The Ministry of Corporate Affairs (MCA) has ordered an investigation into CG Power and Industrial Solutions after a massive financial fraud was detected. CG Power said independent investigation revealed that some employees had engaged in unauthorised transactions, which led to the understating of liabilities by hundreds of crores of rupees.
The allegations of wrongdoing came to the spotlight after the board headed by Gautam Thapar apprised the stock exchanges of the findings of the investigation. The names of the employees who were allegedly involved in the transations have not been revealed by the company.
The Economic Times report states that the transactions to some of the related and unrelated parties of the company and the group were understated by Rs 1990.36 crore and Rs 2806.63 crore, respectively. As per disclosure to stock exchanges, the report clarifies that the company's and the group's liabilities might have been understated by Rs 1053.54 crore and Rs 1608.17 crore, respectively, as on March 31, 2018.
The shares of the company fell 20 percent on Tuesday following news about the financial fraud.
