The Company Law Board (CLB), which is hearing a petition by the government for taking over the Maytas Infra board, is likely to give its ruling on Friday as arguments remained inconclusive.
Maytas Infra is run by B Teja Raju, the elder son of B Ramalinga Raju, who confessed to manipulating the accounts of Hyderabad-based Satyam Computer Services.
The principal bench of CLB headed by chairman S Balasubramanian has suggested that the Maytas’ board should retain its current board and also have government-nominated independent directors. The bench also hinted giving board representation to its lenders, IDBI Bank and ICICI Bank.
However, it was against to give a board seat to IL&FS, leading non-banking finance company, citing conflict of interest as the financial institution had given loans to the promoters against pledging of shares.
In today’s hearing, the bench observed that if new board is put in place then they would need to start from scratch and so it suggested retaining the current board members of Maytas Infra along with additional government appointed directors. The CLB has sought reply from Maytas Infra by tomorrow.
The government counsel today said that as investigations are on in Maytas, a hostile management wouldn’t cooperate and the present board should be restrained from acting as directors.
The government also said that there is evidence that the firm fudged its accounts with deceit and fraudulent intent, which brought the share price of Maytas Infra from Rs 525 to Rs 46 today.
The government last week had moved CLB for taking over the boards of Maytas Properties (run by Ramalinga Raju’s younger son B Rama Raju) based on information that management of these two companies had indulged in fraudulent activities and financial irregularities.
The government had petitioned the CLB to allow it to takeover the Maytas Infra board along with removing the board members of both, Maytas Infra and Mytas Properties, and replace them with government nominees. While the CLB has reserved its order for Maytas Properties, it is likely to pass an interim order for Maytas Infra tomorrow.
