SFIO to probe two Maytas firms

The government today expanded serious fraud investigation office (SFIO) probe by including Maytas Infra and Maytas Properties — the two companies run by sons of B Ramalinga Raju, who had earlier confessed to manipulating accounts of Satyam Computer Services.

SFIO, which was earlier asked to look into the accounts of Satyam after the registrar of companies (RoC) submitted its report, will be given three months to submit its report.

The decision comes after SFIO investigators, an interdisciplinary agency formed to unravel the complex corporate fraud, had established ‘nexus’ between Satyam and the two Maytas firms.

“To uncover the facts relating to the events in Satyam, it is necessary to obtain information, records, books and papers from the above two companies,” Prem Chand Gupta, minister for corporate affairs, told reporters outside his office. However, he refused to provide details of the nexus between Satyam and two Maytas companies. Satyam had proposed to fully acquire Maytas Infra and Maytas Properties for a total consideration of $1.6 billion (or Rs 7,914 crore) in December 16. But it was called off when shareholders vehemently opposed it.

When asked whether the boards of two Maytas firms will be superseded like it was done in Satyam, Gupta said, “SFIO would undertake extensive investigation into the two (Maytas) companies. We will take action based on the information available.”

The ministry of corporate affairs had superseded the existing board of Satyam after it got an interim order from the Company Law Board (CLB) to appoint its own nominees. Subsequently six directors were appointed and they have held two boards meetings so far.

Under the Companies Act, the government has the power to order investigation into the affairs of any company under section 235. SFIO, under this provision, hold all powers to investigate the role of former and present directors, management, auditors and banks.