Satyam Computers Corporate Governance Fiasco (G): Maytas Satyam?
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Code : GOV0047
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Region : US |
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Introduction: The December 16th 2009 announcement by the board of directors (board) at Satyam Computer Services Pvt. Ltd. (Satyam), to acquire two real estate companies – Maytas Properties Pvt. Ltd. (Maytas Properties) and Maytas Infra Pvt. Ltd. (Maytas Infra) – ultimately blew a death knell to the company. The family connections between the owners of Satyam and Maytas firms infuriated the shareholders leading to aggressive investor backlash. This in turn brought to light India’s biggest corporate governance fiasco at Satyam – a company that received awards for excellence in corporate governance a number of times. In addition, the self-declared accounting fraud by its founder, CEO and chairman, B. Ramalinga Raju (Ramalinga Raju) raised several doubts on the siphoning of Satyam’s accruals to other businesses run by his family members. A series of events following the confession by Ramalinga Raju ultimately led the Maytas firms – managed by his two sons Teja Raju and Rama Raju – to face the wrath of the investors, ultimately resulting in Government’s intervention and thorough investigations into the affairs of the two firms and their ongoing projects. Amidst the conditions of turmoil, the fate of Maytas twins remained uncertain. |
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‘Maytas’ is a common prefix in the nomenclature of the numerous firms promoted by Ramalinga Raju and his family members (Annexure I). Out of all the firms – Maytas Infra and Maytas Properties – caught the attention of the public eye following Satyam’s announcement of acquiring the two firms...
