Teja Raju is CEO of Maytas Infra

Teja Raju, the eldest son of B Ramalinga Raju, founder and Chairman of Satyam Computer Services, has taken additional charge as chief executive officer (CEO) of the 23-year-old Maytas Infra, one of the company in which the software maker had proposed to buy a 51 per cent stake.

The move comes after the arrest of Maytas Infra CEO PK Madhav on December 16, 2008, along with KS Raju, chairman of the Nagarjuna group, over the alleged failure of Nagarjuna Finance (originally promoted by the Nagarjuna group) in repaying about Rs 100 crore to its depositors. Madhav was on the board of Nagarjuna Finance when it raised deposits from the public. Teja Raju will continue as the vice-chairman of Maytas Infra, which is engaged in building the Rs 12,000-crore Hyderabad Metro Rail project.

“The arrest of Madhav is sub judice and the law will take its course. Teja Raju, our vice-chairman, has assumed the role of the CEO as an additional responsibility with immediate effect in the interim,” a company spokesperson told Business Standard.

Maytas Infra, in which promoters including Ramalinga Raju and his sons hold 36.64 per cent stake, was mired in a controversy following the investors outrage against Satyam’s bid to acquire Maytas Infra and Maytas Properties for $1.6 billion. Institutional investors own 10.92 per cent of Maytas Infra.

Dispelling doubts, the company spokesperson said the progress of the Metro project was on track and the company has engaged two international engineering consultancy firms.

“Currently, preparation of tenders is underway and we are also in advanced stages of finalising the project information memorandum to submit to banks for financial closure, which is scheduled to be achieved by March,” he added.

On concerns over raising funds for the implementation of the project, he said Maytas' contribution to equity was over a period of four years and it will be utilising all options available to subscribe its share of the equity.

Maytas may sell fresh shares, liquidate existing investments and resort to additional borrowings apart from using its own cash to meet the financial commitment for the project.

Maytas Infra reported a profit of Rs 17 crore on a turnover of Rs 354 crore for the second quarter ended September 30, 2008. For the half year, its profit and turnover stood at Rs 37 crore and Rs 738 crore, respectively. Its current orderbook stands at Rs 11,000 crore to be executed in the next 30 to 36 months.