Satyam board's minutes details Maytas decision

Coinciding with the meeting of the new board of Satyam, the minutes of the December 16 meeting of the now disbanded board today became public, detailing the unanimous decision to acquire two Maytas firms that proved to be the nemesis of the IT company's founder Ramalinga Raju.

During the course of the meeting last month, Satyam's then Chief Financial Officer Vadlamani Srinivas informed the board that the valuation of Maytas Properties was done by Ernst & Young, but the global accounting firm disputed the claim.

According to the minutes, members noted the imperative of infrastructure foray, particularly based on leveraging on the brand of Satyam to become an eminent player in infrastructure as well.

There had been elaborate discussions on the valuation, wherein independent director TR Prasad had advised three distinct methods for evaluation of Maytas Properties while suggesting that in case the final valuation was higher than the aggregate of the three, 'full and proper justification should be provided.'

When contacted, Prasad said: "I had already made my stand clear and had the deal gone through it would have been subjected to rigorous board scrutiny."

The minutes came to public domain even as the new board of Satyam met for the second time on Saturday to discuss ways to steer clear of the financial mess that Raju had led the company into it.

Raju had on January 7 disclosed that he had fudged Satyam's accounts for years.

Raju warned of 'takeover by IBM' to push for Maytas deal
Satyam's disgraced chairman Ramalinga Raju had made an emotional pitch that the company faced a takeover threat from IBM and their likes, to avert which he wanted the board's support to diversify into other areas.

Returning from the US ahead of the December 16 meeting, wherein the company decided to go in for the Rs 8,000 crore acquisition of two firms related to his family, Raju had told the board that IBM and another company are going to take over the Indian IT firm because of its strong cash balances, a member present at the meeting said.

Raju also warned that after the takeover of Satyam, pink slips could be issued by the acquirer to enhance profits, the member said on the condition of anonymity.

To avoid this, Raju urged the members, in an informal pitch before the meeting commenced, to take what is known in the corporate world as a 'poison pill'.

His suggestion was that Satyam should enter sectors where IBM and their likes would have no interest, to deter hostile takeovers.

Subsequently, the board was given presentations on Maytas Infra and Maytas Properties with the valuation, an issue on which some members wanted more clarity and adhere to certain basic parameters before going ahead with the deal though agreeing for it in principle.