Maytas Infra today assured the Company Law Board (CLB) that the management control of the firm will remain with IL&FS, notwithstanding the induction of four nominees of Saudi Bin Ladin Group (SBG) on the board.
Maytas Infra today furnished an undertaking by Saudi Bin Ladin Group before the CLB to this effect.
"Notwithstanding anything contained in shareholder's agreement, the control of management of Maytas Infra will continue to remain with IL&FS," the Saudi Bin Ladin Group (SBG) submitted in its affidavit.
CLB has reserved its order on the issue.
On being asked by CLB Chairman Justice D R Deshmukh whether they are satisfied with the appointment of SBG directors on Maytas Infra board, officials of the Ministry of Corporate Affairs said they had no objection to the move.
However, Deshmukh raised the point with Maytas counsels: "Despite the affidavit, the control of management will go to SBG, if its four directors are appointed on board."
Senior advocate Virender Ganda, appearing for IL&FS, submitted that there was an agreement to effect that both IL&FS and SBG would have same number of directors.
"Though there would be equal number of directors of both firm, the two directors of government will make sure that order of CLB would not be contravened," he further submitted.
The CLB had, on October 18, asked Maytas Infra to furnish an undertaking by SBG within a week that management control will not be transferred to the latter after induction of its four nominees on the board.
IL&FS-owned Maytas Infra approached the CLB on October 13 for the second time in three months, seeking approval for the appointment of SBG's four nominees as directors.
Last year, IL&FS took over cash-strapped Maytas Infra, once promoted by the kin of disgraced Satyam founder B Ramalinga Raju, following a CLB order. As per the takeover rules, the company has to seek CLB approval before making any changes in management control before September-October, 2011.
Earlier, CLB had rejected Maytas Infra's request for inducting the nominees of Saudi Arabia-based real estate company SBG on its board.
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.
Shareholders of Maytas Infra 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.
