Satyam planned to acquire a 51% stake in Maytas Infrastructure
Limited, a leading infrastructure development,
construction and project management company,
for $300 million. Here, the Rajus’s had a 37% stake. The
total turnover was $350 million and a net profit of $20
million. Raju’s also had a 35% share in Maytas Properties,
another real-estate investment firm. Satyam revenues
exceeded $1 billion in 2006. In April, 2008 Satyam
became the first Indian company to publish IFRS audited
financials. On December 16, 2008, the Satyam board,
including its five independent directors had approved the
founder’s proposal to buy the stake in Maytas Infrastructure
and all of Maytas Properties, which were owned by
family members of Satyam’s Chairman, Ramalinga Raju,
as fully owned subsidiary for $1.6 billion. Without
shareholder approval, the directors went ahead with the
management’s decision. The decision of acquisition was,
however, reversed twelve hours after investors sold Satyam’s
stock and threatened action against the management.
This was followed by the law-suits filed in the US
contesting Maytas deal. The World Bank banned Satyam
from conducting business for 8 years due to inappropriate
payments to staff and inability to provide information
sought on invoices. Four independent directors quit the
Satyam board and SEBI ordered promoters to disclose
pledged shares to stock exchange.