Ernst & Young did Maytas Properties Valuation of Rs 6523 crs in just one Day !?

Just read a very interesting update on Maytas Properties in todays’ edition of Financial Express

Maytas Properties is facing the prospects of the Government taking it over the Board,just as they did for Satyam

The matter was being heard by the Company Law Board (CLB) and the company’s counsel suggested that the Government could appoint an observer or a Director on the Board…This was opposed by the Deputy Director,who represented the Government…He wants the Government to take over the Whole Board and thus the Company itself.

The Deputy Director made some interesting arguments on the Ernst & Young (E & Y) Valuation of Rs 6523 crs of Maytas Properties

• There was a clear nexus between Father,Ramalinga Raju of Satyam, and Son,B Rama Raju,of Maytas Properties as they had relied on the E & Y Valuation to justify Satyam’s Proposal to takeover Maytas
• This Valuation is Hollow as Maytas,as per government knowledge, has no land bank and has just a turnover of Rs 22 crs but the valuation was done at Rs 6523 crs
• Government Alleges Fraud in the Valuation….E & Y has said in it’s Valuation report that they have valued all Maytas’s 31 projects in Chennai     ,Hyderabad,Bangalore and Nagpur and except for the Electronic City Project in Bangalore,land has been acquired
• The fact is that Maytas Properties does not have any land.Some of it’s subsidiary companies have Development Rights,not lands….so the only asset the subsidiaries have are these rights
• CLB Chairman,S Balasubramanian enquired whether E & Y did the Valuation in a Week..to which the Deputy Director replied ” No,the Valuation was done in a day only.”

So we have Two of the Big Four Accounting Firms facing bigtime flak in this sordid Satyam Saga…Price Waterhouse as Satyam auditors and Ernst & Young as Maytas Properties Valuers

What’s going to come out next !