CG Power stock crashes 20% after probe reveals fraudulent transactions

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Adverse Media, Forensic Audits

 

 An internal probe initiated at CG Power and Industrial Solutions (CG Power), a company promoted by Gautam Thapar’s Avantha group, has unearthed multiple fraudulent related-party transactions, the company informed the exchanges. CG Power said it would start a detailed forensic investigation into the matter. The company’s stock crashed close to 20 per cent to Rs 14.80 soon after the revelations. At a 12-hour-long board meeting, which started on Monday afternoon and ended in the early hours of Tuesday morning, members of the company’s board discussed a risk and audit committee (RAC) report, which listed various irregularities. These included understated liabilities and advances at both the company and the group level. The report also said the net worth of the company had also been understated owing to unauthorised write-offs.In Inaddition, the report flagged  dubious transactions carried out by various means such as inappropriate netting off, using alleged unrelated third parties, routing transactions through subsidiaries, promoter-affiliated companies, and other connected parties.