By R Jagannathan
On 7 January 2009, when Satyam Computer Services Chairman B Ramalinga Raju wrote to his board and the stock exchanges that he had fiddled with the books and landed the company in a mess, a little-noted part of his confession related to the money he had put into the company to save it.
After acknowledging overstated cash and bank balances, non-existent accrued interest and debtors to the extent of nearly Rs 6,000 crore, he also slipped in a claim of Rs 1,230 crore that the company owed him and his family.
He wrote in his confessional letter that “in the last two years, a net amount of Rs 1,230 crore was arranged to Satyam (not reflected in the books of Satyam) to keep the operations going by resorting to pledging all the promoters’ shares and raising funds from known sources by giving all kinds of assurances.”
Raju added: “Every attempt was made to keep the wheel moving and to ensure prompt payments of salaries to the associates.”
Why bring this up now?
Well, now that Satyam has been taken over by Mahindras, and the Mahindras are planning to merge Mahindra Satyam (MSat) with Tech Mahindra (TechM), Raju & Co have been moving the courts to get this (undocumented) fact acknowledged in the merged company’s books.
The merger, which has to be approved by the Andhra Pradesh and Bombay High Courts, is in the final stages of court sanction.
But, says The Economic Times, 37 companies belonging to the Raju family and IL&FS, the company which took over another Raju company, Maytas, has asked the court to reject the merger between MSat and TechM.
The newspaper says these shareholders want the court to direct the two companies to hold a separate meeting with unsecured creditors to obtain their approval for the merger. Otherwise, the merger would be “based on wilful falsification of accounts and misrepresentation of facts.”
That’s a nice touch. Wilful falsification of accounts was what the Rajus confessed to. Now the pot wants to call the kettle black.
Given the losses MSat incurred in paying off liltigants in the US and through loss of clientele due to the Rajus’ shenanigans, it is doubtful if they are protesting to get some money back.But it never does anybody harm to play the victim card.
Over to the courts.