The Company Law Board is not in favour of superseding the board of Maytas Infra. It said the government should, instead, appoint four more directors on the company?s three-member board. Of these, one could be a nominee of the domestic financial institutions that have stakes in the company, ICICI Bank and IDBI Bank. The remaining three have to be independent directors.

CLB is expected to make these provisions in its interim order on Friday. CLB?s refusal to supersede the board of Maytas Infra and instead give a board representation to the lenders is a setback for the government, which wanted the board to be removed.

The government had approached CLB last week, seeking to supersede the board of Maytas Infra, run by B Teja Raju, son of Satyam?s erstwhile chairman B Ramalinga Raju. The company along with Satyam is in the centre of India?s largest accounting fraud of Rs 7,800 crore. Ramalinga Raju is accused of diverting funds from Satyam to Maytas Infra and nearly 300 group companies, which are being investigated by different agencies. The hearings in the board ran on the same day as the government appointed board of Satyam met in Hyderabad to decide on the ways in which the IT company could be sold off.

CLB felt that while there was a fit case to supersede the Satyam board, as its chairman had acknowledged the fraud, the allegations against Maytas, of siphoning off funds and the like, were still under investigation, and hence, the board could stay on.

Appearing on behalf of the government, Sanjay Shourie said Maytas is not in a position to maintain the pace of execution of projects worth about Rs 20,000 crore. This would delay the projects and have a negative impact on the economy. He added that the Maytas Infra shares have also fallen as a result of its fraudulent activities. He said that as there are only three members on the board of Maytas Infra, there is no effective control on the management of its affairs.

CLB also decided to reserve its order on Maytas Properties, also promoted by the Rajus, and is likely to announce it on Tuesday.

Reacting to CLB?s view of appointing independent directors from ICICI and IDBI, CA Sundaram, the counsel for Maytas Infra, said, ?We need time to discuss this thing.?

Counsel for ICICI Bank and IDBI Bank, Vikram B Trivedi, said, ?We want to support the government as CLB has said that out of the four additional directors, one can be from ICICI or IBDI bank.?

Sundaram argued that if the board is superseded, the existing projects of the company will be delayed or remain incomplete.