It is currently 18 Nov 2017, 22:27

Close

GMAT Club Daily Prep

Thank you for using the timer - this advanced tool can estimate your performance and suggest more practice questions. We have subscribed you to Daily Prep Questions via email.

Customized
for You

we will pick new questions that match your level based on your Timer History

Track
Your Progress

every week, we’ll send you an estimated GMAT score based on your performance

Practice
Pays

we will pick new questions that match your level based on your Timer History

Not interested in getting valuable practice questions and articles delivered to your email? No problem, unsubscribe here.

Close

Request Expert Reply

Confirm Cancel

Events & Promotions

Events & Promotions in June
Open Detailed Calendar

The Professor of Corporate Governance

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  
Author Message
1 KUDOS received
Current Student
User avatar
Joined: 01 Aug 2007
Posts: 157

Kudos [?]: 13 [1], given: 1

The Professor of Corporate Governance [#permalink]

Show Tags

New post 20 Dec 2008, 06:29
1
This post received
KUDOS
Recently, the board of one of the major Indian software company Satyam , had agreed to acquire two companies for USD 1.6B.

Nothing wrong it seems. But these two companies, which are in construction sector, were floated by the relatives of the CEO of Satyam. And these companies are lately doing bad, apparently!

Although the board cleared the acquisition, it is the shareholders who had better sense and made a huge fuss which ultimately prevented the CEO from taking the final step.

Interestingly, one of the eminent professors of Corporate Governance from one of the best B-Schools in the world is an independent Director of Satyam. In India, the job of the independent directors are specifically to prevent such an egregious violation of corporate governance.

To know briefly on the independent director, the remuneration and the deal, you can click here

http://churumuri.wordpress.com/2008/12/ ... ss-school/

Kudos [?]: 13 [1], given: 1

Senior Manager
Senior Manager
User avatar
Joined: 13 Jun 2007
Posts: 409

Kudos [?]: 83 [0], given: 0

Schools: Wharton, Booth, Stern
Re: The Professor of Corporate Governance [#permalink]

Show Tags

New post 20 Dec 2008, 09:23
filmcity wrote:
Recently, the board of one of the major Indian software company Satyam , had agreed to acquire two companies for USD 1.6B.

Nothing wrong it seems. But these two companies, which are in construction sector, were floated by the relatives of the CEO of Satyam. And these companies are lately doing bad, apparently!

Although the board cleared the acquisition, it is the shareholders who had better sense and made a huge fuss which ultimately prevented the CEO from taking the final step.

Interestingly, one of the eminent professors of Corporate Governance from one of the best B-Schools in the world is an independent Director of Satyam. In India, the job of the independent directors are specifically to prevent such an egregious violation of corporate governance.

To know briefly on the independent director, the remuneration and the deal, you can click here

http://churumuri.wordpress.com/2008/12/ ... ss-school/


Wow, good find. Although we don't have all the elements to judge here: were the 1.6bn a bargain or not? What were the synergies? etc. But there's definitively something fishy there!
_________________

Wharton admits, join the rugby team!! It'll be by far the best experience of your MBA life

Kudos [?]: 83 [0], given: 0

Director
Director
avatar
Joined: 25 Dec 2007
Posts: 523

Kudos [?]: 64 [0], given: 28

Schools: Harvard '11
Re: The Professor of Corporate Governance [#permalink]

Show Tags

New post 20 Dec 2008, 09:33
Good find filmcity +1. I'm sure you noticed that the two companies being bought were named "Maytas", which is just "Satyam" spelled backwards. This sort of stuff happens in India too often though - I would not be too surprised if the HBS professor has some deep familial/regional connections with the folks at Satyam.

Kudos [?]: 64 [0], given: 28

VP
VP
avatar
Joined: 11 Dec 2006
Posts: 1430

Kudos [?]: 223 [0], given: 6

Location: New York, NY
Schools: NYU Stern 2009
Re: The Professor of Corporate Governance [#permalink]

Show Tags

New post 20 Dec 2008, 10:05
Audio wrote:
Wow, good find. Although we don't have all the elements to judge here: were the 1.6bn a bargain or not? What were the synergies? etc.


