This conference call was conducted before Satyam [Get Quote] called off the Maytas deal.

Investors who participated in the conference call arranged by Satyam Chairman and founder B Ramalinga Raju on Tuesday were emphatic in their opposition to the company's move to acquire Maytas Infra and Maytas Properties.

Despite an elaborate explanation by the Satyam management, the investors' community remained unconvinced. They demanded that the company disclose the reasons for not returning the money back to shareholders through a buyback offer or a bonus.

Several investors registered their protest against the move and a few threatened the promoters with legal actions to stall the acquisition plan, including blaming the promoters for funnelling out money to family-run companies. Excerpts from the conference call:

JF Asset: We are baffled by this announcement. What is the idea of acquiring an infrastructure firm? Who were the advisors and how was the valuation done?

Vadlamani: This was a unanimous board decision. This is the right time for diversification in another sector. We could have bought another IT firm with the assets, but then we would have had the same problems like cross-currency headwinds, slowdown and hence the diversification.

Maytas has $2.5 billion worth of order book and the future growth prospects are very good. I agree that it is difficult for people to understand and assimilate this decision. We have been advised by a reputed firm from among the top four (the company declined to divulge the name).

The valuations are perfect. Maytas Properties has a land bank of 6,800 acres in Hyderabad, Chennai, Nagpur and other cities. SBI [Get Quote] Asset Management: Why did the company not choose to give this money to the shareholders and why was this decision not taken in an annual general meeting or through an extraordinary general meeting?

(The company could not defend this query.) This is a good diversification strategy. We do not need to take this to the shareholders.

Foreign analyst: In the current situation, why has the company not chosen to hold on to cash? Also, the deal seems precarious because of a family relationship in the firms being acquired.

Raju: We did look at other avenues, like distributing cash, buyback and acquisition. In terms of acquisition, we have been looking at targets and we considered some sizeable deal sizes, but realised that over a period of time in an IT acquisition the cost structures are higher and the leadership that we were getting was not making much difference. Hence, we did not take that path.

It made sense to acquire an infrastructure company. Maytas does have same work culture and philosophy and hence the merger will be smooth.

As far as synergies are concerned, we can grow our infrastructure-related services. In the next four to five years, the revenue from these two firms with regard to software services would be 50:50. Though the margin in the infrastructure firm is much lower, we see growth opportunities.

Could you tell us the shareholding pattern in Maytas Infra and Properties?

Raju: The promoters' stake in Maytas Infra is 36 per cent, whereas in Maytas Properties, there is a combination of people from my immediate family to friends. It will be difficult to give an exact break-up. But as for me and my immediate family, we hold close to 35 per cent stake.

Motilal Oswal: Why did the company not think of a buyback?

Raju: In the last several months, there have been some drastic changes. Our confidence level is much lower than what would have been even six months ago. If the market, in which we are, is not going to provide a robust growth opportunity, it is up to us to use this liquid asset for growth.

Foreign Analyst: Given the 50 per cent drop in Satyam's ADR reflecting the investors' sentiment, is the process reversible?

Raju: Can't comment on reversibility.

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