Hill County customers see this as ‘Sankranti gift’
IL&FS, which will take over the management of troubled Maytas Properties Limited, will pursue options to recover about Rs 220 crore that went out from the latter to Satyam Computer Services Limited.
According to information, customers have so far paid about Rs 600 crore towards the purchase of properties at Hill Country, the premium residential project of Maytas Properties. Of this, Rs 220 crore was reportedly diverted to Satyam to pay employee salaries. Incidentally, the project work has been stalled for want of Rs 290 crore. The company has receivables of about Rs 60 crore.
“We have factored in the money that went to Satyam. We will pursue methods for recovery,” an IL&FS officials told Business Standard. He said the management at Maytas Properties would change shortly. For the customers, IL&FS would work to complete the project at the earliest and stick to the 18-month window period set by the Company Law Board (CLB).
The order of the CLB allowing IL&FS to take over Maytas Properties, a company run by Satyam founder Ramalinga Raju’s younger son B Rama Raju (Jr), has brought cheers to the people who have purchased properties at Hill County. IL&FS had earlier taken over Maytas Infra, also promoted by B Ramalinga Raju’s family.
“The development is good. At last, there is hope that our villas or flats will be ready,” said BV Rama Raju, who booked an independent house costing Rs 1.5 crore. He has been paying an EMI of Rs 60,000 per month for over three years now. According to him, the interest component itself is more than Rs 15 lakh. “I cannot claim any tax rebate on the house loan as the property is not in my possession.”
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IL&FS management had earlier contacted the property owners to know their requirements. The customers told that they had lost faith in the management of Maytas Properties and unilaterally favoured a take over.
The Rs 1,100-crore venture coming up on the outskirts was to be delivered between June and September 2008. It envisaged to build 800 apartments priced between Rs 40 lakh and Rs 2.5 crore each. However, the apartments are not yet ready. The project also planned 320 villas of which only about 50 are complete. Even for these, the occupants are reportedly not happy with the amenities. Some have even set up reverse osmosis units on their own.
EMI Pressure
The property owners had approached various agencies requesting a speedy action on the issue. Many of them have buckled under the EMI pressure paying between Rs 50,000 and Rs 1.5 lakh a month. Some of them have even stopped paying the installments.
Another customer said the role of banks should also be probed. “They have extended 100 per cent loans to the customers even though they were not constructed,” he said.
“We were frustrated. Our monies were locked in the project. We could not move out of it or take possession. At least a year and a half from now, we will have our properties,” said another customer Anil Katakam.
“It’s a Sankranti gift for us,” said Shivaram Prasad, Actis Pharma managing director, who booked a flat at Hill County.
Construction works at the project were stalled after Ramalinga Raju confessed to financial irregularities at Satyam Computer two years ago. Since then, Maytas Properties customers have tried various means in vain, including staging protests at the residence of Raju, to get the management complete the project. The company had tried to rope in a strategic partner and bring in an investor, among various options. Plans for fund infusion by IDBI and Axis Bank, and debt restructuring by a consortium of banks remained only on paper.
The company even asked the property buyers to use their good offices to find an investor. It also tried the credit notes route — customers were asked to pay over and above the value of the property and the same was to be used to finish the pending works. Upon completion, the company said it would return the amount once the cash position improved.
Maytas Properties had earlier served notices to Mahindra Satyam, the new brand identity of Satyam Computer, but nothing happened. Customers of Hill County had also expressed their concern at the Pravasi Bharatiya Divas last year.