 40K families.
Fantastic job by the special directors.
I am having serious doubts about the management of Tech Mahindra. On what basis they have come to the value in a company like Satyam where accounts have been fudged for several years. They do not know the exact extent of liabilities and there are several cases pending against the company both in India and in the US. The accounts are yet to re-stated and already there is a value assigned by Tech Mahindra – what a magic – it defies all logic and i am totally bewildered by this development. God Save Corporate India.
- T.P.Anand
Anand,
I personally feel all the cases against the Company in India and US can be vacated because the fraud is not by the Company but by an Individual. We both have the knowledge that A Joint Stock Company is a artificial person which is different from the individuals who are shareholders or the managers.
I think Tech Mahindra would have done its home work before this acquisition, especially considering the efficiencies they can bring in as well as the continuing income streams from the clients of Satyam.
What is the update on this….. Any new developments???
The best update possible is from Andhra Pradesh people. They have elected back Rajasekhara Reddy, said to be part of the scam as he had helped Ramalinga Raju amass wealth (projects awarded to MAYTAS) as well as delayed the arrest of the ex-Satyam CEO.
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