Mystery behind Maytas price tag

Big Four Auditors Say They Didn't Value Co

SATYAM'S valuation of unlisted Maytas Properties is turning out to be a whodunit. The big four audit firms have denied any role in the generous valuation of the private company owned by the Raju family. Satyam's abortive attempt last week to acquire Maytas has turned into a blazing corporate governance controversy.
    Satyam had said one of the big four audit firms was the advisor to the board. And, based on this report, the board had proceeded with the acquisition of privately-owned real estate company of the Rajus for $1.3 billion (about Rs 6,240 crore). In an email to ET, an E&Y spokesperson said: "I would like to reiterate that Ernst & Young was not involved with the Satyam-Maytas transaction." ET received similar responses from PwC, Deloitte and KPMG. ET interacted with the spokespersons of PwC and Deloitte, while the KPMG spokesperson responded through an SMS. Realty slump makes Maytas valuation suspect
    THEN, who valued Maytas? Satyam did not reply to an email asking the basis on which the land bank of Maytas Properties was valued at Rs 6,400 crore, or Rs 1 crore per acre.
    Real estate brokers said the valuation was done when the prices of land on the outskirts of Hyderabad was below Rs 10 lakh an acre due to the slump in real estate prices.
    "Maytas Properties has three upcoming SEZs in Hyderabad and most are in the development phase. The firm also has properties in Nagpur, Chennai and cities in Andhra Pradesh such as Vizag. Putting these properties together, the maximum valuation could be Rs 3,500 crore. Considering current market conditions, even this valuation may be a little extreme. But a valuation of Rs 6,240 crore is completely over the top," a senior official with a leading property consultancy firm said.
    An independent Satyam director had earlier told ET that the board relied on E&Y's advice, something that has been denied by the firm. Satyam had to reverse its decision within 12 hours following protests by investors across the world. Despite the cancellation of the Maytas transaction, the Satyam scrip had crashed 33%.
    dev.chatterjee@timegroup.com