Satyam-Maytas – Corporate Governance Issue? 2

There is a lot of hype in the Media about the issue of Satyam’s failed buyout plan of Maytas. Talks of Corporate Governance are around and even demand that SEBI/ MCA conduct enquiry on the issue proactively without any need for anybody to complain. Various sections in SEBI’s rulebook are quoted which empower it to undertake such action.

Ironically, I find the whole issue to be biased. The link between the promoter’s of the two companies (Satyam & Maytas) is the the reason for all this noise and it is questionable for the Satyam to choose Maytas for it’s diversification plans.

– But is it the first issue of such investment proposal in India? Why have earlier incidences never been questioned like this issue?

– Why nobody asked for proactive enquiry into Reliance Energy’s IPO – be it the the IPO price or the mismanagement in allotment or the subsequent bonus issue within 6 months of the IPO?

– The IPO fraud had shown how high profile companies like Karvy or NSDL were deeply involved but little action has been taken against them. Even the disgorgement proceedings are struck in SAT. Karvy continues to function without any issues. In fact subsequently it has been involved in more goof ups (Reliance Energy IPO allotment to name one).

– Markets went up more than 1000 points in a single week last year, did anybody ask for investigation on Indian Markets continued to rise even though the Financial Crisis was looming over in the Western World?

– Promoters in many companies made quick bucks by IPO over the last 2 years, most scripts are now trading at less than 50% of their IPO price. Did anybody look into the IPO pricing?

– Why is it that when other companies like Reliance diversify it is taken as positive news and this is considered bad?

Satyam Computers is not a run-by-night company. The company has been steady in its performance and even it’s promoters have been maintaining very high standards. One decision which other’s don’t like and the whole issue has been blown out of proportion.

Media – Be sensible….

2 thoughts on “Satyam-Maytas – Corporate Governance Issue?

  1. Anand Dec 18,2008 22:37

    You can’t blame the media. It is also afflicted by the herd mentality which is so typical of us. And of late in the name of with advent of 24×7 reporting is getting more and more ridiculous by the day. No one wants to look at the real picture, everyone just wants a juicy sound bite.

  2. Pavan Jan 11,2009 11:30

    I recently wrote a critical mail to one eminent (i guess) legal professional who writes for Business Standard, highlighting her to desist following ‘herd mentality’! My mail was point by point analysis about Satyam-Maytas deal, the way you have done. First I got a reply thanking me for feedback.

    After two days Satyam’s Chairman, came out with confession. To my surprise, the lawyer wrote back – ‘The Herd is proved right’!! Should I assume that even a senior legal professional supports ‘Herd mentality’??

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