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Maytas Properties pleads innocence at CLB hearing

Maytas Properties pleads innocence at CLB hearing
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First Published: Wed, Feb 25 2009. 09 12 AM IST
Updated: Wed, Feb 25 2009. 09 12 AM IST
New Delhi: The Company Law Board, or CLB, on Tuesday heard arguments for and against a government takeover of Maytas Properties Ltd.
Maytas Properties is a real estate firm promoted by B. Rama Raju, the son of jailed Satyam Computer Services Ltd founder B. Ramalinga Raju.
Appearing for the company, senior Supreme Court advocate Mukul Rohatagi said: “The CLB should put an observer on the Maytas board, who would report to you, or appoint a director in the company.”
Arguing in favour of a takeover, a senior official representing the government said Maytas Properties created 151 subsidiaries, of which only 37 were reflected on the company’s balance sheet. Besides, Maytas’ 6,000 acres of land bank was also not reflected on the balance sheet.
The government also argued that Maytas Properties had taken unsecured loans to the tune of Rs600 crore, while the secured loans were only Rs117.78 crore. The company had also taken advances worth Rs419 crore, the CLB was told.
Taking cue from Satyam Computer’s Rs6,400 crore proposal earlier to acquire Maytas, the government said there was a clear nexus between the father and the son.
Accounting and audit firm Ernst and Young had valued Maytas Properties at Rs6,523 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 Rs22 crore, was valued at Rs6,523 crore,” the government representative said.
Rohatagi said that no fraud had taken place at the company. “There is no allegation by any bank or financial institution or any police report regarding the company,” he said.
S. Balasubramanian, chairman of the CLB, said the two sides argued for four hours. He said the CLB will announce its decision sometime this week or latest by Monday.
(PTI contributed to this story.)
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First Published: Wed, Feb 25 2009. 09 12 AM IST