It’s “all in the family” for Indian tech firm
Hold on to cash and don’t jump in to help family-owned firms.
Satyam Computer Services got this stern message this week when it was forced to dump a plan to spend $1.6 billion to buy two builders, part-owned by Satyam’s chairman and other insiders.
The move sent shockwaves across a country known for its trailblazing software industry, and triggered a cloud over corporate governance in India.
“All in the Family,” screamed the Economic Times on its front page, highlighting a furious reaction from the investment community.
Satyam’s move to buy control of Maytas Properties and Maytas Infrastructure was killed just 12 hours after it was announced.
Maytas is Satyam spelt backwards.
Satyam announced the deals after Indian markets closed on Tuesday and its U.S. shares more than halved. In the wee hours of Wednesday, Satyam bowed to investor angst and performed its U-turn, cancelling the deals.
But by then, the damage had been done.