Corporate fraud hits CG Power, shares tank 20% on BSE
New Delhi, Aug 20 (IANS) Hit by major corporate governance issues involving unauthorised transactions and understatement of liabilities, Gautam Thapar-led CG Power's shares plunged nearly 20 per cent on the BSE on Tuesday during the early trade.
The corporate fraud which went unnoticed for almost three years has raised questions over regulatory oversight.
The company has disclosed the findings of its risk and audit committee (RAC), which revealed that the firm and the group together could have under-reported liabilities to the extent of over Rs 3,600 crore in FY17 and FY18.
They also understated the loans advanced to related and unrelated parties to the tune of about Rs 7,600 crore during the two financial years.
"Recoverability of such amounts along with any interest and other related amounts, from related and other unrelated parties, will be evaluated with appropriate legal inputs, after which necessary actions will be instituted," the company said in a regulatory filing to the BSE.
The company stock plunged 19.84 per cent to Rs 14.75 on the BSE on Tuesday at 12.25 p.m.
In its filing, the company assured its stakeholders that it was committed to restoring the highest level of governance and internal control within the company and work towards ensuring that the interest of all the stakeholders is protected.
The company's internal investigation found its certain assets were purportedly provided as collateral without due authority and it was made a co-borrower and/or guarantor for enabling third parties to secure loans. The money was then immediately routed out from the company.
"Measures to safeguard such assets will be evaluated with appropriate legal assistance and action initiated," CG Power said.