Faced with massive cash-crunch, Maytas Infra, a company promoted by kin of Satyam [ Get Quote ] founder B Ramalinga Raju, has asked the government not to hastily withdraw projects awarded to it.
According to sources, Maytas Infra has written to the corporate affairs ministry requesting for support from government agencies that have alloted various projects to it.
Maytas Infra chairman K Ramalingam confirmed the development and said, "After Satyam, many clients, including the government departments, who awarded projects to us have become panicky. We have asked the MCA to coordinate with government departments and support us."
He said the company is commercially viable and with a little support, it can manage through choppy water.
Ramalingam added that the company has written to various government departments, who had awarded projects to the firm, and asked them not to panic due to the multi-crore scam at Satyam Computer Services.
Many government projects related to irrigation, oil, power, building, etc in states like Andhra Pradesh, Maharashtra, Jammu and Kashmir have been awarded to the Hyderabad-based company.
After Satyam founder B Ramalinga Raju confessed of committing accounting fraud at the IT firm in January this
year, many companies, including PSUs cancelled contracts awarded to Maytas Infra.
PGCIL had in December accorded the company with rural electrification project worth Rs 222.25 crore (Rs 2.22 billion) under which the company was to execute the order in Khurda and Sundergarh districts of Orissa, and West Midnapore district of West Bengal.
However, after the Satyam debacle, Power Grid Corporation of India Ltd decided to revoke the seven rural
Similarly, the Karnataka government had also said it will cancel two airport projects being executed by Maytas Infra
with Nagarjuna Construction Co Ltd.
London-listed Vedanta Resources Plc had also cancelled a contract with Maytas Infra for building a township for its
staff in Jharsuguda, Orissa.
Ramalingam said the company has already finalised its revival plan and has approved corporate debt restructuring
Court denies interim relief: According to another report, the Bombay high court has denied any interim relief to Maytas Infra in a dispute related to expansion of a stretch of Salem Highway (NH 68).
Maytas had moved the court challenging termination of its contract by Utility Energytech and Engineers last month.
Maytas had also sought a temporary stay to the termination, but Justice Anup Mohta of Bombay high court last week refused to pass any interim order.
National Highway Authority of India awarded contract for highway expansion for a 62-km stretch in Tamil Nadu to Utility Energytech and Engineers in 2007.
Maytas entered into a separate agreement with Utility as a subcontractor.
Last month, Utility sent a termination notice to Maytas. Both parties have alleged breach of agreement.
Maytas also moved the court. But justice Mohta, in the order last week, said that 'once party has taken decision based on commercial wisdom (to terminate contract) court can not compel it to allow other party to continue.'
Since Maytas has also appointed arbiter, it can get relief by way of compensation, judge said.
Unless all the facets of the case are decided, no interim injunction can be granted, he added.