Mangalam Srinivasan resigned saying she took moral responsibility for not casting a dissenting vote though she had raised several objections to the Maytas deal.
HYDERABAD: The decision of Satyam Computer Services’ management to acquire Maytas Properties and Maytas Infra was not as unanimous as was claimed by the company’s top brass, if the views being expressed by some independent directors on its board are any indication.
After deciding to acquire the two companies, which were promoted by the family members of Satyam chairman B Ramalinga Raju, the company held a conference call to inform the stakeholders about the decision. During the call, Raju and Satyam CFO Srinivas Vadlamani insisted that the decision to go ahead with the controversial deal was indeed unanimous. “Basically it is a unanimous decision, it is not being put to vote…,” Vadlamani said.
But the boardroom scene is different from what is being shown to the world. TR Prasad, a former bureaucrat and independent director on the board, told the media recently that the management was given options to evaluate before formalising the decision to buy the family-run companies.
Mangalam Srinivasan, another independent director, said she had not cast her "dissenting" vote against the acquisition. She had sent across her resignation to Raju on Thursday and the company officials confirmed that the director had put in her papers.
Indicating that there was much disagreement over the entire proposal of going ahead with the controversial related-party transaction, she said in her resignation letter, “I am sending this letter to let you know that while I raised many of the issues related to the procedures and had expressed my reservations during the Satyam board deliberations, I had not cast a dissenting vote against the acquisition of Maytas, for which I take the moral responsibility.”
Though the reasons for Mangalam not casting her dissenting vote could not be ascertained, her letter makes it clear that there were reservations on the issue and some of the directors had raised objections to the process of taking forward the deal, which has finally landed a mess.
Though not agreeing with the ‘dissent’ theory, VS Raju, another independent director on the board of Satyam, told DNA that there were views expressed by all those participating in the meeting on December 16. "I have not seen her (Mangalam's) resignation letter. But I can tell you that there were views expressed by all of us while discussing the proposal. We had approved the proposal [to buy Maytas] and asked the company to conduct the due diligence," Raju said.
But the Satyam management announced that it would acquire the Maytas companies without mentioning the board’s rider in the form of due diligence.
A Hyderabad-based practising chartered accountant said on condition of anonymity, “No individual worth a directorship would ever agree to such a proposal, that too a related party transaction, without raising objections. Now, it is the turn of Raju to tell the world why he had to hurry with a decision when the board itself wanted him to evaluate other options and conduct a due diligence. A due diligence need not necessarily result in a positive decision. There are occasions when the acquisition plans were called off at due diligence stage due to some discrepancies in the target companies.”
But analysts said Raju was right in letter even on this count though the spirit of such an announcement is a major issue. According to practising auditors and company secretaries, a decision is said to be unanimous as long as the dissent is not recorded in the minutes of the meeting. “It is a clear case of going by the letter and not by the spirit of the rule book," the CA from Hyderabad said. "If dissent or reservations were expressed in the meeting, they should be part of the minutes of the meeting.
"In this case, if it was part of the minutes, the management of the company would never call it a unanimous decision. At least a probe, either by the ministry of corporate affairs or Sebi, should find out the reasons for not recording the views of people like Mangalam Srinivasan, who clearly says she had raised issues and expressed reservations."
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