Note: Please read and post your comments. This blog is not to defame or demoralize any personality or any corporate. It is just telling the facts about a corporate/person/thing and analyzing them from a common man point of view.
Everyone might have studied about Muhammad bin Tughluq and his activities in school days. Here we see a lively example i.e. Mr. R. R. I hope you know, whom I am talking about Satyam – Maytas: Both the companies are founded by Raju’s family. Satyam is founded by Mr. Ramalinga Raju and similarly Maytas (Observe that, if Satyam is reversed you get Maytas) is founded by his son.
In the year 2008, Satyam was awarded “The Golden Peacock” award for the Best Corporate Governance. I doubt whether this is also achieved by bribery (like they did in World Bank Case- bribing Muhammad Mushin, VP of World Bank during his tenure). Every thing about Satyam is just a
“Question Mark?” For the benefits of their family, Mr R.R took his own decision of acquiring the Maytas with out even concerning the non – promoters. The interesting fact is that Mr R.R and his family owns only 8% of stake in the company. With out concerning the other 91% investors, Mr R.R has taken the most hefty decision in his life.
The reason why I am comparing him Muhammad bin Tughluq is “ Every one might have come across this story, Tughluq changes his capital city Delhi to Devagiri and again back to Delhi. In this process of changing capital, Tughluq lost many of his army men, wealth and his reputation. Finally, he was called “MAD MAN OF HISTORY”. Now consider the Satyam case, Mr R.R has taken the decision to acquire to Maytas and again took back the decision. But in the mean time, he has lost his share value, his reputation and more chances of loosing his post as Chairman. There are many more similarities among both of them. So Mr. R.R can be called as Tughluq of Modern IT.
Tughluq remained forever in the books and thoughts of many humans because of his activities. In business terminology, we can say it as “Branding”; It is
Negative Branding.
If there are any such thoughts for Mr. R.R, i don’t think this will be successful in the present modern IT world. ”Sorry Sir!, Better luck in the next history”
As a author, I tried to understand some facts about both companies and here are some details Maytas: Metro Rail Project- Maytas is a part of Hyderabad Metro Rail Project on a Public Private Partnership (PPP) platform.
Generally the scenario is that, the government calls for bid and the tender is sanctioned for the least quoted. In this case, Maytas pays to the government Rs 30,311 crore spread over the concession period of 35 years. I came to hear that, Maytas has asked the government a land of 260 odd acres in Hyderabad as a return for this project. The required land is also given for the company for their Real Estate division.
Government- No investment + only 260 acres of land
Maytas- Rs 30,311 crores + Project cost + Project maintenance
Maytas Properties-They invested a huge amount of money in Maytas Hill County ( a 300 acre project). Jubilee Hills Landmark Project (5.7 acre project), 75 acre SEZ, Maytas logistics infra projects at several locations.
By having a look at all these projects and the global real estate market condition, I think that Maytas is in serious trouble due to lack of funds.
So, here comes the father to rescue his son (Hollywood style, because it is global). He over valued the Maytas stocks and tried to rescue his son .Every father, wants his son to be successful person like him. It can be forgiven, if it was only among father and son. There are also common people, investors, whom they forgot for their personal benefits and profits.
.......Share your thoughts, -Author
