The Ministry of Corporate Affairs (MCA) wants fraud-hit CG Power and Industrial Solutions to restate accounts of the past five fiscal years reflecting the actual financial position of the firm, including receivables from companies linked to erstwhile promoter Gautam Thapar, according to sources.
The new management of the company, soon after the fraud came to light, had on August 30 expressed the desire to restate financial accounts for the last five years and it will now expedite the process.
Sources said the MCA had filed a petition before the Mumbai-bench of the National Company Law Tribunal (NCLT) seeking permission to re-open the books of account and recast the financial statements of CG Power and its subsidiary firms for the past five fiscal years beginning 2014-15.
The MCA had previously asked its Serious Fraud Investigation Office (SFIO) to probe the affairs of the company along with 15 other firms, including two subsidiaries CG Power Solutions Ltd and CG International BV.
CG Power, which has ousted its chairman over allegations of financial irregularities, had plans to re-examine its accounts over the past fiscal years to ascertain whether similar transactions may have escaped detection after an internal probe into current performance revealed nine such deals.
A recent investigation by the company revealed that the nine wrongful transactions caused the company to lose around ₹3,300 crore.
It has asked companies linked to promoter Gautam Thapar, among others, to return the money and has initiated the second phase of the probe to fix responsibility for the alleged fraudulent transactions.
CG Power had in 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.
Following this, the firm has issued recovery notices to seven entities demanding repayment of ₹1,314.78 crore owed by them to the company. Besides, its subsidiaries have sent 23 notices to recover —2,095.64 crore, they said.
CG Power had previously in regulatory filings stated that a total of ₹3,018.62 crore was receivable from “various promoter affiliate companies and connected parties.”
