They (i.e RamaRaju) €say the decision to acquire Maytas is a value-added decision, but then why he back down on the decision? Because Satyam stock (and his overall value) has been decreased after market reacted negatively and sold down Satyam stock. Not only that, this transaction if go through, is a violation of company act, as it constitutes related party transaction. (http://www.investopedia.com/terms/r/related-partytransaction.asp)
What is Maytas? According to http://www.telegraphindia.com/1081217/jsp/business/story_10263918.jsp, "The two Maytas entities have also been founded by the family of B. Ramalinga Raju, who is the chairman of Satyam Computer."
So, basically if you read the news article, it's like they are using the cash rich position of Satyam to bail out Maytas, which is also another company by those related to Raju. This Maytas company is doing" construction that is going through a very difficult phase". Thus, this is an unnecessary bailout using cash from Satyam. Isnt it great? :(
Then you may ask, why this important to Satyamites? Its easy:
1. It is obvious that spending lavishly at this trying time, when the whole world is undergoing financial crisis is utterly irresponsible. Furthermore, this new company is not doing good, and totally unrelated to what Satyam is currently doing. I can understand if they want to acquire a company that can add value, for example if they want to acquire research center of airbus for example.
2. ANother question is, what will happen if suddenly the newly-acquired company go bust? Wouldnt it affect Satyam and multiple thousands of its employees? Would they suddenly retrench people to make up for the losses? (The amount of transaction is US$1.6 billion, man)
3. The fact is this transaction is like Rama Raju is taking Satyam money to help his family. He cant take the money directly, so he "pretend" to buy.Then what is wrong, u ask me, since he only helping his family? Well, it is his company, but this is unacceptable as thousands and thousands of people depends on Satyam, plus this Satyam is public listed anyway.
4. As a suggestion, If RamaRaju doesnt know how to spend the cash, then how about rewarding your own employee, or "associates" as you like to call them, with some bonus or added value training so that we can appreciate and grow this company more. So much for delighting AICS. That's why I never trust company slogan, unless its leaders actually follows them (WHat is AICS? Only Satyamites know).
Anyway, as starter to this blog, this post will only this short. We are welcoming contributions, please send to satay_ayam_forever@yahoo.com for any comment regarding satyam, any good or bad as we intend to be the watcher, as long as time permits.
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