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The triumphs and tribulations of CLB in 2009

By Kumar Rahul in New Delhi
December 30, 2009 18:06 IST

For the Company Law Board, 2009 was a case of fence eating the crop, as the quasi-judicial body that was looking into the affairs of fraud-hit Satyam Computer saw its acting Chairman accused of graft.

The board, which had described Satyam as a "weeping orphan", successfully handed it over to foster parents - Tech Mahindra.

Sadly, for the CLB, all the good deeds and respect it earned in the Satyam case came undone when its acting Chairman R S Vasudevan was caught by the CBI for allegedly accepting a bribe of Rs 7 lakh from a firm to give a favourable order.

Later, CBI searched Vasudevan's residence and recovered, besides the bribe amount, Rs 55 lakh in cash. Interestingly, when the probe in accounts fudging in Satyam (now Mahindra Satyam) was on, Vasudevan was Director, Investigation in the Ministry of Company Affairs and was associated with initial probe in Satyam's affair.

Besides the Vasudevan graft case, the CLB was also dragged to the Delhi High Court over the appointment of one of its members, Vimla Yadav, over eligibility criteria.

The year saw S Balasubramanian, the CLB's long-serving chairman, retire after 18 years of service in the board. He was succeeded by Justice D R Deshmukh.

In terms of handling corporate cases, CLB began the year on a positive note with the Bajaj brothers -- Rahul and Shishir -- agreeing to withdraw their 5-year-old case and agreeing to part ways and divide their auto-to-sugar empire.

Perhaps the biggest challenge for the CLB during the year was handling the Satyam case, with the government rushing to takeover the management of the IT firm when the company's founding chairman B Ramalinga Raju admitted fudging of company accounts to the tune of Rs 7,800 crore (Rs 78 billion).

Acting swiftly, the then CLB Chairman dismissed Satyam's board, replacing the members with government nominees to run the firm. Subsequently, the CLB allowed a strategic investor to take over Satyam, following which Tech Mahindra's bid of Rs 58 per share was approved.

The board, however, did not agree with a similar plea from the government to take over the management of Satyam's sister concerns - Maytas Infra and Maytas Property - both promoted by Raju's family members. Instead, it authorised the government to appoint four person on Maytas Infra board and three on Maytas Properties board.

Maytas Infra was very crucial as it was handling many crucial projects at that time which included Rs 12,000-crore (Rs 120 billion) Hyderabad Metro Project. Later, the CLB allowed infrastructure major IL&FS to replace the promoters in the company after raising their stake to 37 per cent in the company. IL&FS already had 14.5 per cent shares of the Maytas Infra pledged with it.

Apart from Satyam, during the year the CLB also saw the end of many long drawn cases, including that between Punjab Tractors and Japanese firm Sumitomo Corporation over Swaraj Mazda and Jaiswal brother agreeing to part ways from liquor maker, Jagatjit Industries.

On the other hand, Singhal brothers of Bhushan Industries - Neeraj and Sanjay - continued their fight over control of various group companies. They also even fought proxy war over the take-over of Orissa Sponge.

The board also witnessed Japan's Daiichi Sankyo, which acquired Ranbaxy, starting fresh round of battle against Hyderabad-based Zenotech Laboratories over appointment of directors in the company.

Kumar Rahul in New Delhi
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