After the detection of financial irregularities a few days ago, CG Power is mulling management rejig in the top deck of the company to put its revival plan back on track, said a media report.
In this regard, some of the board members reportedly assured the lenders and investors that there are plans for a major reshuffle in the top deck of the management at the company including the ouster of CG Power's founder Gautam Thapar in a bid to revive the crisis-hit company, said a report in CNBC-TV18.
The move towards tweaks in the management level is expected to start this week and the Ministry of Corporate Affairs has taken stock of the situation at CG Power, said the report quoting sources.
Last week, investors and lenders of CG Power demanded the removal of Thapar as the chairman of the company after an investigation unearthed a multi-crore financial scam in the firm, reported PTI.
The company had in a regulatory filing on 20 August stated that an investigation instituted by its board had found major governance and financial lapses including some assets being provided as collateral and the money from the loans siphoned off by "identified company personnel, both current and past, including certain non-executive directors." Also, some liabilities and advances to related and unrelated parties had been understated.
While the board on 10 May had sent CEO and Managing Director KN Neelkant on leave pending an investigation into some "suspect, unauthorised and undisclosed" transaction, Thapar has continued as the company chairman. The sources said some investors, at whose behest the probe was launched, now want Thapar and Neelkant to be removed from their posts to enable a thorough cleanup of the company affairs.
On 20 August, the power equipment maker had said an investigation by its board found major governance and financial lapses, including advances to related and unrelated parties as well as liabilities of the company and the group potentially being understated by hundreds of crores of rupees.
CG Power's current and past employees, including unnamed non-executive directors and certain Key Managerial Personnel (KMP) provided certain assets of the company as collateral and made the firm a co-borrower or guarantor to obtain loans without due authorisation.
The funds so raised were routed out of the company, the firm said in a filing to the stock exchanges.
After 13 hours of discussions lasting till 4 am, the board came to the conclusion that there were some unauthorised transactions carried out by 'certain employees', which led to a potential understatement of not only the company's liabilities but also advances to related and unrelated parties of the company and the group.
— With PTI inputs
Updated Date: Aug 27, 2019 15:31:38 IST