THROUGH A statement last week, Maytas Infra Limited said that its government-appointed board is optimistic about the company’s future and a chief executive would be appo inted soon (Maytas Infra is one of two companies controlled by the sons of disgraced Satyam founder B Ramalinga Raju).
Check out the names: K Ramalingam, a former chairman of the State-run Airports Authority of India, is the chairman of the Maytas board and other members include Anil K Agarwal, former president of Associated Chambers of Com – merce and Industry (ASSOCHAM), corporate lawyer OP Vaish and Ved Jain, former president of the Institute of Chartered Accountants of India (ICAI).
But the million-dollar question now being asked is how did Jain moved from ICAI to the boards of both Maytas Properties and Maytas Infra. “Two of his close relatives are still in senior positions in Ernst & Young (E&Y). This means a conflict of interest in a consulting profession,” said a top official of the Finance Ministry monitoring the Satyam scandal, ad – ding, “We will soon probe whether E&Y deliberately overvalued these two companies and hyped their market value.”
E&Y is already in the dock for its incorrect valuation of the two Maytas companies at Rs 6,523 crore. A detailed investigation has revealed that the Hyderabadbased real estate firm did not have a land bank of 6,800 acres. But Maytas has argued that it is standard practice for developers to have development agreements under which the landowner cannot sell his land to any other entity or individual, an argument that has cut little ice with the Ministry of Company Affairs.
That action will be taken against Maytas and E&Y is certain. It needs to be seen who moves first, the Ministry of Company Affairs or Finance.