what were they thinking !!!

This post is written to remove commonality between Good intelligent people and people with extravagant Corporate Governance  skills . 

Recently there was a news on Satyam trying to go for a buyout option for its Maytas infra and properties. Thats some guts  considering the dim future this company might have under Mr Raju. Now how does corporate governance vs intelligence comes into picture - to start off with it I would like to give a prima facie of what Satyam software solutions really is. Its the 4rth largest software vendors in India and also diverse into infrastructure with some very huge SEZ projects under its belt .( Now thats called a good governance because people can make diamonds and gold but land is the only thing which is finishing up fast. )

The recent Wall street crumble shook the world or more likely , the IT people. Such turbulent time often comes with attrition and cost cuttings and  Satyam was no different . They  decided not only to close their Kolkata office but also not to call the freshers. This already had created an air eerie atmosphere and a bad thing worse. Soon the maelstrom accompanied casualties with some senior board member quitting. Now Mr Raju still hopeful of a rally in such subdued market , decided to have a buyout for its sister companies. But this is exactly where things went wrong and the fact that Satyam remain blissfully oblivious about its Institutional Investors hit them like a comet and the stock lost nearly 30% in next days trade. This part was some thing of a lesson and a very good case study on Corporate Governance. 

While still trying to revive and mitigate the damage that has been made , there was an announcement of Rights issue  but nothing seems to give them a hope.

But their worse was still to come and next day World bank announced that it is going to ban Satyam from working with it and also posed a ban of 8 years after  espionage was detected in their system.

Now for all those Madhur Bhandarkar fan who saw "CORPORATE"  must be aware of the fact that somebody is going to take a toll of such an impromptu decision , one of the board member is told to take the responsibility of the whole event and is asked to leave the company. That happens here also.

Satyam board has members like "Mr Vinod Dham " of silicon valley and contracts like FIFA world cup which are reason enough for the company to sally forth. But does that really mean that they can take a capricious decision.

According to me No , they can't . The company knew that the news of WORLD BANK breaking off their partnership will soon hit the markets so rights issue and selling more than $1 billion of company's assets to buy another was made in a bid to shy away from the aftereffects of world bank. This was although an intelligent move but proved a bad solution from the point of view of corporate governance.