Maytas Infra set to oppose government move in CLB

19 Feb 2009

HYDERABAD: In a rearguard action, the management of Maytas Infra has decided to contest the Department of Company Affairs petition to supersede the board of directors and takeover the management of the company. The opposition from Maytas Infra will be expressed at the Company Law Board (CLB) when the matter comes up for hearing on Febraury 24, a press release from the company suggested. The press release said that the company has already filed a caveat before the CLB and sought a copy of the DCA application. However as of yet, Maytas Infra has not yet got a copy of this.

Analysts were surprised to hear Maytas' contention and averred that this was a last ditch effort by the Rajus to save at least part of their empire. "Ramalinga Raju knows that Satyam has slipped out of his hands. He probably wants to at least save Maytas," an analyst said. Lawyers were not ready to guess the line that would be taken by the Rajus before the CLB but averred that they could argue that it would be unfair to tarnish Maytas with the same brush as Satyam. They would also argue that there was nothing found in the investigations to suggest wrong doing in the company. " And if something wrong has been found why a police complaint hasn't been filed, they might argue," analysts said.

There was however no release from Maytas Properties suggesting that they too would file a similar caveat before the CLB. But analysts did not rule out the possibility of this happening.

Incidentally the entire shareholdings of the Rajus in Maytas Infra has been pledged to financial institutions. Since the Rajus are apparently in no position to buy back these shares, the companies can be said to be promotorless. But analysts however wondered if the Rajus still owned some equity in Maytas Infra through some body corporates. This could be the basis for their contention for allowing them to remain as promoters.

Government of Andhra Pradesh representatives who had been meeting the whole of Wednesday to figure out the fall out of the Department of Company Affairs bid to takeover the company, remained non committal on their stand on the whole affair, including the rearguard action by the Rajus.

As of now, Ramalinga's elder son Teja is the acting chairman of Maytas. There are two other directors: one of them has been inducted last fortnight, while the other is a radiologist from the US.