NEW DELHI: Infrastructure Leasing & Financial Services Ltd., (IL&FS), which had approached the Company Law Board (CLB) in February to takeover the troubled-Maytas Infra Ltd., has finally succeeded. The CLB in its order issued on Monday permitted IL&FS to induct four directors including its chairman, into the Maytas Board. IL&FS, which gained management control by virtue of being the largest shareholder with 37.1 per cent stake in Maytas, will also pump in Rs 55 crore to revive the firm.
“IL&FS will be the new promoter of Maytas following an order of the CLB,” announced Salman Khurshid, Minister for Corporate Affairs, at a press conference here. Following the appointment of the new directors, the current promoter and director Teja Raju, son of disgraced Satyam founder B Ramalina Raju, will quit the board along with another director B Narasimha Rao.
Interestingly, when IL&FS had approached the CLB in February seeking representation on Maytas board, it rejected the request terming IL&FS as a competitor. Subsequently in March, IL&FS increased its holding by 4.89 per cent by foreclosing its rights on pledged shares.
As of June 2009, the promoters including Ramalinga Raju, Teja Raju, Rama Raju and Nandini Raju held 35.23 per cent, of which 13.73 per cent has been pledged or encumbered. IL&FS, which currently holds 14.5 per cent stake directly in Maytas, has been allowed to foreclose its rights on 22.6 per cent shares, which would take its total holding in the company to 37.1 per cent.
Maytas plunged into a crisis after Ramalinga Raju made a futile attempt to merge it with Satyam in December, 2008. Subsequently, the company lost several projects including the Rs 12,132-cr Hyderabad Metro Rail. The CLB superseded the then board and nominated four directors namely Ved Jain, O P Vaish, K Ramalingam and Anil K Agarwal to put the company back on track.
Khurshid said the government will recall two nominees, while the other two will remain on the board for two years. Who will stay and who will go will be decided soon.
Similarly, as per the CLB order, IL&Fs will have to hold a minimum of 26 per cent in Maytas for two years. Meanwhile, on the diversion of money from Maytas to Satyam, Khurshid said, “there is no evidence of Satyam money flowing into Maytas but there are possibilities of money having gone from Maytas to Satyam.” He said Rs 390 crore had been routed to Satyam from Maytas but hastened to add that investigations were still on. The government-nominated directors of Maytas had earlier said they would recover recover Rs 600-crore -- including Rs 380 crore belonging to Maytas Infra and Rs 220 crore belonging to Maytas Properties -- which was lent to about 14-15 companies in the form of Inter Corporate Deposits (ICDs). Those 14-15 companies, in turn, had allegedly pumped the money into Satyam.
Maytas posted a net loss of Rs 489.79 cr during FY09 compared with Rs 99.64 cr net profit in FY08. In July, 2009, to help revive operations, lenders have approved a corporate debt restructuring package of Rs 600 crore.
