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Ernst & Young likely to snap ties with Maytas
By siliconindia
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Thursday, 15 January 2009, 23:20 IST
Hyderabad: Ernst & Young (E&Y) may snap ties with Maytas Properties and Maytas Infra, the two firms run by sons of B Ramalinga Raju, the disgraced founder of Satyam Computer Services. E&Y audits the accounts of both the firms and is reviewing its continuance with them.
"E&Y is reviewing the process of acceptance and continuance with Maytas Infra and Maytas Properties due to the enormity of the Satyam scam," a spokesperson for E&Y told the Economic Times. E&Y does not audit the subsidiaries of Maytas Properties. It is also not the internal auditor for Satyam.
Satyam had planned to buy these two firms for $1.6 billion, but the deal was aborted after a major shareholder rebellion, late last year. E&Y's re-assessment of its relationship with its client is in sync with international auditing norms. Normally, the Board (of any company) has to recommend the auditors' appointment at the time of finalization of accounts.
The auditors give their concurrence if they want to come on board or continue with the contract. Shareholders at the company's annual general meeting then ratify the appointment. Given the reputation risks involved E&Y is reassessing its relationship with these two firms, the person quoted earlier said.
Raju's younger son Rama Raju runs Maytas Properties, while his elder son Teja Raju runs Maytas Infra.
Currently, Maytas Properties is engaged in four real estate development projects. These include a 75-acre IT SEZ project � Maytas Hill County near Hyderabad. It is also one of the partners in the Jubilee Hills Landmark Projects Private (JHLPL). Maytas along with ICICI Venture and Nagarjuna Construction Company had bought over five acres of land at Rs 336 crore from the Hyderabad Urban Development Authority (HUDA) in February 2006 for this project.
Some of the key projects handled by Maytas Infra include the 
12,132-crore Hyderabad metro rail project, the Machilipatnam port project and a host of irrigation, power and road projects. The Registrar of Companies is also looking at all the transactions linked to the aborted acquisition.
12,132-crore Hyderabad metro rail project, the Machilipatnam port project and a host of irrigation, power and road projects. The Registrar of Companies is also looking at all the transactions linked to the aborted acquisition.