SC asks HC to hear Maytas investment firms' plea afresh

New Delhi: The Supreme Court today directed the Andhra Pradesh High Court to hear afresh the plea of investment firms SRS Orion and JM Financial, who are fighting against the government move to hand over the management of scam-hit Maytas Properties to IL&FS. A three-judge bench, headed by Chief Justice S H Kapadia, set aside the High Court order – which over-ruled a CLB directive that allowed the two firms to amend their petitions. [caption id=“attachment_52030” align=“alignleft” width=“380” caption=“Supreme Court of India. Reuters”]  [/caption] SRS Orion and JM Financial, then, moved the Supreme Court challenging the high court order. The apex court has directed the high court to decide afresh on the pleas within six weeks. It has also asked the High Court to hear all the three petitions—involving IL&FS, Mauritius-based Orion and Nimesh Kampani’s JM Financial—together. “The difficulty in this matter is that the High Court has not heard all the appeals in this matter together,” said the apex court while setting aside the High Court order. On 9 May, the Supreme Court had directed the government to file a reply over the pleas challenging its decision to take over the management of Maytas from the family of Satyam founder B Ramalinga Raju and handing it over IL&FS. In January 2009, Raju confessed to fabricating accounts of Satyam. He had also announced plans to invest in Maytas. The high court had stayed the Company Law Board (CLB) order allowing the investment firms to amend their plea before it. CLB had allowed the two investment firms to be party to the suit. CLB had earlier also passed the orders of handing over the management from the Raju family to IL&FS. IL&FS and Maytas challenged in the High Court the CLB order to allow the investment firms to amend the pleas and got a stay on the board’s directive. Following this, the investment firms, which had put inaround Rs 600 crores moved apex court. The investment firms also stated that CLB had passed the order to transfer the management without even hearing them. The financial institutions in a plea before CLB, had sought conversion of its Compulsory Convertible Debentures (CCD) held in MPL into shares, and appointment of directors on the board of the real estate company. The investment firms had submitted before CLB that they had invested Rs 600 crore in the troubled real estate firm. They had also questioned Maytas’ revival plan, in which 80 per cent shares were transferred to IL&FS for just Rs 20 lakh. Under the revival plan, the government controlled board of MPL transferred the shares to IL&FS. SRS Orion said it had invested Rs 520 crore in Maytas Properties and claimed that the market value of the investment has gone up to about Rs 1,000 crore — a sharp contrast to the IL&FS’ paying just Rs 20 lakh for the stake. PTI