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RoC’s inspection report slams Maytas Infra

RoC’s inspection report slams Maytas Infra
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First Published: Thu, Jul 16 2009. 09 40 PM IST

Dire straits: A Maytas Infra construction site in Bangalore. The Registrar of Companies has in its report stated that the company gave unfair benefits to its subsidiaries Maytas Property and Maytas Hi
Dire straits: A Maytas Infra construction site in Bangalore. The Registrar of Companies has in its report stated that the company gave unfair benefits to its subsidiaries Maytas Property and Maytas Hi
Updated: Thu, Jul 16 2009. 09 40 PM IST
New Delhi: The final inspection report of India’s registrar of companies (RoC) on Maytas Infra Ltd, submitted to the ministry of corporate affairs, presents a dismal picture of the state of affairs in the company.
The report, which has been viewed by CNBC-TV18, alleges violations of several provisions of the Companies Act, 1956, by the Hyderabad-based firm. It also calls for prosecution of B. Teja Raju on various counts, including lying under oath to an investigating officer.
Dire straits: A Maytas Infra construction site in Bangalore. The Registrar of Companies has in its report stated that the company gave unfair benefits to its subsidiaries Maytas Property and Maytas Hill County. Hemant Mishra / Mint
Teja Raju is vice-chairman of Maytas Infra and son of B. Ramalinga Raju, founder of Satyam Computer Services Ltd, who admitted to India’s biggest corporate fraud in January.
The report also recommends action against the company’s auditors—S.R. Batliboi and Associates, and Hyderabad-based Krishna Prasad and Prasad. S.R. Batliboi and Associates is an affiliate of Ernst and Young.
The RoC report alleges that Maytas Infra’s balance sheets do not present a “true and fair picture” of its accounts.
The report also says that Maytas Infra disbursed loans to its directors in violation of section 295 of the Companies Act.
It also alleges that the firm gave unfair advantage to its subsidiaries by awarding contracts to Maytas Property and Maytas Hill County.
In addition, the company, RoC says in its report, violated section 372A of the Act by taking bank guarantees on loans raised by other companies without due procedure.
An official overseeing the affairs of the company said that Maytas Infra had not yet heard from the ministry regarding the RoC report or its findings. He added that the Maytas board has recently appointed a Hyderabad-based audit firm as the internal auditor to check the veracity of the Maytas accounts for the past three years. Once the report comes in, the board may decide on a course of action with regard to its findings, the official said on condition of anonymity.
The board of Maytas Infra is scheduled to meet on 18 July to take stock of the company and various related issues.
cnbctv18@livemint.com
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First Published: Thu, Jul 16 2009. 09 40 PM IST