In December 16, 2008, B Ramalinga Raju stunned the market by announcing that Satyam Computer’s board had approved a decision to acquire Maytas Properties for $1.3 billion and a majority 51% stake in Maytas Infrastructure for $0.3 billion. The late evening announcement saw the ADRs listed on the US market tank 54.5% in a single session. In a conference call with institutional investors that same evening, Raju and his board came under fire from aggressive mutual funds and foreign institutional investors, who threatened to oppose the move. Jayesh Shroff, who was then with SBI Mutual Fund, was particularly scathing in his attack on Raju.
Why institutional investors duck governance issues
Corporates, especially in India, get away with just about anything because financial institutions look the other way
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