Satyam Computer Services founder B Ramalinga Raju had made trips to the Indian School of Business (ISB) in Hyderabad, to Visakhapatnam and even the US, to convince the independent directors on the his board for acquisition of Maytas Infra and Maytas Properties, the two companies promoted by his family members.
This was a final and desperate effort to conceal his prolonged falsification of accounts.
According to sources, the Central Bureau of Investigation (CBI) has charged Raju with doing this to “put pressure” on them to approve the deal. Three of the six former IDs of Satyam — Vinod Dham, Krishna Palepu and Mangalam Srinivasan — lived in the US, while three others T R Prasad, V S Raju and M Rammohan Rao stayed at Visakhapatnam, Bhimavaram (about 300 km from Vizag) and the ISB campus respectively.
In addition, the date of the board meeting was communicated to the directors only on December 13, 2008, just three days before the meeting, unlike the usual practice of communicating such details a fortnight in advance.
“This is the only board meeting where no agenda points were circulated in advance. The draft board resolution was uploaded on to the board portal only at 7.06 pm on December 15, 2008, thereby not giving any meaningful time to the board members to prepare for the meeting,” the sources quoted from a report.
At its December 16 meeting last year, the Satyam board had endorsed the company’s proposal to buy Maytas Infra and Maytas Properties Ltd (MPL) for $1.6 billion (over Rs 7,400 crore, at latest exchange rate). The deal was aborted, following protests from investors.
The CBI is understood to have said the mergers and acquisition (M&A) division of Satyam was not allowed to conduct its own internal valuation and strategic studies pertaining to the deal. MPL “got valued secretly and hurriedly through M/s E&Y”.
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“In fact, no due diligence was conducted for the purpose of this acquisition. A one-year-old draft due diligence report of M/s Luthra and Luthra conducted for the purpose of an IPO listing of MPL was wrongly used by (Satyam’s former chief financial officer) Sri V Srinivas for this acquisition purpose,” the CBI said.
Meanwhile, Mahindra Satyam today said it could not assess the potential impact, if any, of the Rs 1,220-crore (about $264-million) loans from banks that Raju and his aides had taken by allegedly forging board resolutions.