Probe required on all stakeholders in CG Power case: InGovern

New Delhi, Feb 14 : SEBI along with other regulators should investigate all stakeholders of CG Power and Industrial Solutions, including its lenders, statutory auditors and independent directors in the alleged fraud involving its former top bosses, according to corporate governance analysis firm InGovern.

In its latest report, InGovern has said that the incident led to a huge loss of value for minority shareholders.

"All elements of corporate governance seem to have failed minority shareholders -- key management personnel, independent directors, statutory auditors, internal auditors, banks, NBFC lenders, whistleblowers, etc," it said.

"SEBI and other regulators need to investigate this matter holistically on the role played by all stakeholders. Regulators need to investigate whether a battle for corporate control has played out in this manner."

According to the report, banks and NBFCs seem to have been fully cognizant of the situation in the company and other group companies and yet continued to fund and increase group company exposures against guarantees of the listed company.

It further said that the analysis of the issues at CG Power revealed that a battle for the boardroom and battle for corporate control has led to value destruction for minority shareholders of the company.

The company had, last August, disclosed the findings of the Risk and Audit Committee (RAC) which revealed that the firm and the group together could have under-reported Rs 3,600 crore liabilities in financial years 2017 and 2018.

Erstwhile CG Power Chairman Gautam Thapar, CFO V.R. Venkatesh and others were removed from the company board in August over alleged under-reporting and siphoning off money to Thapar's other firms. They were eventually barred from the stock markets and Thapar was also summoned by the Ministry of Corporate Affairs (MCA).

The MCA had ordered a probe by the Serious Fraud Investigation Office (SFIO) into the matter. The MCA had also approached the NCLT seeking to reopen the financial statements of CG Power Industrial Solutions for 2015-19 on the basis of the company's announcement about financial irregularities, on which the tribunal has reserved its order.


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Probe required on all stakeholders in CG Power case: InGovern