CLB unlikely to allow Maytas board replacement

27 February 2009

The Company Law Board today reserved its orders on the government's petition for superseding the board of Ramalinga Raju-family promoted Maytas Infra, while suggesting that four independent directors be inducted.

However, the government is unlikely to have its way in replacing the entire Maytas board, as the CLB had yesterday said it was against replacing the board as it saw it no evidence of mismanagement.

The CLB also did not entertain a list of 12 probable directors submitted by Maytas, where Ramalinga Raju's sons B Teja Raju serves as vice chairman.

It favoured selecting a chairman from among the four independent directors to be taken on board.

Lenders IDBI Bank, ICICI Bank and IL&FS on Friday said it welcomed the suggestion for inducting independent directors, while saying they do not want their own representatives for the role. The CLB had suggested the new independent directors be representatives of lenders IDBI and ICICI.

The CLB also said that it would not allow infrastructure development and finance company IL&FS, which owns a 37 per cent stake in Maytas Infra, to get a seat on the board because it is a competitor.