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The Satyam mountain of lies crumble in face of evidence.  As per Ramalinga Raju, a big 4 consulting company had advised the management on the Satyam-Maytas deal.  All the top 4 consulting firms (Pricewaterhouse Coopers, Deloitte, Ernst & Young and KPMG) have now denied being a part of the deal.

Satyam’s valuation of unlisted Maytas Properties is turning out to be a whodunit. The big four audit firms have denied any role in the
generous valuation of the private company owned by the Raju family. Satyam’s abortive attempt last week to acquire Maytas has turned into a blazing corporate governance controversy.

Satyam had said that one of the big four audit firms was the advisor to the board. And, based on this report, the board had proceeded with the acquisition of privately-owned real estate company of the Rajus for $1.3 billion (about Rs 6,240 crore).

In an email to ET, an E&Y spokesperson said, “I would like to reiterate that Ernst & Young was not involved with the Satyam-Maytas transaction.” ET received similar responses from PwC, Deloitte and KPMG. ET interacted with the spokespersons of PwC and Deloitte, while the KPMG spokesperson responded through an SMS.

Then, who valued Maytas? Satyam did not reply to an email asking the basis on which the land bank of Maytas Properties was valued at Rs 6,400 crore or Rs 1 crore per acre.

Real estate brokers said the valuation was done when the prices of land on the outskirts of Hyderabad was below Rs 10 lakh an acre due to the slump in real estate prices.

“Maytas Properties has three upcoming SEZs in Hyderabad and most are in the development phase. The firm also has properties in Nagpur, Chennai and cities in Andhra Pradesh such as Vizag. Putting these properties together, the maximum valuation could be Rs 3,500 crore.

Considering current market conditions, even this valuation may be a little extreme. But a valuation of Rs 6,240 crore is completely over the top,” a senior official with a leading property consultancy firm said.

An independent Satyam director had earlier told ET that the board relied on E&Y’s advice, something that has been denied by the audit firm. Satyam had to reverse its decision within 12 hours following protests by its investors across the world. Despite the cancellation of the Maytas transaction, the shares of Satyam crashed 33% to end at Rs 163 on the Bombay Stock Exchange on Friday.

Above news from: Economictimes

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Wonder what’s up with Ramalinga Raju? Wonder what was running through his mind when he decided to buy into the infrastructure and real estate firm, Maytas run by his sons.  Satyam is a unique company in a way that the promoter group holds less than 10% stake and private investors hold a majority stake in the company (most of them FIIs).  So, it was even more baffling to see the decision taken by the promoters to shift the company’s focus into an altogether different field from its current IT Services.

Maybe Raju rode his luck or was absolutely sure that his decision wouldnt be questioned by the shareholders. Its a victory for the minority shareholders. Under severe pressure by shareholders across the board, the decision to buy into Maytas had to be withdrawn.  It takes years to build up trust and a certain image in the market and with one silly move, Ramalinga Raju has poured water on all the hardwork.  A 30% hammering of the stock (on NSE) in one day will have shown Raju who the boss is and he better not take any such decisions in haste the next time.

Satyam announced the acquisition of the privately held Maytas Properties for $1.3 billion and increasing its stake in Maytas Infra to 51 per cent for $300 million. However, the company had to eat humble pie and withdrew its proposal due to strong opposition from shareholders.

The hasty retreat has dealt a severe blow to Satyam’s credibility and made it the laughing stock of the investor fraternity. Analysts said the deal was unethical as it aimed to bail out firms owned by promoter and chairman Ramalinga Raju’s sons. According to them, the company grossly overvalued the real estate and infrastructure firms, especially at a time when the two sectors were not in a good shape.

Full article here

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Delhi, Bombay, Bangalore, Chennai, Kochi and now Hyderabad.  Its a metro boom all over India.  Finally the infrastructre boom has started and the ones who persisted and got into the deals could reap a good harvest over the next few decades.  Of course, land acquisition would be a major hurdle, with political parties eager to jump on to the bandwagon when a few properties would be demolished.

But we cant discount the fact that more than US$200 billion worth of infrastructure projects are going on in India at this time and its only going to increase.  Maybe 4-5 years down the line, we would have a better infrastructure and wouldnt be so surprised when we go overseas and see their metros, road and rail network.

The Andhra Pradesh government has formally issued the ‘letter of award’ in favour of Maytas Infra-led consortium for undertaking the development of Hyderabad Metro Rail Project on design, build, finance, operate and transfer basis.

The consortium, Navabharat Ventures Limited, Maytas Infra Limited, Ital Thai Development Public Company Limited and Infrastructure Leasing and Financial Services Limited (‘NMII Consortium’), will take up the metro project estimated to cost Rs 12,000 crore (approx US$ 3 billion) in Hyderabad.

The project has three lines totaling 71km, which include

Miyapur to LB Nagar – 30 Kms
Jubilee Bus Station to Falaknuma – 15 Kms
Nagole to Shilparamam – 26 Kms

Full article here

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After the success of Delhi Metro, India seems to be going the whole hog in the race to make metros for all the big cities. Bombay has already started the construction and its been awarded to the Anil Ambani’s Reliance Energy group. Bangalore, Chennai, Hyderabad are in various stages of bidding and planning. Come 2012, we would be witnessing spanking, state of the art transport infrastructure all over India. Hopefully, more and more people will use the metro and other forms of public transport so that we can reduce our consumption of Oil and related products.

Financial bids for the Rs 9,696-crore elevated Hyderabad Metro Rail will be opened on June 20 and the consortia seeking the least financial support from central and state governments will be awarded the contract. The Hyderabad Metro Rail managing director, Mr N.V.S. Reddy, said the central government and state government have agreed to fund up to 40 per cent of the project cost. But, the consortia quoting to take least financial support from the governments will win the rights to execute the project, he added.

Works on all the three proposed corridors of metro rail will be taken up from August this year, and the target to run the first service is 2012 end.

In fray for one of the largest metro rail projects being taken up under Public Private Partnership (PPP) are five selected national-international consortia, which have already qualified in technical bids. They are:

1. Essar Constructions (ECL), SREI (Kolkata), Singapore MRT, SEC and STE of Singapore.
2. Magna Allmore (Malaysia), Siemens (Germany), Emirates Trading Agency (ETA — Dubai) and Nagarjuna Constructions (NCC).
3. Reliance Energy (Anil Ambani group) and Bombardier (Canada).
4. GVK, Gammons, Alstom (France) and IDFC
5. Navabharat, Maytas, Ital Thai (ITD — Thailand), IL and FS.

Above news courtesy: Deccan Chronicle

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Some pictures that the international media never shows when it speaks of India. Yes, there are such beautiful roads out there too.

Pictures copyright Ashish, Danchitnis and some other photographers whose names i missed out. The pictures are taken from Skyscrapercity.

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