Satyam board meet that led to Raju's downfall

Hyderabad: A Hyderabad court has sent Satyam Computer Services Ltd founder Ramalinga Raju, his brother, Satyam's former managing director Rama Raju and ex-chief financial officer Vadlamani Srinivas to four days in police custody from Sunday till January 22.

Andhra Pradesh Police will now interrogate the trio on the basis of the minutes of the Satyam board meeting held on December 16, 2008 that led to Satyam's downfall.

Network18 has exclusive access to the minutes of the meeting that cleared the controversial acquisition of Maytas properties owned by Ramalinga Raju's sons.

It shows how CFO Srinivas and other officials manipulated the meeting and more shockingly how the independent directors agreed with the deal without resisting it.

Here's how it happened:

Ramalinga Raju and his brother Rama Raju abstained as they were interested parties in the agenda of the meeting with independent director Professor Rammohan Rao chairing the meeting.

But Raju's men CFO Vadlamani and CEO Ram Mynampati took over the meeting from them to push the agenda and got the board to put its stamp on the acquisition of Maytas by paying Rs 6,410 crore.

When Rammohan Rao said the deal could dilute Satyam's core competence as an IT company was entering real estate and infrastructure business, Vadlamani told the board that IT industry has slowed down considerably because of global recession and needs to diversify to stay in the race.

It is another matter that he told the media on the day of the acquisition that the IT sector growth is strong.

Another independent director Mangalam Srinivasan said the board should have been involved in the deal from the very beginning and should not be a rubber stamp for decisions already taken.

Vadlamani also said the valuation for Maytas was done by Ernst and Young for Rs 6,523 crore.

Ernst and Young has, however, denied having anything to do with this.

What is surprising is that the independent directors did not make a serious effort to stop this deal from going through.

Did the independent directors fall prey to the management fraud or did they play along.

"Independent directors were just satisfied with whatever reply they got, however inadequate. I think none of the replies were even vaguely adequate. Clearly they were not trying to ask questions. They were just trying to protect there side from future action and I think they knew they were doing wrong, that's why they were asking these questions to trying kind of cover themselves for future action," said Sandeep Parekh, Professor, IIM-A and former SEBI executive director.

But should the directors have stopped the deal from going through?

"One hundred per cet. They could have stopped the deal. Independent directors have full authority to do so. The others were interested directors and don't have authority to vote. But even half of these independent director could have stopped the deal, if not this then atleast could have taken it to the shareholders," said Parekh.

And now that the probe has begun, the Satyam pack of lies will continue to unravel.

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#Satyam Computers #Satyam Board #ramalinga raju #Maytas #Satyam Fiasco

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