Maytas Infra diverted IPO money to group firms: Govt | india | Hindustan Times
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Maytas Infra diverted IPO money to group firms: Govt

india Updated: Feb 23, 2009 22:53 IST

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The government has alleged that Maytas Infra has diverted money raised from public to the group companies owned by kin of disgraced founder Chairman of scam-ridden Satyam B Ramalinga Raju.

"Substantial funds (raised through IPO by Maytas Infra) received in company's books of accounts have been diverted to group companies, associate concerns and subsidiaries. Most of the investments made are in the nature of interest-free loans and advances against the share application money," said the government in its petition before the Company Law Board (CLB).

The government's petition seeking dismissal of the existing board of Maytas Infra will come up for hearing on February 26. The company had earlier raised Rs 327.45 crore through a public issue and charged a premium of Rs 360 on shares of face value of Rs 10 each.

The government also said that B Rama Raju, son of Ramalinga Raju, had admitted before the authorities that he had prior knowledge of the sale of Maytas Infra to Satyam, a deal which was aborted following pressure from Satyam shareholders.

The government further said in its petition that the "corporate veil" of the company should be lifted to see who are the persons in control of the affairs of Maytas Infra. "It will throw light on the present state of mismanagement, gross negligence and persistent financial irregularities into the running affairs of the company."

The government further alleged that Maytas Infra was holding land, to "ensure such holding ultimately to the interest of companies such as Satyam Computer in view of the interconnection between the two companies, to the tune of Rs 2,826 crore".