Raju bows Investors uproar, Satyam Calls of Maytas cos buying plans
HYDERABAD, India, Dec 17, 2008: In a dramatic move, Satyam Computer Services Ltd Chairman Ramalinga Raju withdrawn his plans to acquire his own companies run by his both sons, Maytas Infra and Maytas Properties.
Investor community across the globe questioned the Raju’s move, saying its in the interests of promoters family and no way add value to the minority investors.
Reacting to these developments, Satyam’s shares in New York Stock Exchange lost nearly 55%.
Famous broking firms like Citi, Kotak, Prabhudas Liladhar downgraded the Satyam Stock to sell.
Analysts said, now it is the credibility of Satyam is at stake.
Ramalinga Raju’s sons Teja Raju and Rama Raju hold majority shares of the Maytas Infra and Maytas Properties. This has raised many questions on the transparency of the deal.
Analysts and investors, on Tuesday evening, openly challenged Raju and warned to go any length to stop the deal.
It seems Ramalinga Raju realized the possible impact of his decision and taken back it to cool off the investors.
Institutional investors held nearly 60% stake in Satyam Computers, of which nearly 45% held by foreign institutional investors.
At 2.00 AM, The company officially has announced the cancellation of the deal.
It has announced that it is not going ahead with its proposed acquisition of Maytas Properties and Maytas Infra, in light of the feedback received from the Investor community.
Commenting on this decision, Satyam Chairman, Mr.Raju said, “We have been surprised by the market reaction to this decision even though we were quite positive about the merits of the acquisition. However, in deference to the views expressed by many investors, we have decided to call off these acquisitions.”
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