The Company Law Board (CLB) today allowed IL&FS owned Maytas Infra to induct on its board four nominees of Saudi Arabia-based real estate company Saudi Bin Ladin Group (SBG).
CLB Chairman Dilip Raosaheb Deshmukh today allowed the plea of Maytas Infra to induct four nominees of SBG on its board of directors.
CLB's approval came after SBG filed an undertaking stating that the control of management of Maytas Infra would remain with IL&FS despite the induction of SBG nominees.
Last year, IL&FS took over cash-strapped Maytas Infra, once promoted by the kin of disgraced Satyam founder B Ramalinga Raju. As per the takeover rules, the company has to seek CLB approval before making any changes in management control before September-October, 2011.
Deshmukh said that based on the facts before the CLB and "in the best interest of the R1 company (Maytas Infra) and its stakeholders...Subject to undertaking given by SBG Project Investment Ltd by filing an affidavit before me, I....Recall the order dated August 10, 2010 and now permit the appointment of four nominees directors of SBG Project Investment Ltd on the board of R1 company."
SBG, on November 01, 2010, assured CLB in an affidavit that Maytas' management control will remain with IL&FS.
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"Notwithstanding anything contained in shareholder's agreement, the control of management of Maytas Infra will continue to remain with IL&FS," SBG said in the affidavit.
SBG's undertaking came after the CLB had on October 18 asked Maytas Infra to furnish an undertaking by the Saudi Arab-based firm in this regard.
The company had approached CLB on October 13 for the second time in three months, seeking approval for the appointment of SBG's four nominees as directors.
The CLB, on August 10, 2010, had rejected Maytas Infra's request for inducting the nominees of Saudi Arabia-based real estate company SBG on its board, saying that as per the board's earlier directive, control of Maytas Infra should remain with IL&FS.
IL&FS had assured CLB that two government nominated directors would make sure that its order is not violated.
The Ministry of Corporate Affairs had also expressed its satisfaction over induction of SBG's nominees.
In a filing to the stock exchanges in June this year, Maytas Infra had announced that SBG would acquire a 20 per cent stake in the company on a preferential basis.
Its shareholders had also approved the proposal at an extraordinary general meeting on July 19.
Following the stake sale, SBG would become a co-promoter of the company.