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August 17, 2010Maytas chequered history
Maytas Infrastructure has seen many controversies in its short span of like since inception by its promoters the Rajus of the infamous Satyam scandal.The company came into spotlight when Ramalinga Raju tried to merge it with IT company Satyam to hide his siphoning of Satyam’s cash over the past 10 years.The company which still has the Raju family as substantial equity holders,was then given over to IL&FS management by India’s Company Law Board (CLB) after the scandal.Note Maytas has won infrastructure projects in various states including the famous Hyderabad Metro project.However after the bursting of the scandal many of these projects were cancelled.IL&FS increased its stake to 36% and took over the management.Since then the company stock price has been trending up as the firm got its act together
IL&FS tries to sell stake to BinLadin Group
IL&FS had recently decided to sell a 20% stake in the company to Saudi BinLadin Group which ironically is another tainted company with family association with Osama BinLadin.This has been rejected by the CLB on the grounds that stake sales in the company are not allowed for 2 years.The Board has lashed out at IL&FS for forgetting the strictures under which the company was given to the management of IL&FS.The government appointed directors had also been silent at the flouting of these norms.Note the company has already sold the preferential shares in the company without the approval of the CLB.Now IL&FS finds its reputation tarnished due to the jinxed Maytas.I am not superstitious by nature but it definitely seems that Maytas brings bad luck to its promoters.
CLB rejects IL&FS stake sale in Maytas to Saudi BinLadin – Yahoo
The Company Law Board has thrown a spanner in the plans of IL&FS-promoted Maytas Infra Ltd to allot 20 per cent preferential rights shares to Saudi BinLadin group. It has lashed out at the Rs 955-crore infrastructure company for not taking its approval before planning to raise equity from any investor. Before the allotment of rights shares, IL&FS held 37 per cent in Maytas Infra Ltd.
According to government officials, the CLB has also dismissed the company’s petition to induct four directors from the Saudi Arabia-based firm. An official told The Indian Express, “The allotment of 20 per cent rights shares to SBG Projects Investments Ltd shall wrest the sole management control of the company from IL&FS and tilt the balance of the management control in favour of SBG and shall thus be in contravention within the order dated August 31, 2009.” The CLB’s order may jeopardise the company’s expansion plans.
The SBG had on June 19 entered into a shareholders’ agreement with IL&FS to acquire a 20 percent stake in Maytas Infra for Rs 301.92 crore. The shareholders approved the proposal in an extraordinary general meeting on July 19. Subsequently, preferential shares were allotted to SBG Projects Investments Ltd on July 30. The proceeds were to be used partly to de-leverage and partly to pursue the growth requirements of Maytas Infra Ltd. The company’s loan funds stood at Rs 900 crore for the year ending March 31, 2010.
The CLB, however, took a strong exception to the move and said, “The share subscription agreement dated June 19, 2010 was taken without the prior approval of the CLB”. Last year when IL&FS took over Maytas Infra, the CLB had, in an order in August 2009 said there should be no dilution of the company’s management control for two years. It further said that the stake of IL&FS should not fall below 26 per cent.