SEBI bars Gautam Thapar from accessing capital market

Regulator orders forensic audit to check books of accounts of CG Power

The Securities and Exchange Board of India (SEBI) has barred Gautam Thapar, chairman, CG Power & Industrial Solutions along with senior officials of the company from accessing the capital market for their alleged role in siphoning off money from the listed firm.

The capital markets regulator has also ordered a forensic audit to verify allegations of manipulation and misrepresentation in the books of accounts of the company.

Loss to shareholders

“Acts on the part of the noticees have resulted in the shareholders of CG Power losing the value of their shareholding which amounts to a ‘fraud’ on its public investors,” SEBI whole time member G. Mahalingam said in a 32-page order. Apart from Mr. Thapar, the watchdog has barred past directors Madhav Acharya and B. Hariharan and chief financial officer V.R. Venkatesh.

On August 20, the firm disclosed that it had found certain unauthorised transactions by the employees of the company and also a letter from a financing company regarding failure of interest payment.

Further, it said that the total liabilities of the companyand the group “may have been potentially understated” by approximately ₹1,053.54 crore and ₹1,608.17 crore respectively, as on March 31, 2018, and by ₹601.83 crore and ₹401.83 crore, respectively as on April 1, 2017.

Meanwhile, the SEBI probe found irregularities in the manner of sale of certain real estate assets of the company.

“The transactions are prima facie designed to divert/siphon off money from the listed company, which rightfully belongs to its shareholders,” the SEBI order said.

“While some information has emerged on the basis of a preliminary examination, a detailed forensic audit could bring out the complete picture and the extent of the misstatement/misappropriation,” it added, while directing the BSE to appoint an independent auditor or audit firm.

The auditor’s mandate would be to check if there were any instances of manipulation of the financials of the company or any kind of misrepresentation, wrongful diversion/siphoning of company funds.

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