The stock of the company is brooding at the bourses as to what extent the problems are! From outlook, it seems erstwhile promoters of CG Power used Acquisition as a tool for syphoning of money & to hide its losses. In this article we have articulated how promoters used Acquisition as a tool.
In March 2019, the Board of Directors of CG Power constituted Operations Committee (“Ops Committee”) with aim of improving stakeholders' value. However, while working on one of its priority tasks of seeking refinancing, of certain facilities and as part of conducting financial analysis, the Ops Committee was made aware of some unauthorized transactions. Digging further, they came out with some serious accounting lapses. As a result of this, on 10th May 2019 the CEO and Managing Directors K N Neelkant, sent on leave by board to enable proper investigation into financial irregularities, continues in his role for now.
On 21st June 2019 Letter by the Company for delay in submission of audited financial results for 4th quarter and year ended March 31, 2019 submitted with exchange. On 19th August, the Board of Directors released a note explaining all accounting lapses they came across.
This story is from the September 2019 edition of M & A Critique.
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This story is from the September 2019 edition of M & A Critique.
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