Government nominates 2 on Maytas Infra board

Written by Corporate Bureau | New Delhi | Updated: Mar 6 2009, 05:54am hrs
Bringing order
The government on Thursday nominated two independent directors to the board of Maytas Infra on the directions of the Company Law Board (CLB). It appointed one director on the board of Maytas Properties as well. Corporate affairs minister Prem Chand Gupta said two more directors, including the new chairman, will be appointed on the Maytas Infra board later to fill up the seven-member board.

IFCI, the financial institution that holds a 17.4% stake in the company, has asked for a seat on the board, but the government is yet to decide on that. CLB, which ordered appointment of four directors on the companys board, said one should be from a financial institution.

Gupta said the two appointments for Maytas Infra cleared were of former ICAI president Ved Jain and noted tax lawyer OP Vaish.

Jain will double up as director at Maytas Properties.

The government had moved the CLB for dissolution of the companys board, after the Rs 7,800-crore accounting fraud by parent Satyam Computer Services and the two companies broke out, but the bench said there was no proof yet of a nexus between the boards of Satyam and the two Maytas companies. The bench had ordered superseding the Satyam board. But it has put down a condition that the two Maytas boards would furnish monthly reports on the affairs of the companies to the government and CLB, starting next month.

Ved Jain told Fe he was happy the government had put its faith in him, but declined to say the steps he will suggest to put the company back on the rails.

CLB noted that the boards will have the full powers to deal with the affairs of the companies and no agency will initiate any civil or criminal proceedings against the nominated directors without its prior approval. According to the CLB order, in Maytas Infra, the quorum of four will require the presence of at least two nominee directors and one existing director.

In Maytas Properties, CLB said, the quorum of the board meeting would be of three directors, including one nominee director, whose vote would be mandatory on any decision.

Gupta said the government had agreed to the arrangement proposed by CLB, as it allows government control in the conduct of affairs of the two companies, without compromising with the imperative of revamping the management of these firms.

The Serious Fraud Investigation Office, under the ministry of corporate affairs, is probing into the affairs of the twin Maytas companies.

Gupta also said that the prospective buyer of Satyam Computer Services will have to make an open offer of 20%. Whether it (stake to be offered in Satyam) is 31% or 26%, anybody coming in would have to make an open offer of 20% in the market and then the number of shares with the person or with the bidder could be higher than 31% or 26%. So, that is not an issue.