MUMBAI: After a marathon board meeting that stretched from 3 pm on Monday to 4 am on Tuesday, CG Power informed stock exchanges at 4.10 am about unauthorised transactions and potential misrepresentation of financial statements unearthed by the independent legal firm. CG Power shares crashed by close to 20 per cent to Rs 14.80 post this. It also took down Yes Bank shares by 7 per cent due to its 13 per cent stake in it.
The unauthorised transactions prima facie are prejudicial to the interests of the company, and purportedly carried out by past and current employees including certain non-executive directors and others, the company said.
“These transactions appear to have been carried out by various means including inappropriate netting off, using ostensibly unrelated third parties, routing transactions through subsidiaries, promoter affiliate companies and other connected parties. These may have potentially resulted in misstatement of past financial statements, the Gautam Thapar group company said.
These appear fraudulent and warrant further investigations, the company said and suggested forensic investigation as the next course of action apart from legal recourse. “The financial results of the previous quarters for the years ended March 2019, 2018 and 2017 could be impacted as a consequence of these adjustments,” it said.
The total liabilities of the company and the group may have been potentially understated by Rs 1,053.54 crore and Rs 1,608.17 respectively as on the end of March 2018 and by Rs 601.83 crore and Rs 401.83 crore for FY17 as a result of the unauthorised transactions it said.
The advances to related and unrelated parties may also have been understated to the tune of Rs 1,990.36 crore and Rs 2,806.63 crore respectively as on March 2018; and by Rs 1,479.34 crore and Rs 1,331.47 crore respectively as at April 1, 2017.