Prabhu urges govt to merge Raju’s unlisted cos with Satyam

20 Feb 2009, ET Bureau


NEW DELHI: Pressure is mounting on the government to merge all the unlisted companies of the scam-tainted Satyam founder Ramalinga Raju with Satyam Computer Services, so that the assets of these unlisted companies acquired using money probably siphoned off from Satyam will come back to the software maker.

Former Cabinet minister and a member of the Parliamentary standing committee on finance, that looks into the Satyam scam, Suresh Prabhu has told the ministry of corporate affairs that the assets of all unlisted companies of Raju family should go to Satyam to salvage the software company struggling to raise funds to retain its employees and deliver projects on time.

“To make the firm creditworthy and to raise funds, it needs assets. The real solution is to merge Satyam with all the unlisted companies of the promoters’ family, including Maytas Properties,” Mr Prabhu told ET.

The chartered accountant-turned parliamentarian also said that freezing the assets of the Raju family will only lead to their eventual erosion of value, which may not help in reviving Satyam. Instead, if these companies are merged with Satyam, its balance sheet gets strengthened with assets.

“The charge (rights) of lenders over the assets of these companies will remain, in spite of a merger,” said Mr Prabhu. It is better for the lenders to have rights over the assets of company with stronger balance sheet, he added. Raju, too, had attempted to make Satyam acquire Maytas Properties and Maytas Infrastructure in a bid to replace the fictitious assets of Satyam with real assets, as per his own January 7 admission.

The government has already asked its specialised investigating agency Serious Fraud Investigation Office (SFIO) to probe into 325 companies connected with Satyam’s arrested founder Ramalinga Raju and family, in addition to companies like Maytas Properties (unlisted) and Maytas Infrastructure, a listed company run by the promoter family.

The government has also moved CLB to replace the board of directors of Maytas Infrastructure, which is executing the Hyderabad Metro Rail project. The CLB will hear the matter on February 24.