Gautam Thapar Removed As CG Power Chairman After ‘Suspect’ Dealings Surface
The decision was taken in the interests of the firm and its stakeholders in discharge of fiduciary responsibilities of the board.
CG Power & Industrial Solutions Ltd.’s board has removed Gautam Thapar as chairman after an investigation by a legal firm unearthed governance and financial lapses at the company.
“This decision has been taken in the interests of the company and its stakeholders in discharge of the fiduciary responsibilities of the board,” the power equipment maker said in an exchange filing on Thursday.
On Aug. 20, CG Power had told the bourses that a probe by a legal firm revealed that the Gautam Thapar-founded Avantha Group flagship understated its liabilities and advances made to related and unrelated parties, among other financial irregularities. The “suspect” transactions were carried out by some key managerial personnel and other employees prejudicial to the company’s interest, it had then said, adding the transactions appeared to have been undertaken in a seemingly “fraudulent manner” warranting investigation.
The company’s investors and lenders have since wanted Thapar to be removed as chairman, PTI reported quoting people it didn’t name.
In a similar move, CG Power in May had sent Chief Executive Officer and Managing Director KN Neelkant on leave pending an investigation into “suspect, unauthorised and undisclosed” transactions.
Shareholding Pattern
As of June, Thapar held 8,574 shares of the total 62.6 crore shares of the company, data available on the BSE showed. In May, Yes Bank Ltd. had invoked pledged shares of CG power, acquiring 12.79 percent ownership in the company from promoter Avantha Holdings Ltd.
Shares of CG Power have declined nearly 45 percent since Aug.19 compared with a 1.1 percent drop in the benchmark Nifty 50 Index. The stock has hit the upper circuit over the last three sessions. Shares of Yes Bank also took a beating since the lapses in CG Power’s financials came to light. Its stock tumbled 27.9 percent since Aug. 19.
