The Company Law Board (CLB) has rejected induction of four directors of Gulf-based real estate company Saudi Bin Ladin Group (SBG) on the board of IL&FS-promoted Maytas Infra.
In a statement issued today, IL&FS-promoted Maytas Infra (MIL) said, "With the consent of government of India, the company had applied to the CLB requesting for its approval to appoint nominees of the SBG as directors of MIL... The CLB has not acceded to the foregoing request."
The company, once promoted by the kin of disgraced Satyam founder B Ramalinga Raju, further said it had consulted all agencies concerned, including the government, before deciding to sell 20 per cent stake to SBG.
"It is hereby clarified that the company negotiated induction of SBG as its shareholder after due consultations with concerned agencies, including the government of India."
"The company sought and received all requisite approvals for the induction of the SBG as a shareholder, including approvals from its existing shareholders in general meeting for SBG induction through a preferential issue, and attendant approvals from the stock exchanges and Sebi," Maytas said.
IL&FS, which took over cash-strapped Maytas Infra following a CLB order in August last year, was required to approach the board as the sale was allowed on the condition that the promoter group will not lower its stake below 26 per cent or change management control before September-October 2011.
Maytas, further said the induction of four directors was thought necessary as SBG, apart from providing a FDI of Rs 301 crore, has also entered into an explicit understanding with the company to provide infrastructure orders worth $1.50 billion over the next three years.
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"IL&FS remains in management control of MIL with more than 26 per cent of the equity shareholding of the company as per the orders of the CLB dated August 31, 2009. All other conditions of the CLB order have been complied with by the company. MIL has also given an undertaking before the CLB and the MCA (Ministry of Corporate Affairs) in this regard," it said.
In a filing to the exchanges in June this year, Maytas Infra had announced that Saudi Arabia-based SBG will stake on a preferential basis. Besides, the shareholders of Maytas had also approved the proposal in an extraordinary general meeting on July 19. Following the stake sale SBG would become a co-promoter of the company.
Maytas Infra, was in the eye of a storm after a failed bid by Satyam Computer to acquire the company in December 2008. Maytas subsequently suffered a severe cash-crunch.