Maytas for CLB-appointed director on firms board

Written by Press Trust of India | New Delhi | Updated: Feb 26 2009, 04:30am hrs
Maytas Properties, facing a takeover by the government, suggested that the Company Law Board should appoint a director on its board or put an observer, who would report directly to the quasi-judicial body on Tuesday.

During the proceedings before the CLB, senior advocate Mukul Rohatagi appearing for the company submitted, The CLB should put an observer on the Maytas board, who would report to you, or appoint a director in the company.

But the deputy director appearing for the government opposed it and requested the CLB to direct to take over the board of the company, run by B Rama Raju, son of scam-tainted Ramalinga Raju of the Satyam Computer Services.

Raising suspicion over Satyam Computers Rs 6,400-crore proposal to acquire Maytas, based on the valuation by audit firm Ernst & Young, the government said there was a clear nexus between father and son.

The accounting and audit firm E&Y had valued Maytas Properties at Rs 6,523 crore.

How hollow this valuation is... As per our knowledge, the company does not have any land bank and this company, having a turnover of a mere Rs 22 crore, was valued at Rs 6,523 crore, submitted the government.

Alleging fraud in the valuation, he submitted that Ernst & Young, which had valued all Maytas 31 projects in Chennai, Hyderabad, Bangalore and Nagpur, said except the Bangalore-located Electronic City, land for all projects had been acquired.

In fact, Maytas Properties does not have any land. Some of its subsidiary companies have development rights, not lands... The only asset the Maytas subsidiary has is development rights, submitted the deputy director.

Later, CLB chairman S Balasubramanian asked whether this entire valuation was done in a week.

On this, the government replied, No, the valuation was done in a day only.