Property and Land Banks are for greedy Goons and Politicians of the Indian society. However, Satyam's B. Ramalinga Raju was so fascinated by the property boom he thought of becoming the
Land Lord of Andhra Pradesh and ultimately failed bankrupting the successful IT Services Business. ET has quoted
that,
The family holds over 6,500 acres through Maytas Properties, the individual members in their personal capacity have significant holdings of agricultural land across south and western India.
and the cause of liquidity crunch...
One of the theories doing the rounds suggests they were trapped by a murky cocktail of political developments and a real estate crash. In the recent past, Maytas Properties and Maytas Infrastructure had won a number of prestigious projects. Maytas being awarded road projects even without proper bidding.
and the Real Estate House of Cards Crashes in India adding to Raju's woes
Political circles were said to have demanded funds from the family instead of land. Upcoming elections may have also forced members of the establishment to change their preference from land to money which put them in a fix.
and what Raju did now was lean on 24% money lenders....
Satyam's promoters raised huge funds from tobacco traders in Rayalseema district by pledging Satyam shares. The promoters may have assumed that they would be able to raise funds to recover the pledged shares through an IPO of Maytas Properties. But the downturn in the real estate market derailed Maytas Properties IPO plans thus bursting the bubble on Jan-07.
Kindly note that, hardworking intelligent Indians in Profession and Business please continue to do so as this property greed will take you no where. Invest in yourself, in your own business and see the fruits of success in long term :-)
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