Satyam Computer Services took the decision to acquire Maytas Infrastructure and Maytas Properties at a closely held meeting of the board on December 16.
However, the meeting chaired by M Rammohan Rao, who along with Krishna Palepu, had raised doubts on the need and relevance of the $1.6 billion acquisition of the Raju family-dominated and managed real estate firms. The resolution for the acquisitions was, however, passed unanimously.
From the minutes of the meeting, a copy of which is with Hindustan Times, it is learned that the board had roped in Ernst & Young for evaluating Maytas Properties and the law firm Luthra & Luthra (L&L) to carry out title diligence.
“The acquisition would amount to dilution of core competency in IT business as the proposed acquisitions are in unrelated business,” Rao had noted.
Palepu said: “Both these issues will be significant concerns to investors and analysts, so it is very important that management makes the same compelling presentation to the investors.” However, V Srinivas, CFO of the company said, “By FY 2010, 25 per cent of the revenues will come from two entities.”
When contacted, Ernst & Young declined to comment on the issue. Rajiv Luthra, founder and managing partner, L&L, said their valuation had been only for the proposed IPOs of the Maytas firms.