Tuesday, May 4, 2010

CAG slams Mahaharshtra Govt. for helping Satyam- Hitavada Impact

CAG slams Mahaharshtra Govt. for helping Satyam

The Hitavada Impact

By Rohinikant Matey

IT’S official now. The Comptroller and Auditor General of India (CAG) has stated that Maharashtra Government, operating through the Maharashtra Airport Development Company Ltd (MADC) helped Satyam Computers acquire land at damned cheap rate in MIHAN. This brings back into sharp focus R C Sinha, the then Vice Chairman and Managing Director (VC&MD) of Maharashtra Airport Development Company (MADC), for the role he played in the Satyam as well as in other deals.

The CAG finding has come as a vindication of The Hitavada story on January 11, 2009, questioning the role played by the MADC and its boss of the day. The Hitavada had exposed the tacit links R C Sinha had with a Satyam subsidiary namely MAYTAS (‘Satyam’ if read in reverse) and asked if that did not form vested interests that went against public interest.

The CAG has now rapped the Maharashtra Government for giving "undue benefit of over Rs 20 crore" to controversial Satyam Computer Services Limited by selling land at lower rates in Multimodal International Hub Airport (MIHAN) project at Nagpur.

Did R C Sinha grant extra-ordinary favours to Satyam Computer Services while allotting land to the now-maligned company at MIHAN, was the pointed question raised by The Hitavada then. And was it because Sinha was Chairman of Maytas Infra (the company whose involvement brought about the disgraceful downfall of Satyam), a connection nobody was aware of at the highest level, was the poser.

Coming down heavily on the Maharashtra Government, the CAG report states, "The Maharashtra Airport Development Company Limited (MADC) allotted 100 acre land to Satyam at a lower rate of Rs 18 lakh per acre against applicable rate of Rs 24.28 lakh considering it as an ‘early bird’ offer."

The report questions the logic behind allotting land to Satyam, an IT company, at a far cheaper rate when another IT major Shapoorji Pallonji and Company Limited was given land at the rate of Rs 26.30 lakh per acre.

Scoffing at the ‘early bird offer’ idea advanced by Sinha for Satyam , the CAG says that how can Satyam be considered an early bird when Shapoorji Pallonji, too, was awarded the land on the same day i.e. December 5, 2005, but at a far higher price tag.

‘Incidentally, MADC had approved 100 acre of land at MIHAN to Shapoorji Pallonji and Company Limited at the rate of Rs 26.30 lakh per acre for an IT company on the same day’ says the CAG report.

It was a well known fact that Sinha was close to B Ramalinga Raju, Founder and Chairman of Satyam Computer Services. The relations had thickened during the tenure of Chandrababu Naidu when Sinha was serving the Andhra Pradesh Government. It was during this time that Sinha was installed as the Chairman of the beleaguered company Maytas.

Surprisingly, nobody in the MADC or at the Government level was aware of Sinha being the Chairman of Maytas. The direct connection of Sinha with a company (Maytas) where Ramalinga Raju had a 36 per cent share and allottment of land to Satyam (owned by Raju), has raised many eyebrows in the Mantralaya.

Questions were raised whether it was proper for a Managing Director of MADC to ‘deal’ with a company (Maytas) where he himself was the Chairman. The CAG report has almost put a stamp on the fishy deal.

Satyam was also given over 28 acres of additional land on March 3, 2007 without the approval of the competent authority at a cheaper rate, the report said.


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