Raju’s family firms deny receiving funds from Satyam

HYDERABAD - Maytas Infra and Maytas Properties, promoted by the sons of disgraced founder and former chairman of Satyam Computer Services B. Ramalinga Raju, Tuesday denied that they received any funds from the fraud-hit IT bellwether.

The two companies, in separate statements released here in the evening, denied that there was any nexus between the Satyam and the two firms.

The denial came a day after the central government extended the ambit of probe into Satyam fraud to Maytas Infra and Maytas Proprties, promoted by the sons of Raju, who quit Jan 7 while admitting a Rs.70-billion (Rs.7,000 crore/$1.43 billion) accounting fraud in the IT company.

Minister for Corporate Affairs Prem Chand Gupta Monday said there appeared to be an apparent nexus between Satyam and the two companies, and announced that the Serious Fraud Investigation Office (SFIO) would also probe Maytas Infra and Maytas Proprties.

‘Recent media reports have stated an apparent nexus between Satyam, Maytas Infra Ltd. and others. Maytas Infra categorically states that there has been no receipt or utilization of any funds belonging to Satyam, by diversion or otherwise,’ said a statement by Maytas here.

‘We strongly refute this incorrect allegation against the company. Maytas Infra is in the business of implementing infrastructure projects, and is not in the business of real estate and property development.’

The company also stated that it was fully co-operating with the investigations of the government agencies and the management was confident the investigations will give a clean chit to Maytas Infra.

Maytas Properties Limited (MPL), in a separate statement, termed as ‘untrue’ and ‘incorrect’ the media reports that the properties in which MPL has interest have been acquired out of the funds belonging to or diverted from Satyam.

‘There has been no receipt or utilisation of any funds belonging to Satyam, by diversion or otherwise, for the acquisition of the rights by MPL in the said lands or for any other purposes of the company.’

MPL also denied the allegations that it has been allotted land by the government.

‘MPL has never been the beneficiary of any allotment of land by the government except for lands acquired by MPL through public auctions conducted by the government and its agencies and MPL has also paid the entire consideration amounts for acquisition of its rights.’

MPL said it was fully co-operating with the various agencies in the investigations.

Maytas Infra and MPL are run by B. Teja Raju and B. Rama Raju junior, the two sons of Ramalinga Raju.

The aborted bid to acquire the two firms for $1.6 billion (Rs 79.2 billion/Rs 7,920 crore) by the fraud-tainted Satyam led to unprecedented crisis in the global software major, resulting in a spate of resignations by four directors and Raju subsequently.

The Andhra Pradesh government had awarded a number of infrastructure projects in the state to the tune of Rs. 380 billion (Rs.38,000 crore) to Maytas. The projects include the prestigious Hyderabad Metro Rail and the Machhilipatnam deep water port in the coastal region.

Maytas, a reverse spelling of Satyam, is also executing several packages in major irrigation projects worth Rs.14 billion (Rs.1,400 crore). The infrastructure company is also building three IT Special Economic Zones (SEZs) and integrated townships in Hyderabad.