No nod for Satyam's buying Maytas Prop: T R Prasad

Amid criticism of independent directors for clearing acquisition of Maytas Properties by Satyam for Rs 6,410 crore, former director T R Prasad today said the board approved formula would have brought down the purchase price by less than half.

"I informally understand from real estate dealers that under this (suggested) valuation formula, the outgo from Satyam would have dropped to less than 50 per cent of the upper limit proposed  by the management," former Satyam independent director Prasad told PTI.

When asked about the announcement of acquisition of Maytas Properties on December 16, which was dumped a day later, Prasad, a former Cabinet Secretary, said the board approval was for investment of up to Rs 6,410 crore subject to a valuation formula.

"By no stretch of imagination can it be construed as an outright approval for acquisition at Rs 6,410 crore," he quipped.

Prasad said that he had supported the acquisition at the crucial board meeting on "the explicit stipulation that the acquisitions be based on valuation derived from notifications of regulators and government".

At December board meeting, Prasad had advised the board that the valuation of Maytas Properties should be done with reference to three distinct criteria which include completed projects and their value; current market realisation value of the work-in-progress; and the basic market value notified by the state government for the registration of land awaiting development.

The comments from Prasad raise a question mark over Satyam's earlier statement that the Board had "unanimously" approved the acquisition of Maytas Properties for Rs 6,410 crore and Maytas Infra, a listed companies for Rs 1,500 crore.