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March 24, 2008

6:48 PM

OVER 917-907-2350

ANILKUMAR

RAJ RAJARATNAM (917-907-2350)

UNIDENTIFIED FEMALE

Unintelligible: UI

Inaudible: IA.

Phonetic Spelling: PH

Voice Overlap: II

. GOVERNMENT ·(:XHI~IT .

. ·S06-T

. S2 09. Cr.II84(Ji.iH)· .

Hello?

[Background noise]

Hey Raj, Anil.

Hey Anil, how are you?

Good. I'm in Tokyo.

Uh huh.

Uh ... you know the Chinese, uh ... you know, PC manufacturer that bought uh ... IBM, right? (UI) ... II

Lenovo?

Yeah.

Yeah, yeah.

They are very, very far in discussion with Fujitsu

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Uh-huh.

To buy their, uh ... PC business.

O.K.

So ... uh ... it's not a dead certainty yet, because ... 1/

Yes.

... you know to get uh ... a Japanese company to spin out a company and urn ... business and sell it is like an act of God.

Right.

But. .. but they are uh ... certainly quite advance in the uh ... dialogue. We're doing some confidential work.

Yeah. Huh. Anil, uhm ... I bought this Hindustan thing.

Yeah.

At least I asked the trader to buy it; I don't know how much he bought yesterday.

Yeah, yeah, yeah.

It's at 94 ... It's at 94.

Yeah, 125 is the price.

Right, so that's a certainty, right?

Yeah.

So everyday I'll accumulate a little bit whatever I can, in the market. II

And you know, I told you about that company that now went uh ... the private equity guys bought it for 40 percent premium. I really hope you bought their shares; it was called Tetio Inito (PH). If you remember I had ... I was doing ... 1/

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5 RAJ RAJARA TNAM: (UI), Yeah, uh .. , yeah, the (UI) ,
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7 ANILKUMAR: Yeah, yeah, yeah, yeah, So they got a 40 percent premium bid
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10 RAJ RAJARATNAM: O,K, Yeah, I know you told me .. , II
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14 RAJ RAJARA TNAM: ... 1 remember that, yeah. You said ... II
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18 RAJRAJARATNAM: ... to do some work on it, yeah. II
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24 ANILKUMAR: Yeah. Uh ... well, I'm going to Singapore on Monday.
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28 ANILKUMAR: And then I'm there till Thursday, and then I was presuming, based
29 on your plan, we'd fly on Thursday together.
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32 markets are doing, you know.
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37 II
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41 RAJ RAJARA TNAM: ... uh, you know, it's just crazy and I just need to be here, right?
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43 ANILKUMAR: I didn't check on what happened today, Was it down again?
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No, no, today the markets went crazy, uhm ...

Oh.

but, urn ... [Aside: I'll have a diet Coke.]

Diet Coke

[Aside: Yeah. CUI).] II

It's just very volatile.

Yeah, the thing is, you know, Friday ... I mean, when markets are down ... II

Hmm.

... you try to protect and all that, right?

Right, right. And then you ...

(UI). Um ... is everything going O.K. with the, uh ... processor company?

Uh ... no. So I had to tell you that.

Uhhuh.

Uh 11 to 15 percent reduction in revenues ...

O.K.

... uhm ... which they feel, you know ... you know, obviously it means they're going to completely be bleeding.

Right.

Uh ... they think uh ... uh ... their competitor is going to be between seven and nine percent down. But... II

Uh-huh.

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43 ... you know, h- ... how do they know what their competitor is gonna do. But they said compara- ... comparatively, they're going to look worse, right? Because ...

Right

... whilst both are down they're going to be another five percent further down, right?

Right. They're gonna (U1) ... II

Uh ... he didn't give me the actual profitability uh figure.

Right.

Uh ... so ... uh ...

No, but the investment's still going through?

Uh ... Oh that investment will proceed ... I mean, we are not sure what's happening, but it's proceeding.

O.K.

But, uh ... there's ... it's nothing that has prevented it right now.

Right. O.K. II

CUI)

Apparently they're losing ... SOlTY?

Sorry, this taxi driver doesn't know where he's going.

(Chuckles) O.K.

I mean. And uh ...

Tokyo. (UJ)?

(UI) in the middle of Tokyo. Uh ... Uh ... Yeah. sd. .. (Clears throat) so ... L. The ... the investment looks like it's going ahead.

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O.K. But you think it will be done with the announcement?

Uh ... not very soon.

O.K. II

So, the way it's working right now is, uhm ... the ... by not very soon, I mean it could take two more months. It's not like weeks. II

Oh my god. Right. Right. Right.

And in between they're gonna declare a completely shitty uh ...

Quarter.

... quarter. So that's ...

Right, right.

So that's the part that's very, uh, frustrating because, you know, what does that all mean for, even the transaction right? For them?

Right. So, I think if the market goes up what we have in that uh ... fund, I will sell it.

If the market goes up you sell it because we can fine tune the transactions a lot. .. II

Right.

... better than anyone else can, right?

Right, right, right. II

It's ... It's like on the Fujitsu-Lenovo deal I can't tell you exactly which week or day it will happen right?

Yeah but, yeah. I don't know how to play that, right? Because one is the conglomerate and, you know.

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43 No but Lenovo ... So I'll tell you how to play, it's very straight forward, Currently, as people are tightening the IT belt... II

Right.

... they're all looking for better deals ... II

Right

... Lenovo will be the winner in that, because obviously Dell and HP have a tougher time ... II

Right.

... to match the economics cost structure. II

Uh-huh.

Just to give you an example, McKinsey did a complete analysis and rehauled who ... who we are going to buy from, and all our PC's or laptops had been bought by Leno- ... from Lenovo.

Right.

O.K.? So, I think in a tightening environment, Lenovo will be the beneficiary, and then when they wind up suddenly actually consolidating for scale and getting this market, people will be positive. Now, you know, you're right, somehow markets may also say, "God, they've got this big bear of a cost structure now, because they've got this big fat high cost Japanese company." II

Right

... uhm ... but, in general, it's ... or ... or you wait a little and I'll give you a little better ideas as to how that whole thing is, you know, proceeding. Yeah ... II

O.K.

But there's good ... generally good news for Lenovo. On the processor guys uh .. .I think if the markets go up, take out the position and ... II

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17 Right.

... and then we stay very finely tuned on how the developments are.

Yeah.O.K.

Yeah?

O.K.

All right.

Thank you, Anil, Thank you.

O.K. Bye

[END OF CALL]

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