FIs seek to dissolve Maytas Infra board; Karnik Satyam chief

The institutions have approached the ministry of corporate affairs requesting it to invoke powers under the Companies Act to supersede the board of Maytas Infra and allow the institutions to claim ownership of the company

Hyderabad: Financial institutions (FIs) that have lent funds to promoters of Maytas Infra Ltd, promoted by family members of jailed Satyam Computer Services Ltd founder B. Ramalinga Raju, have approached the government to dissolve the board of the infrastructure company, according to people familiar with the development, who declined to be identified.
Meanwhile, the government announced that the former president of software lobby group Nasscom, Kiran Karnik, had been appointed chairman of the new board of Satyam.

Satyam’s woes began in the middle of December with a failed attempt to acquire Maytas Infra and Maytas Properties. On 7 January, Raju disclosed that, over the years, he had fudged the company’s accounts to the tune of at least Rs7,136 crore.
Since then, Maytas, too, has come under the scanner of regulators and government departments investigating the fraud, some of its board members have resigned, and at least a few contracts awarded to it previously have been cancelled by awarding companies and local governments.

Infrastructure Leasing and Financial Services Ltd (IL&FS), Sicom Ltd and IFCI Ltd loaned money to the promoters of Maytas Infra against shares pledged, but it was not immediately clear as to how much of the company’s holding has been pledged or how much money has been raised thus.

Sicom, an investment and industrial development body of the Maharashtra government and development finance institution IFCI informed Maytas Infra on 21 January that they had together acquired 24.39% of the firm’s equity through invocation of shares pledged by some shareholders of the company. The company, in turn, informed the stock exchanges about this development on the same day. Maytas Infra did not respond to queries on the subject.

A senior executive at Maytas Infra, who declined to be identified, claimed that the promoters held shares in the non-promoter quota and had not disclosed shares pledged despite a generic instruction to this effect by the country’s stock market regulator Securities and Exchange of India.

A senior executive of one of the lending institutions, who also did not want to be named, said: “The institutions have approached the ministry of corporate affairs requesting it to invoke powers under the Companies Act to supersede the board of Maytas Infra and allow the institutions to claim ownership of the company.”

Mint could not independently verify this. IL&FS managing director, Hari Shankaran, said he was not “in the loop on this subject”.
However, a senior IL&FS official, who declined to be identified, confirmed that the institution did “approach the ministry of corporate affairs asking it to appoint additional directors on the board of Maytas Infra under section 408 of Companies Act to handle the affairs of the company”.

The promoters of Maytas Infra hold 36.64% of the company’s paid-up equity of Rs58.85 crore under the promoters’ category. While institutions have 13.56%, other shareholders hold 49.79% stake, according to data as on 31 December. On Friday, according to Dow Jones, Maytas Infra told the Bombay Stock Exchange that the promoters had pledged 15.15% stake and that B Ramalinga Raju had pledged his entire stake as part of this.

Maytas Infra ended the year to March 2008 with Rs1,660.15 crore in revenue and a net profit of Rs99.99 crore.
325 firms; new chairman
Meanwhile, minister for corporate affairs Prem Chand Gupta said on Friday that as many as 325 companies and 25 individuals are part of the investigation by its Serious Fraud Investigating Office.

“Some of them listed, some of them, private,” he added.
Meanwhile citing un-named persons, PTI reported that Satyam’s new management had pledged land to secure a Rs600 crore term working capital loan, which was granted by IDBI Bank LtdBank of Baroda and Life Insurance Corp. of India.
On Friday, on the heels of National Australia Bank Ltd suspending future contracts to Satyam, the World Health Organization (WHO) said that it was watching the developments at the technology vendor, but is yet to find any evidence of fraudulent practices by the company as a vendor.

“WHO is reviewing carefully its current contractual agreements with Satyam and possible contingency arrangements for completion of (current) project work, in the event that Satyam were no longer able to perform,” a WHO spokesperson told PTI.