I am sure the synergies are immense. In that synergies are just made up BS to make a deal look viable, hardly quantifiable and rarely realized.
_________________

GMAT Club Premium Membership - big benefits and savings

Kudos [?]: 223 [0], given: 6

Senior Manager
Senior Manager
User avatar
Joined: 13 Jun 2007
Posts: 409

Kudos [?]: 83 [0], given: 0

Schools: Wharton, Booth, Stern
Re: The Professor of Corporate Governance [#permalink]

Show Tags

New post 20 Dec 2008, 11:01
3underscore wrote:
Audio wrote:
Wow, good find. Although we don't have all the elements to judge here: were the 1.6bn a bargain or not? What were the synergies? etc.


I am sure the synergies are immense. In that synergies are just made up BS to make a deal look viable, hardly quantifiable and rarely realized.


Haha, very true!! :-D Guess that's the banker in me surfacing up...
_________________

Wharton admits, join the rugby team!! It'll be by far the best experience of your MBA life

Kudos [?]: 83 [0], given: 0

SVP
SVP
User avatar
Joined: 04 Dec 2007
Posts: 1689

Kudos [?]: 202 [0], given: 31

Schools: Kellogg '11
Re: The Professor of Corporate Governance [#permalink]

Show Tags

New post 20 Dec 2008, 14:23
Wow that does seem shady. Interesting find!

Kudos [?]: 202 [0], given: 31

Senior Manager
Senior Manager
User avatar
Joined: 27 Aug 2008
Posts: 354

Kudos [?]: 30 [0], given: 0

Location: Texas
Schools: Chicago (R2), Kellogg (R2), Tuck (R1), Darden (R1), Cornell (R1), Texas (R2), Rice (R1)
Re: The Professor of Corporate Governance [#permalink]

Show Tags

New post 20 Dec 2008, 15:02
Good luck msday with HBS :-D .

There were absolutely no synergies between the Satyam and Maytas. Satyam is an IT major with over 60% of their revenues coming from the US market. Maytas is a construction company managed by the son of satyam's CEO. So, the only synergy is that the son still lives in his fathers house (quite common in India..no raised eye brows please :-D ).

What surprised me though was the fact that angry investors forced the management to cancel the deal. This is not common in corporate India. The management can pretty much get away with anything. I still remember one pharma company that continously lend money to some of its directors although it was going through bankruptcy.

Anyways, I dont think this topic needs to be in this forum. Will the moderators please move this to "Off Topic"
_________________

Traffic never sleeps...

Kudos [?]: 30 [0], given: 0

Senior Manager
Senior Manager
User avatar
Joined: 27 Aug 2008
Posts: 354

Kudos [?]: 30 [0], given: 0

Location: Texas
Schools: Chicago (R2), Kellogg (R2), Tuck (R1), Darden (R1), Cornell (R1), Texas (R2), Rice (R1)
Re: The Professor of Corporate Governance [#permalink]

Show Tags

New post 27 Dec 2008, 11:31
Guys, just read this in the indian news media. Apart from the Harvard prof, more importantly, the Dean of Indian School of Business (supposedly ranked higher than Kellogg by FT :-D ) was also on the Satyam board as an Independent Director. This has turned into a huge issue in the indian papers. Politicians are calling for the dean's removal. The harvard prof has already resigned. Seriously, if i were the dean, i would have resigned as well. ISB should fire him for setting a bad example. Ironically, from wht i hear from a friend of mine (current student at ISB), the school is a strong proponent of CSR!

http://economictimes.indiatimes.com/Sat ... 897355.cms
_________________

Traffic never sleeps...

Kudos [?]: 30 [0], given: 0

Re: The Professor of Corporate Governance   [#permalink] 27 Dec 2008, 11:31
Display posts from previous: Sort by

The Professor of Corporate Governance

  new topic post reply Question banks Downloads My Bookmarks Reviews Important topics  


GMAT Club MBA Forum Home| About| Terms and Conditions| GMAT Club Rules| Contact| Sitemap

Powered by phpBB © phpBB Group | Emoji artwork provided by EmojiOne

Kindly note that the GMAT® test is a registered trademark of the Graduate Management Admission Council®, and this site has neither been reviewed nor endorsed by GMAC®.