Seems we were all barking up the wrong tree - rather the wrong shrub. There is something far more sinister which has occurred in the self dealing proposal. This is based on a CNBC report I saw yesterday which does not seem to have seeped in at all in the rest of the media - even much of CNBC analysis.
First, of the so called 6800 acres of 'land bank' (land under development) by Maytas Properties and thus valued at $ 1.3 billion, only 100 acres could be verified. Most of this 100 acres too is in sub-prime areas like agricultural land. When the correspondent contacted the company for the figures, the company said it does not comment on such figures as its a closely held company (BTW, it is a listed company). This needs to be investigated.
Second, the promoters of Maytas Infrastructure own not 35% of the company but closer to 85% of the company. The following is from CNBC:
"Coming to Maytas Infra, the promoters have clarified yesterday in a conference call that the promoter holding is around 36.6%. But when one digs into the DRHP of the company, many questionable names appeared in the public shareholding list.
Shareholding Picture %
Elem Investment 8.92%
Fincity Investment 8.92%
High Grace Investment 8.92%
B Jhansi Rani 2.35%
B Suryanarayana Raju 4.3%
Radha Raju Byrraju 4.38%
B Rama Raju 8.74%
These shareholders hold more than 40% in the company. All the above investors, whose names are in public shareholding, have been issued equity shares
pre-IPO at a price lower than the issue price. According to sources, actual promoter shareholding along with relatives and friends could be as high as 85%."
I think this is quite damning - if the names of the shareholders are in the public shareholding list and they are in fact publicly held rather than by promoters, why would such people be given discounted shares before the IPO. Clearly, this bit is easily proven with some minimal investigation. If the public part of the shareholding is mis-represented in Maytas Infra, the chance of it being misrepresented in Maytas Properties is not a remote possibility. Over to SEBI and Ministry of Corporate Affairs for investigating this which goes well beyond corporate governance into the domain of fraud and who all were complicit in this naked abuse and who kept their eyes closed long enough for all this to happen.
I think, it is also time that the various shareholders got together and called a general body meeting (requires 10% shares to call one) and remove all the directors from the slate of the company under S. 284 of the Companies Act 1956 - a relatively easy job given that the promoters are minority 8.6% shareholders in Satyam (or so is the claim).
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