Tension between Raju brothers over Maytas control

26 Jan 2009

HYDERABAD: Although they are in jail together, investigators have discovered simmering tension between Ramalinga Raju and his younger brother Rama Raju. It's learned that Rama Raju has told cops that he did not script the Satyam scandal and that he was unnecessarily dragged into the matter.

The cops have also got an indication that there were problems between Rama Raju and his nephews, particularly Teja Raju, the elder son of Ramalinga Raju. "The story of a closely knit family standing through thick and thin is by and large a myth," said a source who knows the Raju family well.

The major cause of tension between the two brothers and the uncle and nephew was over the control of Maytas Infra and Maytas Properties, which are the two companies that Satyam wanted to take over last month.

Maytas Infra was founded - as Satyam Constructions - in 1988 by the three Raju brothers. While the middle brother, Suryanarayana Raju, just held shares in the company, Ramalinga Raju (better known as Raju) and Rama Raju (better known as Ramu) were both shareholders and formed part of the management of the company.

The trouble began when Ramalinga's elder son Teja was inducted as a director in the company in 2001, on turning 22. Matters came to a head in late 2006 when Ramalinga Raju persuaded his two brothers, Rama and Suryanarayana, to step down from the directorship of the company - a position that they had been holding since inception.

What further complicated matters was the public issue of the company (by now renamed Maytas Infra). On the eve of this maiden issue in mid-2007, Ramalinga was able to convert this company into virtually a Teja Raju enterprise. Teja was named promoter of Maytas Infra and the promotor group included Ramalinga Raju, wife Nandini, younger son Rama Raju (junior), Teja's wife Divya and Anjali, the minor daughter of Teja. A clutch of 42 companies - in which Teja or Nandini were the major shareholders - also became part of the promoting company, much to the chagrin of the other Raju brothers.

Simultaneously Ramalinga Raju started aggressively pushing Maytas Properties, a company he had founded in 2005 for his younger son, Rama Raju (junior). A public issue was also planned for the company, which has a land bank of 6,800 acres.

"Rama Raju was in awe of his elder brother Ramalinga and was virtually a shadow of the latter though the age difference between the two is merely four years. Lately, he had started resenting his elder brother's plans but could never muster enough courage to counter him publicly," says a source.

Middle brother Suryanarayana, the least educated of the three, too, could not resist Ramalinga, who had come to have a towering public image. The empire was built largely due to the planning of Ramalinga, although Suryanarayana dealt with land affairs.

Presently, the police is looking for Suryanarayana but he is absconding.

Interestingly, in Satyam, the company that has now slipped out of the hands of the Raju duo, the two were almost equal partners. Raju and Ramu owned shares in Satyam through SRSR Holdings. But in this holding company, Raju and his wife collectively held 47.60% of the shares against 52.40% held by Ramu and his wife Radha. "This might explain why Raju was focussed on Maytas because that's where his future lay," an analyst said.