CG Power shares hit lower circuit after internal probe reports financial fraud by employees

CG Power and Industrial Solutions shares hit lower circuit on Tuesday after financial irregularities, including understating total liabilities, advances and unauthorized transactions, were uncovered in an internal probe conducted by the company's board of directors.

Intraday, CG Power's shares plunged 20 percent to Rs 14.80 per share on the NSE. The stock has already lost 70 percent of its value since the beginning of 2019.

Earlier, an independent legal firm appointed by the board of directors to probe certain financial wrongdoings by some employees of the company submitted a report to the board, pointing out certain misrepresentation in financial statements of the company and unauthorized financial transactions.

The irregularities were “purportedly carried out by identified company personnel (both current and past) including certain non-executive directors, certain KMPs and others identified employees” in breach of rules and without proper authorization, noted the report.

The internal committee noted the total liabilities of the company and the group may have been potentially understated by approximately Rs 1,053.54 crore and Rs 1,608.17 crore, respectively, as at March 31, 2018; and by Rs 601.83 crore and Rs 401.83 crore, respectively as at April 1, 2017.