WHEN the disgraced founder of Satyam, B. Ramalinga Raju, named his two other pet projects as Maytas Infra and Maytas Properties, the parent company spelt in reverse, little would he have imagined that their fortunes too would go topsy-turvy.
It is believed that Raju diverted Satyam funds to the companies headed by his sons, B. Teja Raju (Maytas Infra) and B. Rama Raju Jr (Maytas Properties), to buy large tracts of land and win projects. He had chalked out a game plan to acquire the companies and in the process also reduce the alarming gap in Satyams accounts, between actual profit and the figure stated in the books, and keep the wealth within the family.
Much like Satyam, Raju nurtured the two companies well and had ambitious plans for them, using his clout with the Andhra Pradesh government, which bent over backwards to patronise Maytas. During the past three years, Maytas Infra bagged projects worth Rs.30,074 crore on its own or in joint ventures and became the fastest growing infrastructure company in the State. The projects covered areas such as irrigation, railways, roads and ports.
The superfast growth of the company, which recorded a turnover of Rs.1,600 crore in 2008 as against Rs.100 crore in 2003; the speed and ease with which it got projects, and the questionable role played by the top political leadership, are all under the scanner now.
Maytas Properties, too, grew phenomenally, buying up huge chunks of land for its real estate projects around Hyderabad, Visakhapatnam and other major cities and towns in the State.
As investigators interrogate Raju and thumb through documents to try to understand the extent of the fraud, one aspect that has caught everybodys attention is his hunger for land. After he landed in Hyderabad in the late 1970s, he developed a penchant for buying land and it was there until he shifted gear to information technology (IT) and then to real estate.
It remains a mystery how Raju managed to acquire 6,800 acres of land, with preliminary reports suggesting benami (assumed names) purchases or the floating of a number of companies to circumvent laws. On paper, it does not go beyond 1,000 acres, including IT special economic zones and fancy villa and apartment projects around Hyderabad.
The Andhra Pradesh government is examining his land-buying spree and whether he transgressed the law that bars individuals from owning over and above 1,000 square metres of land in cities, and 54 acres of dry and 25 acres of wet agriculture lands. More importantly, revenue officials are looking at reports that he had bought up large chunks of lands originally assigned by the government to the Scheduled Castes and Scheduled Tribes, some in connivance with a local Congress leader in Ranga Reddy district neighbouring Hyderabad.
On the other hand, the Central government widened the scope of the inquiry by the Registrar of Companies, the Securities and Exchange Board of India and the Serious Fraud Investigation Office to include seven subsidiaries of Satyam, including these two companies. Another angle that is being probed is money laundering, to see if funds have come from Mauritius, a tax haven.
The Opposition parties in the State the Telugu Desam Party, the Telangana Rashtra Samithi, the Communist Party of India (Marxist) and the Communist Party of India, now on the verge of forming a grand alliance to take on the ruling Congress have shifted their focus from Satyam to the Maytas twins.
State CPI(M) secretary B.V. Raghavulu and his CPI counterpart K. Narayana argue that but for the special treatment given to Maytas Infra, it would not have been possible for it to win so many projects. Telugu Desam Party president N. Chandrababu Naidu, too, alleged that a lot of public money had changed hands in the Maytas deals. His party spokesman, M.V. Mysoora Reddy, explained how the tenders were cast in a manner that suited Maytas and made it difficult for the competitors.
What has raised the stink is the way the State government dithered on the issue, creating an impression that it had a lot to hide. But for a review of all projects allotted to Maytas Infra, it did nothing to remove the doubts about the way it got so many projects and whether it had the capacity to raise resources and complete them.
Chief Minister Y.S. Rajasekhara Reddy and Finance Minister K. Rosaiah reacted belatedly and defended the projects allotted to Maytas Infra, saying that transparency had been maintained. Ruling out cancellation, Rosaiah went to the extent of saying that the government may have to end up paying huge penalties. He rejected the Opposition parties demand for showing the files relating to the projects to them, questioning their capacity to peruse them. The Opposition parties alleged that the government was shielding Maytas Infra because of the nexus between it and some ruling party leaders.
The firm, in partnership with others, had won a series of projects in a span of six months ending December 2008. These include the Hyderabad Metro Rail (Rs.12,000 crore), the deep water port at Machilipatnam (Rs.1,590 crore), the scheme to supply drinking water from the Godavari to Hyderabad (Rs.3,800 crore) and some packages of the Rs.38,000-crore Pranahita-Chevella irrigation project.
The Hyderabad Metro Rail had raised a storm when metro rail expert E. Sreedharan found fault with the way the Maytas Infra-led consortium was allotted 269 acres of prime government land in Hyderabad for commercial exploitation and allowed to take the rail route to some of its own real estate projects. The government reacted by threatening him with a defamation suit. Since then the government has conceded that the project has little chance of taking off and is thinking of calling fresh bids.K. Venkateshwarlu