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Maytas is Satyam spelt backwards. The promoters intentionally named their infrastructure and real estate firms that way. Of course, they had no inkling that some day the companies would face big setbacks on account of their association with Satyam.
Satyam's downfall started with the aborted bid to acquire Maytas Infra and Maytas Properties. The scam took a heavy toll on the fortunes of the two firms. And, like in the case of Satyam, the Rajus lost hold of the two companies they had promoted. They were replaced by IL&FS.
Maytas Infra was incorporated on May 6, 1988, as Satyam Constructions Private Limited, by Ramalinga Raju, his brothers Rama Raju and Suryanarayana Raju, and one A Jitentdra Nath. It was renamed Maytas Infra in July 1998. It raised Rs 327.45 crore through an initial public offering in February 2007 by selling shares with a face value of Rs 10 at a premium of Rs 360. Ramalinga Raju's son Teja Raju was vice-chairman of the company.
Maytas Properties was incorporated on May 13, 2005, as Maytas Hill County Limited, by Ramalinga Raju's younger son Rama Raju, Jr and Suryanarayana Raju. Its nomenclature changed to Maytas Properties in December 2007.
Till 2009, Maytas Infra, individually and through joint venture partners, had won orders worth over Rs 30,000 crore across roads, ports, irrigation and rail projects, including the Rs 12,132-crore Hyderabad Metro Rail and the Rs 1,650-crore deep water port at Machilipatnam.
Since 2004, the Andhra Pradesh government had awarded irrigation projects worth Rs 14,000 crore to Maytas and had paid Rs 1,800 crore for the works executed up to 2008.
However, in the wake of Satyam fiasco, every government department embarked on a risk assessment exercise. Thereafter, it lost several orders.
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Maytas Infra failed to achieve financial closure for the metro rail project. The project was awarded to the company in September 2008. According to the bid agreement, it had to be grounded within six months from the date of award. The company paid Rs 11 crore to the government at the time of agreement. It was to pay Rs 50 crore on financial closure and furnish Rs 240 crore bank guarantee as performance security by March 17, 2009.
Maytas sought and was granted a three-month extension to achieve financial closure. Following this, the state government cancelled the contract awarded to the Maytas Infra-led consortium. After fresh bidding, the contract was awarded to Larsen & Toubro, which is executing the prestigious project.
Meanwhile, between March and April 2009, the government appointed its nominees to the Maytas Infra board, former ICAI president Ved Jain, corporate lawyer OP Vaish, former Airports Authority of India chairman K Ramalingam, and past president of Assocham Anil K Agarwal. Ved Jain was also appointed to the Maytas Properties board.
On August 29, 2009, Maytas Infra reported a net loss of Rs 473.55 crore for the year 2008-09 as against a net profit of Rs 90.74 crore in the previous year. On August 31, 2009, IL&FS replaced the Raju family as promoters of the company.
On the other hand, Maytas Properties was unable to complete its Rs 1,000-crore Hill County project planned to construct 840 apartments and 326 independent bungalows priced between Rs 50 lakh and Rs 2.5 crore. When the construction stopped in January 2009, less than 50 units were completed and only 30 per cent of the work was executed on other units.
The company till then collected Rs 630 crore by way of payments from the buyers and required another Rs 200 crore for the project to be completed. But it could not raise the money. Prevailing recessionary conditions added to the damage.
In January 2011, the Company Law Board allowed IL&FS, which was ready to pump in Rs 150 crore, to take over Maytas Properties. In August 2013, IL&FS renamed the company Hill County Properties Limited.
"I understand that many of our stakeholders had misgivings about the Maytas name and I am happy that many of their apprehensions will now be allayed given a new name and renewed focus," the government nominee on the company's board, Ved Jain, said after a fresh certification of incorporation registering the change of name was issued by the Registrar of Companies.
