From:Manish Somani
To:rajeshjain@netcore.co.in
Subject: Mr. Jain - Please come clean
Date: Wed, 14 Jan 2009 11:06:30 IST marketing@netcore.co.in,cleanmail@netcore.co.in,bhayasalkar@netcore.co.in,kalpit@netcore.co.in,amprasad@netcore.co.in
Dear Mr. Rajesh,
Satyam Infoway paid Rs 499 crore to acquire IndiaWorld, a compilation of portals with a turnover of paltry Rs 1.3 crore and you in turn became a pseudo techopreneur. The consideration amount paid by Satyam would have surprised many investors but the world was tech crazy then.
Frankly, as a shareholder of Satyam I was worried about its propensity to pay so much more when it could have paid far less for a dud site with 1.3 crore turnover outfit with 20 people. The price represented a multiple of 50 times IndiaWorld’s annual revenue of Rs10m and 2,000 times its net profit of Rs 250,000. Rediff-on-the-net attracts more eyeballs than Indiaworld at that time.
IndiaWorld’s high valuation was, in large part, due to the tremendous brand equity of its portals (khel.com, khoj.com and dhan.com, among others). But why value something that cannot be seen or felt at that price.
Some of the expert felt that the value of a company varied depending on the buyer. For example, a strategic buyer could be willing to pay a higher price for a company compared to a financial buyer. Analysts argued that the acquisition of IndiaWorld by Sify was made with a strategic objective. Now I suspect Raju had an ulterior strategic objective. The market suspects that you might have some clandestine dealing with him as well.
Acquisition by Satyam Infoway could mark the start of the company siphoning funds overseas under the pretext of acquiring companies. The purchase coincides with the eight-year period for which the data has been fudged. There are so many questions that the Indiaworld acquisition raises, which Raju can probably answer now. I think you need to make your dealings clear as well.
Please brief us about your point of view on this. Mr. Jain characters is much easier kept than recovered and remember to make yourself an honest man, and then you may be sure there is one less rascal in the world.
Best,
Manish
Link of the post on http://emergic.org/2009/01/08/a-satyam/


















































