NO SUPERSEDING :CLB wants four directors on Maytas Infra :One Of Them To Be Chairman

The Company Law Board on Friday suggested appointment of four independent directors on the board of Maytas Infra, including a chairperson, which was accepted by the Raju-family controlled company but opposed by the government.“I would appoint four persons on the board of Maytas Infra. Out of the four, one would be appointed as chairman. Let the appointed board take its course,” CLB chairman S Balasubramanian suggested during the hearing on the government’s plea to supersede the company’s existing board.

While this was accepted by the counsels representing Maytas Infra, the government counsel opposed the suggestion, pleading for sacking of the existing board. “The central government has no faith in the present management of the company. They themselves are denying any fraud in the company and now deciding who should be appointed on the board of the company,” the government counsel argued. Maytas Infra, listed on the stock exchanges, has seen resignations by its directors, following the confession by Satyam’s disgraced founder B Ramalinga Raju of cooking up the company’s books.

While RC Sinha, the non-executive director and chairman, resigned on January 9, the company’s CEO and director PK Madhav resigned on January 19. Of the three independent directors — CS Bansal has resigned, while CS Mohan passed away in November last year.

RP Raju is now the only independent director on the company’s board. And while Teja Raju continues as vice-chairman, the company had on January 30 appointed B Narasimha Rao (v-p contracts and claims division and head, corporate affairs) as a director.

Balasubramian refused to take any immediate decision on sacking the existing board and asked the government to furnish evidence supporting their demand. “You want to supersede at this stage, I disagree... Show me the material evidence. I want to see it before taking any decision. I have to follow principles of law and cannot go merely on allegations... Tell me incidences, how company is suffering? How they are not discharging their duties? How it has affected the public interest...,” the CLB chairman said.

IL&FS — that also holds a stake in Maytas Infra as Satyam promoter family pledged shares to them — suggested while the existing directors of Maytas should be allowed to continue, they should not be allowed to vote. “Let them contribute with their experience, but not vote,” said Ashok Desai, former Attorney General and senior advocate who appeared for IL&FS. However, this was opposed by the counsels of the Maytas Properties saying it would amount to indirectly superseding the board.
Source:- The Times of India 28 Feb. 09 Delhi P.27