Maytas under scanner

The Satyam scandal has cast an ominous shadow on the Raju family-promoted Maytas Infra and Maytas Properties. Andhra Pradesh Chief Minister Dr Y.S. Rajasekhara Reddy disclosed that an intensive review of the public projects being implemented by Maytas, individually or as part of a consortia, in the state are being studied closely to determine any possible adverse impact including time and cost overruns.

In a mid-day media conference at the state secretariat in Hyderabad on Sunday, Reddy made it abundantly clear that the topmost priority for the state government is the welfare and the future of the 53,000 odd Satyam employees and the impact of the scandal on ongoing and proposed projects in the state as well as the state’s economy.

Reddy admitted that the concern for the state is the capability of the Maytas companies to execute the various irrigation project packages and the ability to take forward the plans to develop major infrastructure projects as the member of different consortia.

There are apprehensions that the contract with the Maytas led consortium will fall through and the Hyderabad Metro Rail will have to look for a fresh partner to take up the Rs 12,132 crore project for the 71 km rail link through the city. This is, if the Maytas-led consortium fails to achieve financial closure for the project by March.Maytas Infra has been awarded other prime contracts such as the Rs 809.62 third package of the Godavari drinking water supply scheme for Hyderabad and the Rs 1500 crore Machilipatnam Deep Water Port.

Further, the chairman of Maytas Infra R.C. Sinha has resigned after Ramalinga Raju came out with his five-page statement. His elder son B. Teja Raju is the vice chairman. Its CEO P.K. Madhav is already under a cloud having come out on bail in a case of cheating depositors of an unrelated company of which he was director earlier.

Maytas Infra, like Satyam, is suspected to have misrepresented its financials. This is why the chief minister has asked Chief Secretary P. Ramakantha Reddy to immediately evaluate the risks for successful and timely completion of projects under execution by Maytas.

However, it is the privately held Maytas Properties, of which younger son Rama Raju is vice chairman, which is perhaps a richer company than Maytas Infra as it has one of the largest land banks for any company in the country – more than 7,000 acres spread across cities and towns in southern India. But, with the probes into Satyam, being extended to other companies in the Raju empire, the real story as to how these companies, formed by reversing the letters, have gained is likely to surface.