Maloo has resigned from the board of the telecom equipment company and its subsidiary company HFCL Infotel Ltd.
The announcement comes close on the heels of income tax raids on HFCL, Vinay Maloo and UFLEX Ltd managing director Ashok Chaturvedi. Maloo had also been in the news for his alleged links with controversial stockbroker Ketan Parekh.
In a press statement, Mahendra Nahata, who is also the managing director of HFCL, said "after his disassociation with HFCL, neither HFCL nor any of the directors have any association with Maloo. Linking Maloo's name with HFCL or with any of its group firm is not correct".
The resignation was accepted by the board of HFCL on October 31, 2006. With this, Maloo, who was one of the original promoters of the company with Nahata, has broken away from HFCL group. He, however, retains a minority equity stake in the company, but has no role in its management. Nahata, who is the group chairman, runs the entire operations of the group now.
Sources said the split occured at the instance of Nahata. Differences between the two promoters were on for some years now, especially over Maloo's investment strategies and associates.
HFCL, which was part of the infamous K-10 stocks, had run into severe problems after the scam broke. Hindered by cash flow issues, the company stocks hit rock bottom. The company had struck a partnerhsip with Kerry Packer in early 2000, which saw the Australian business mogul pick up 10 per cent of HFCL's expanded equity base for a whopping $238 million.
The initiative aimed at building new businesses - software services, including animation software, software product development, IT-enabled services and embedded systems. However, with the market meltdown after the Ketan Parekh scam, the stock fell Packer wrote off his Indian investment.
With factories at Solan in Himachal Pradesh and Goa, HFCL manufactures a range of telelcom equipment for Indian operators both in the mobile as well as fixed line space. It also has tie-ups with Chinese companies to supply equipment in the country. The group also runs a fixed line operation in Punjab.
