Faced with a massive cash-crunch, Maytas Infra, a company promoted by the kin of Satyam founder B Ramalinga Raju, has asked the government not to hastily withdraw projects awarded to it.
According to sources, Maytas Infra has written to the Corporate Affairs Ministry requesting for support from government agencies that have allotted various projects to it.
When contacted, Maytas Infra Chairman K Ramalingam confirmed the development and said, "After Satyam (fraud), many clients, including the government departments which awarded projects to us, have become panicky. We have asked the MCA to co-ordinate with government departments and support us."
He said the company was commercially viable and, with a little support, it could manage through the troubled times.
Ramalingam added that the company had written to various government departments which had awarded projects to the firm and asked them not to panic due to the multi-crore scam at Satyam.
Many government projects related to irrigation, oil, power, building, etc in the states like Andhra Pradesh, Maharashtra and Jammu & Kashmir were awarded to the Hyderabad-based company.
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After Satyam Computer founder B Ramalinga Raju confessed to committing an accounting fraud at the IT firm in January this year, many companies, including PSUs, cancelled contracts awarded to Maytas Infra.
The Power Grid Corporation of India Ltd (PGCIL) had, in December last year, given the company a rural electrification project worth Rs 222.25 crore under which the company was to execute the order in Khurda and Sundergarh districts of Orissa and West Midnapore district of West Bengal.
However, after the Satyam debacle, PGCIL decided to revoke the seven rural electrification contracts.
Similarly, the Karnataka government had also said it will cancel two airport projects being executed by Maytas Infra with Nagarjuna Construction Co Ltd.
London-listed Vedanta Resources Plc had also cancelled a contract with Maytas Infra for building a township for its staff in Jharsuguda, Orissa.
HC denies relief
The Bombay High Court has denied any interim relief to Maytas Infra, the company promoted by Ramalinga Raju’s son, in a dispute related to expansion of a stretch of the Salem Highway (NH 68).
Maytas had moved the court, challenging termination of its contract by Utility Energytech and Engineers, last month. The company had also sought a temporary stay of the termination, but Justice Anup Mohta of the Bombay High Court refused to pass any interim order last week.
The National Highway Authority of India awarded a contract for highway expansion for a 62-km stretch in Tamil Nadu to Utility Energytech and Engineers in 2007. Maytas entered into a separate agreement with Utility as a subcontractor.