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E&Y overvalued Maytas Properties: Govt
February 25, 2009 15:56 IST
Accusing Ernst & Young of over-valuing Maytas Properties, the government on Wednesday told the Company Law Board that the global consulting firm valued the company run by kin of disgraced Satyam [Get Quote] promoter B Ramalinga Raju at Rs 6,523 crore (Rs 65.23 billion) against its turnover of mere Rs 22 crore (Rs 220 million).
"How hollow this valuation is. . . As per our knowledge, the company does not have any land bank and this company, having a turnover of mere Rs 22 crore (Rs 220 million), was valued at Rs 6,523 crore," the deputy director appearing for the government told the CLB during a hearing in the Maytas Properties case.
The arguments were made by the government before the CLB, which is considering a petition by the government for removal of the board of Maytas Properties. The CLB is likely to pass the order later.
The government also alleged that the valuation of Maytas Properties by the consultancy firm was done in a day.
When during the proceedings CLB chairman S Balasubramanian asked, "Whether this entire valuation was done in a week, the government replied, "No, the valuation was done in a day only".
However, E&Y denied the charge that it has done the aluation in just one day, saying the firm has 'taken considerably more time, which we believe was adequate and also have significant evidence to the effect".
Mauritus firm demands Rs 806 crore: Mauritius-based investment firm SRS Orion Investment has demanded Rs 806 crore (Rs 8.06 billion) from the troubled Maytas Properties.
SRS Orion, which has reportedly invested Rs 600 crore (Rs 6 billion) in Maytas Properties, has already issued a public notice demanding Rs 806 crore by March 19, 2009, the former said in the petition filed before the Company Law Board.
The company, which had invested huge funds in Maytas Properties, has urged the CLB that it should be made a party in the case relating to replacing the board of Maytas Properties with government nominees.
The investment firm in its petition has also sought converting its Compulsory Convertible Debentures held in Maytas Properties into shares and to appoint directors on the board of the real estate company.
The investment firm further alleged in its petition that despite having substantial investment in Maytas Properties, the latter's directors kept it in dark over the decision of Ramalinga Raju about taking over Maytas Properties.
"On December 16, 2008, the applicant was shocked to learn that without their approval, Ramalinga Raju made a public announcement that Satyam plans to acquire 100 per cent share," it said, adding it was a breach of the investment agreement with Maytas Properties.