15.65
4.68%
CG Power falls sharply on news of fraudulent transactions

CG Power fell sharply in share price today on news of fraudulent employee transactions. YES Bank, which owns 12.79 per cent stake in the company, also declined on investor worries of exposure.  The board published comments to exchanges after a 13 hour long meeting which included discussions with the risk and audit committees. The board members emerged bleary-eyed at 4 am with key disclosures to the Exchanges. CG Power noted, "The total liabilities of the Company and the Group may have been potentially understated by approximately Rs 1053.54 crores and Rs 1,608.17 crores respectively as at 31 March 2018; and by INR 601.83 crores and INR 401.83 crores respectively as at 1 April 2017."

The company added, "Advances to related and unrelated parties of the Company and the Group may have been potentially understated by INR 1,990.36 crores and INR 2,806.63 crores respectively as at March 31, 2018; and by INR 1,479.34 crores and INR 1,331.47 crores respectively as at April 1, 2017."

CG Power said the fraud came about when company assets "were purportedly provided as collateral without due authority; and the Company was made a co-borrower and/or guarantor for enabling ostensibly unrelated third parties to obtain loans without due authorisation. The moneys so obtained were immediately and without due authorisation routed out of the firm".

CG Power is identified as a "weak stock" on trendlyne, with low durability, valuation and momentum scores. The CFO of the company had resigned on March 8, but was asked to continue in light of the revelations. 

 

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CG Power and Industrial Solutions Ltd. is trading above it's 30 day SMA of 14.28
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